Expanding Financial Inclusion

published by J. Michael Collins

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Expanding Financial Inclusion
Successful financial inclusion approaches allow people to access savings, insurance, or credit when they need it, and in turn provide opportunities for people to achieve their financial goals and secure their well-being.
Financial inclusion encompasses individuals’ access to tools, products, and services needed to achieve financial well-being.
Consumers & Households
Financial Capability - Financial literacy - Access to advice - Responsibility to manage products
Markets & Government
- Payment systems & standards - Consumer protections & enforcement - Equitable access to deposits and credit - Mostly private provision, but some public - Reporting benchmarks to meet high standards
Financial Inclusion Is Broader than Bank Accounts or “Digital Solutions”
Digitization reduces the costs of delivery, but may create new problems
Financial services are rapidly changing
Consumer protection, legal remedies, strong property rights, and transparent verification systems can expand access to financial services overall.
Balancing Innovation and Protection
Access is not sufficient to achieve the full potential of financial inclusion
Behavioral constraints
"Three-Leg Stool" for Supporting Expanded Inclusion
1. Access to affordable, scalable products 2. Consumer financial literacy and capability 3. Consumer protection and enforcement
Emergency Savings
Retirement plans
Short Term Credit
Education finance
Small Business Loans
Key Products
- Financial security and stability, consumption smoothing, and asset building - Human capital investments - Entrepreneurship, self-employment, and small business growth - Expanded economic participation and opportunities for economic mobility
The Potential