Financial Inclusion: For What?

Why we chose the 2019 theme "Financial Inclusion: For What?" and its four guiding answers

This year’s Financial Inclusion Week is a chance for our industry to reflect on the purpose and impacts of our work as an industry. At CFI, we’re observing trends that make us believe this an important time to reflect on these issues, which is why we’ve chosen the theme “Financial Inclusion: For What?”.

As we described throughout our Mainstreaming Financial Inclusion series, the digital revolution is fundamentally altering how traditional financial service providers and innovative fintechs interact with each other and how they recruit, onboard, serve, and retain customers. The potential opportunities are limitless, but the move to digital also exposes low-income households to new and poorly understood risks.

Simultaneously, the scope of the financial inclusion industry has widened dramatically. Attention and investment once given almost entirely to microcredit is now being shared with cash transfer, savings, and insurance services, and these products are being offered through increasingly dynamic platforms. When used well, the financial ecosystem can be staggeringly important, delivering digital payments to health workers combating Ebola, facilitating life-saving G2P and P2P cash transfers, or providing working capital to small businesses at critical moments. When it works less well, we read about Kenyans racking up unpaid gambling debts financed through mobile money-delivered nano loans.

Financial Inclusion Week is an opportunity to explore this dynamism while reflecting and refocusing our goals as an industry. Why are those of us in this space engaging in this important work? How do our goals inform our perspective on these and other trends? What does it mean if we’re working to different or competing aims? How should we think about success, and what is necessary to ensure we achieve it?

During Financial Inclusion Week events, four possible answers to the question “Financial Inclusion: For What?” will be in focus.

From October 21 to 25, 2019, CFI and partner institutions will be hosting digital and in-person events to explore these questions, and we invite you to join the conversation. During Financial Inclusion Week events, four possible answers to the question “Financial Inclusion: For What?” will be in focus. We’ll ask leading voices in the industry to debate the merits of these questions and articulate why these objectives should or shouldn’t be the guiding light of the industry.

Financial Inclusion for Financial Health


CFI has put forward the proposition that financial health is the goal of financial inclusion. Fundamentally, financial tools exist to help people manage mismatches between their income and expenses over time and space and build lumps sums of cash. The ability to do those things is financial health. The financial health concept is also resonating with financial service providers (FSPs) globally. It’s viewed simultaneously as a useful lens for understanding customer behavior and an easy way for providers to communicate to customers that they’re more than just an account number. Financial health, thus, seems like a natural goal to guide the industry.

However, as this CGAP blog post notes, it’s unclear where financial health sits in the industry’s theory of change. Is it an intermediate outcome or the ultimate one? It’s also proving difficult to define and measure, especially across different geographic and socio-economic contexts. With those concerns in mind, is this concept enough to guide us?

Financial Inclusion for Sustainable Development


Financial inclusion, financial services, and microfinance are explicitly mentioned in the targets of seven of the 17 Sustainable Development Goals. Their presence implies that financial services are a means to improve quality of life and suggests that creating financial stability should not be the only goal of financial inclusion.

The implications of sustainable development as the financial inclusion sector’s proverbial North Star are significant. It would require our focus on some of the world’s most intractable problems, like climate resilience and access to safe drinking water. It would challenge us to work even harder to reach the most vulnerable, reinvigorating efforts to include the ultra-poor and women in conversations about promoting small businesses and employment.

That could be a tall order for providers, even those focused on social impact. Serving the most vulnerable or niche markets is costly, which makes private investment riskier and less profitable. In that environment, what is the role of investors (impact-oriented and otherwise) and donor organizations? Is the financial inclusion industry, an industry which has increasingly aligned itself with the private sector and traditional finance over the years, prepared to adopt a new and broader mandate like this?

Financial Inclusion for Equity


If financial inclusion is a means to an end, maybe we should focus less on the ends and more on ensuring the means are fair. Doing so would be no small feat when “inclusion” is granted to people who can be served profitably, and of the included, the people with the least are either scrutinized or put at the greatest risk compared to the people with the most. Should striving for equity – fair access, fair use, and fair treatment for customers – be where we focus our efforts?

A focus on equity could be a driving force for collaboration.

A focus on equity could be a driving force for collaboration. Policymakers, regulators, and providers would need to work together to understand the opportunities and challenges for diverse market segments and formulate strategies to serve them. Efforts like the Smart Campaign’s client protection principles and digital credit standards or the GSMA Mobile Money Certification would serve as important guideposts to ensure customers are protected. And providers may even find that a focus on fairness helps drive customer activity.

Financial Inclusion for the Bottom Line


Maybe these objectives are too difficult to define and measure; too difficult to achieve consensus on; or unreasonable given the nature of financial services. Maybe we should focus on what businesses do best: achieving a positive bottom line.

This may sound cynical or like an endorsement of unfettered capitalism. It’s neither.

This may sound cynical or like an endorsement of unfettered capitalism. It’s neither. Rather, it’s a recognition that successful businesses that are also good-faith actors deliver value to clients, as demonstrated by their success. As costs are driven down, the infrastructure to enable access will expand, demand for formal financial tools will increase, and businesses will spring into existence. With this as a guiding vision, the industry would focus on martialing capital to finance innovative ideas, nurturing their development, and aggressively scaling their successes.

How to Get Involved

We’re excited to have you join us during the week of October 21, 2019, as we debate these and other objectives for the industry. We’re anticipating unique perspectives from stakeholders across the financial inclusion spectrum– banks, traditional microfinance institutions, fintechs, regulators, investors, donors, non-profits, and others. Please feel free to reach out to us with any questions; sign up to receive updates and announcements; and follow #Finclusionweek on social media.

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