Growing Income, Growing Inclusion: How Rising Incomes at the Base of the Pyramid Will Shape Financial Inclusion

This report proposes that massive income growth around the world over this decade will have a significant effect on the demand for and use of formal financial services.

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AUTHORS

Sonja Kelly, Elisabeth Rhyne

Topic

Enabling Environment

Increases in income among low-income populations provide both an opportunity and a challenge for the financial inclusion community. The opportunity emerges from the large number of people moving into a new income bracket. The ability and propensity of people in the vulnerable class to use formal financial services is set to increase, forming an enormous new market.

Income growth also poses a challenge because serving this market effectively requires providers to understand how and why a person may shift from informal to formal financial services. Providers must use this understanding to innovate in products, delivery, and marketing.

At the same time, we remind readers that it is important to continue to focus on the smaller but still substantial group of people who remain in poverty.

Sonja Kelly

Director of Research and Advocacy, Women’s World Banking

Sonja Kelly is the global lead for Women’s World Banking research and was the research director at CFI from 2011 to 2018. Through research on the financial sector, policy trends, financial services providers, and end users, Sonja and her team advocate for women’s financial inclusion. Before joining Women’s World Banking, she advised the U.S. Department of State on strategy for U.S. Embassy engagement in digital finance around the world. She has also held consulting roles at the World Bank and the Consultative Group to Assist the Poor (CGAP), and has worked in microfinance at Opportunity International. Sonja holds a doctorate in international relations from American University where she researched financial inclusion policy and regulation.

Elisabeth Rhyne

Former Managing Director

From its founding in 2008 until retiring in 2019, Elisabeth Rhyne was the Managing Director of CFI. As senior vice president of Accion since 2000, Beth led Accion’s initial entry into Africa and India, directed the organization’s research efforts to develop new financial products, and managed Accion’s publications and educational activities. Recognized as a leading thinker and writer in the field of microfinance, Beth has published numerous articles and four books on the topic, including Mainstreaming Microfinance: How Lending to the Poor Began, Grew and Came of Age in Bolivia (Kumarian Press, 2001). She was also co-editor of The New World of Microenterprise Finance (Kumarian, 1994), which provided the introduction to microfinance for many of the field’s current professionals. Beth was director of the Office of Microenterprise Development at the U.S. Agency for International Development (USAID) from 1994 to 1998, where she developed and led USAID’s Microenterprise Initiative. While there, she contributed to the founding of the Consultative Group to Assist the Poor (CGAP) and the Boulder Institute of Microfinance. Beth’s experience includes eight years of residence in Africa (Kenya and Mozambique) and independent consulting on microfinance policy and operations for governments, international organizations and microfinance institutions. She holds a master’s and Ph.D. in public policy from Harvard University. She earned a bachelor’s degree in history and humanities from Stanford University.