What is Financial Inclusion?

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What is Financial Inclusion?

As explained above, microfinance was an initial, PRIVATE effort pioneered by Muhammad Yunus to reduce poverty by giving impoverished entrepreneurs access to microcredits and other financial products and services.
In 1976 Yunus started the Grameen Bank in Bangladesh. In 2006 the Grameen Bank and its founder Yunus were awarded the Nobel Peace Prize.
However, according to the United Nations (UN), three billion people around the world still do not have access to formal financial services like savings accounts, credit, insurance, and payment services. More than half the population in developing countries and more than 80 percent of households in most of Africa are financially excluded.
On 29 December 2003, Former UN Secretary-General Kofi Annan said: ”The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance.
Financial Inclusion (FI) (from ±2004) is an economic POLICY of various governments and NGOs that (also) aims at giving disadvantaged or low income households and enterprises access to a COMPLETE RANGE of financial / banking services at affordable costs through building an entire INCLUSIVE FINANCIAL SYSTEM.
Financial inclusion includes many products and services like: savings facilities (microsavings), short and long-term credit, micro credits, loans, leasing and factoring, mortgages, insurance (microinsurance), pensions, payments, micropayments, credit and debit cards, overdrafts, cheques, local money transfers, electronic fund transfer (EFT), international remittances, pensions, and last but not least financial advice, coaching and education.
Compared to microfinance, financial inclusion is more comprehensive, more systemic and more public.
Compared to financial inclusion, microfinance was initially more focused on microcredits, more practical, and more private.
Financial inclusion is also referred to as: Inclusive Finance.

		Comments by date▼ Comments by rating Rating
		0 Gabriel Femi Adewara Management Consultant, Nigeria
	Financial Inclusion Should Be the Policy Framework to Drive Microfinance Obviously, microfinance institutions are failing to thrive in the less developed countries because of very poor distilling of policies and regulatory oversight roles by the central banks. A policy framework that is not based on an in depth research of the peculiar characteristics of the preponderant base of the pyramid will not drive microfinancing as a sustainable proposition for development of the financial services sector in particular and the macro economy in general.

		0 Laxminarayan Katti Student (MBA), India
	Financial Inclusion: Innovation and Education Banking the unbanked is financial inclusion. To reach the unbanked, the use of the right technology is an important factor. Decisions regarding this are to be made by the stakeholders (banks, NGOs). All said and done the main challenge for financial inclusion is to educate the target population about the benefits of the services provided by the banks, as well as keeping these financially included accounts active. There is need for the banks and the governments to innovate.

		0 VENKATESWARAN Teacher, India
	Demands on an Inclusive System Financial inclusion means all financial, insurance, banking and credit facilities for all without any exception must be an affordable, available, accessible, acceptable and accountable system. The whole benefits should not be in the exclusive purview of a far and few citizens.

		0 RIchard Langlais, United Kingdom
	Financial Inclusion and Credit Unions Financial inclusion is a global economic initiative, which serves to eliminate the negative financial status of low income individuals. In most western countries, one will find credit unions which offer financial services to low income households that traditional institutions will not offer. The service has global reach, however the levels of service in developing nations are not of the same standard as those in the developed world. In layman's (Ed: ~amateur) terms, it is an effort by the greedy upper classes to feel less shame on themselves.

		0 Abhishek Saxena Project Manager, India
	Financial Inclusion & Development The article itself mentions “traditionally banks were unable to serve the base of the pyramid”... Will financial inclusion (FI) alone be able to achieve holisticdevelopment? Although it is a wonderful instrument, in my view FI has to be accompanied by public systems (health services and education institutes) to support this population and hence also contributing to development. This will prevent the fallback of the individual/family.

		0 John Michael Donohue Director, United States
	Microfinance and Financial Inclusion Economic development at the individual/household level is conditioned on certain institutions of capitalism, which in themselves, must evolve and mature as a condition precedent to enterprise creation and development, with or without microfinance. The prominence of a public sector is at the base of these institutions. What is required is not more government, but less, although there are many voices here who plead on the side of more government. One may even argue that MF was invented because institutions were dysfunctional, and therefore we shouldn't be concerned with them. However, if we concede that point, the greater issues of financial inclusion will never be resolved.

		0 John Moses Manager, Nigeria
	Financial Inclusion - Key to Achieving an Effective Financial Empowerment Financial inclusion should be pursued with a great passion by governments across the globe especially among the less developed countries in order to redeem their citizens from poverty and deprivation. Financial education and enlightenment should be given to the low income earners and the poor citizens before making the facilities accessible to them with close supervision on how the facilities can be utilised efficiently and effectively. Government policy framework on microfinancing should be flexible enough and also workable rather than being strenuous and impracticable.

		0 Vishnu R. Padhiyar
	Financial Inclusion is Now a Common Objective Financial inclusion is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. Unrestrained access to public goods and services is the sine qua non of an open and efficient society. It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of public policy. The term "financial inclusion" has gained importance since the early 2000s, and is a result of findings about financial exclusion and its direct correlation to poverty. Financial inclusion is now a common objective for many central banks among the developing nations.

		0 Juan Bravo Management Consultant, Ecuador
	Microfinance is a Form of Inclusion In my opinion, microfinance is a form of inclusion for the most vulnerable groups in rural areas. We need to develop specific financial products according to ability to pay and have an advisory and mo...

		0 Sabo Victor Emmanuel Nigeria
	Financial Inclusion: Whose Objective Should it Be? Considering the aim of this policy, I think financial inclusion should be the objective of the government and not of corporate entities. Government activities are welfaristic in nature because they a...

		0 Luisa Pineda Martinez Guatemala
	Financial Inclusion There should be a lot of expectancies around this subject, for what I read. As a manager could do a social analysis of the particular situation of the entire family or a community before granting a fi...

		0 Saikat Basak Accountant, India
	Financial Inclusion Definition Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income group...

		1 Amwonya Aggrey Business Consultant, Uganda
	Financial Inclusion Financial inclusion is a recent term used to indicate the aim of serving more people with financial products (services) at a low cost. More specifically it refers to arranging access to a range of f...