New Brookings Report Highlights Advances in Financial and Digital Inclusion
Wednesday, August 10, 2016
Utilizing quality, affordable formal financial services effectively enables individuals to save for the future, invest in their livelihoods and families, and protect themselves in the case of financial emergencies. At the macroeconomic level, financial inclusion provides opportunities to promote economic growth, reduce income inequality, and combat poverty.
Yet while the economic and societal benefits are evident, achieving financial inclusion is a considerable undertaking that requires significant national-level commitment from government officials, financial service providers, telecommunications bodies, retailers, and other nonbank entities such as post offices. Moreover, advancing access to formal financial services is a necessary, but not sufficient, ingredient for financial inclusion, as a thorough understanding of appropriate financial services and products is needed to leverage them in a way that promotes financial health.
Globally, there has been tremendous progress in promoting inclusive finance: Between 2011 and 2014, financial exclusion declined by 20 percent globally. Yet further efforts are needed to promote access to and usage of formal financial services among the remaining 2 billion adultswithout formal financial accounts.