June 22

Celina Lee

It’s Time to Match Tools with Our Understanding of Consumers and Financial Inclusion

“We shape our tools and thereafter our tools shape us.” – Marshall McLuhan


(Editor’s note: This is the first in a three-part series by insight2impact and also part of NextBillion’s focus on financial inclusion for the month of June.) 

In 2010, the leaders at the G20 Summit in Seoul launched the Global Partnership for Financial Inclusion (GPFI). It was a watershed moment for financial inclusion, marking its evolution from a grassroots microfinance movement in the 1980s to a mainstream development agenda.

It was particularly exciting for me. I attended as the monitoring and evaluation (M&E) specialist at the Alliance for Financial Inclusion, one of the three key implementing partners for the GPFI, along with CGAP and the International Finance Corporation. GPFI tasked the implementing partners with developing indicators to monitor progress and potentially set targets for financial inclusion. As any good M&E specialist would do, I started by taking stock of what data was available. At the time, it was limited (Findex was still in inception). The most reliable and comparable data we found was on access to financial services infrastructure and ownership of bank and credit accounts.

By all accounts, the initiative of developing indicators was extremely successful in mobilising the global financial inclusion community over the ensuing years. Subsequently, other major initiatives for financial inclusion have been launched – such as the AFI Maya Declaration and World Bank UFA 2020 – and more than 700 million previously excluded adults now have bank accounts.

Over this time, new data sources have also become available that have deepened our understanding of how consumers interact with financial services. What we’ve learned from these new data-sets has been remarkable. But while we’ve generated new insights for financial inclusion, our indicators are yet to catch up.

The tools we shaped in 2010 still by and large shape us – the financial inclusion community.

Established in 2015 as a resource centre to develop and test new measurement frameworks to effectively use data to assist the financial inclusion community, we at insight2impact reached out to the global community of financial inclusion practitioners. What we found was remarkably consistent – that the time is right to match our tools with our evolving understanding of consumers and financial inclusion. People we spoke to articulated three major concerns in this regard:

  1. Client value: There were widespread reservations about whether low-income adults were getting value from their newly minted bank, mobile money or credit accounts, but a lack of tools to inform our understanding in this regard.
  2. Informal financial services: There was an understanding of the big and complex web of financial engagements among poor households from surveys like financial diaries but limited grip on how to measure these informal dynamics.
  3. Impact: There were concerns over our understanding of the impact of financial inclusion and limited ability to demonstrate and quantify the impact of our work.

When we surveyed the wide spectrum of financial inclusion indicators that are now being utilised across the globe, we observed that most of the indicators still measure only the enabling environment, access to services and uptake of financial services. Those measurements are necessary, but no longer sufficient to answer the evolving questions practitioners, policymakers and donors alike want answered.

The challenge now is to evolve our measurement frameworks to help provide answers to these questions. Our recently released i2i Measurement Framework Note series tackles this head-on. It introduces a new theory and set of measurement frameworks that can assist stakeholders to achieve their good intentions. The theory and frameworks are underpinned by three insights that will help us measure and understand client value, informality and impact. These insights are introduced in Note Three:

  1. Usage is necessary for financial inclusion outcomes and impact. If financial services are taken up but not used or are used to a very limited extent, it means that many of the benefits (client value) of having the service do not materialise, and the linkage from financial inclusion to the ultimate public policy objective that it seeks to support breaks down. This is not to say that usage is a panacea – usage may be misplaced or inappropriate, or it may not render sufficient value. Ultimately, however, usage is a necessary (if not sufficient) condition for outcomes to ensue.
  2. Consumers choose financial services based on their underlying needs. People regard financial services as a means to an end, with the end being the underlying financial need that financial services are used for. This means that financial services may in practice be used for different purposes from what they were designed for, and measurement frameworks need to take this into account.
  3. Different financial devices (formal and informal) are substitutes or complements in meeting a specific need. People may be served by different providers and products, and formal provision is only part of the story. Thus, any measurement framework that attempts to impact financial inclusion outcomes should take account of the consumer’s full financial life.

Our work to date lays out this framework, which still needs to be tested and populated with data. Going forward, we’re excited to continue to work with our partners in this field to shape, refine and populate our tools.

As we’ve seen over the past seven years since that winter day in Seoul, data has tremendous power to convene, mobilise and shape our work as financial inclusion practitioners. It’s now all our jobs to make sure the data tools we use are the right ones to take us where we want to go.

If you’re interested in learning more about our work and how you can get involved, please contact me at


Celina Lee is the lead of the insight2impact (i2i) data facility.

Photo illustration by Tiwonge Kanchenche


data, financial inclusion, microfinance, poverty alleviation