Financial inclusion is the extension of financial services to all members of society, including poor people and individuals with limited financial literacy. The goal is to make sure that everyone in all classes of society has access to services like lending, banking, and so forth. In addition to serving disadvantaged members of a society, financial inclusion also benefits the economy as a whole and can be a force for economic growth in developing nations where much of the population would not normally be able to use financial services.
A variety of tactics can be used in a financial inclusion plan. Such programs are usually developed by government agencies, sometimes in cooperation with international organizations, including organizations of finance professionals. The first step involves a survey to determine how many people are not being served financially, and what kinds of obstacles are present. These could range from lack of access to bank branches to poor understanding of financial matters.
Techniques for financial inclusion can include expanding banks, making money lending and transfers available at places like rural post offices, and providing microcredit. Microcredit, where people receive very small loans to kickstart businesses or engage in improvements to homes and businesses, can be a highly effective way of expanding access to capital in a society, and may provide the support individuals need to get businesses running and start supporting themselves.
Education can also be part of a financial inclusion program. This can include classes in financial literacy for members of the public, as well as outreach in the form of pamphlets, posters, and other materials. Members of society are provided with information about services they can access along with informative disclosures of their rights as consumers and customers. Increasing financial literacy will make it easier for people to access helpful financial services in their communities.
Increasing financial inclusion may raise the quality of life for many people in a nation, including people who do not directly need increased access to financial services. When more people are opening businesses, banking, trading, and engaging in other activities, the economy as a whole experiences an uptick. This can allow national companies to thrive, provide more job opportunities, and offer other benefits to a nation. Issues like rural poverty can be indirectly addressed by improving the financial system and boosting economic growth, making poorer members of society more able to access work, health care, and other necessities of life.
