COVID-19 May Just Be the Unintended Booster Shot Financial Inclusion Needed
By Nalin Kumar, Pallavi Madhok
As millions suffer the physical and economic consequences of COVID-19, the events of recent months point to at least one positive, if you happen to be one of the 1.7 billion people on the planet who are financially excluded. Governments have acted quickly to disburse relief benefits to citizens in need. As the global economy stuttered to a halt, these government aid payments literally meant the difference between life and death for many low-income people.
What is interesting about India’s example is that the government has remitted funds only to women. Why this group? What the government knows, and research affirms, is that sending benefits to women ensures that the funds are spent on household goods and services, education and savings. Therefore, as part of its COVID-19 stimulus package, the Government of India announced that it would transfer Rs 500 a month (for three months) to all women with Jan Dhan accounts, to help them manage household expenses during the lockdown.
Photo courtesy of Knut-Erik Helle.