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What Is Financial Inclusion?


As the economy becomes more globally connected, only those with the ability to access it can truly benefit from it. Recognition of this obstacle has led to efforts to give all individuals a chance to participate in the global financial system, regardless of their wealth or geographic location.

What Is Financial Inclusion?

The goal of financial inclusion is to provide access to the financial tools and services people need to improve their quality of life, from bank accounts to credit, insurance, and access to business capital. The concept is relevant in communities where individuals lack the financial basics that support economic well-being and development. Particularly underserved populations include women, members of poor households, young people, and those who live in rural areas and developing economies. Globally, 69% of adults have some type of financial account, though in Niger, Iran, and several other countries, the rate is below 20%.

Financial exclusion can compound the conflicts individuals face. Those without bank accounts pay more for bills overall, while those without health insurance are at risk for higher health care costs. At the same time, broadening financial inclusion can bring holistic benefits. This is why financial inclusion is key to many of the United Nations’ Sustainable Development Goals, including ending poverty, reaching gender equality, and creating decent work and economic growth.

Globally, 69% of adults have some type of financial account.

Achieving Financial Inclusion

Bringing more people into the financial system has already helped make progress toward the SDGs. For example, the widespread adoption and availability of digital banking in Kenya helped about one million people exit extreme poverty. Worldwide, over one billion adults have gained access to a financial account since 2011.

While digital payment apps have allowed rural, unbanked individuals to make cashless transactions for the first time, micro-loans have given entrepreneurs access to capital to build their businesses and move out of poverty without going through traditional financing channels, which are unavailable to them. Micro-loans also help close the gender gap for women by improving women’s net worth and empowering them to be more involved in their personal and family financial decisions.

Many large companies and investors have shown their support for the cause of financial inclusion. Last year, Mastercard announced a $500 million commitment to an “inclusive growth fund” that would use the company’s technology and data to bring more people into the formal economy. Mastercard’s Center for Inclusive Growth has partnered with a variety of organizations to promote financial inclusion globally. In May, the company announced a collaboration with the Urban Institute that would conduct research to learn how cities and the private sector can work together to further the objectives of financial inclusion.

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