Why Build Financially Inclusive Economies?
The lack of access to even the most basic financial services makes it difficult for an estimated two billion people to save money and effectively participate in the global economy. When G20 leaders meet in Germany this week, digital financial inclusion must remain at the top of the agenda.
SEATTLE – The theme of this week’s G20 summit in Hamburg, Germany, is “shaping an interconnected world,” and when leaders get down to business, many of the highest-profile topics – climate change, counter-terrorism, trade – will take center stage. But the attention received by a less well-known agenda item will be no less critical to ensuring global prosperity: digital financial inclusion.
Today, some two billion adults still lack access to even the most basic financial services. Digital financial inclusion is about broadening access to the formal economy by making electronic financial tools – like debit accounts that people can access on their mobile phones – affordable and available on a large scale.
When the poor start using these services, two things happen. First, they manage money more effectively – with new ways to save, make payments, access credit, or obtain insurance. Second, they spend less time taking care of simple financial transactions and more on productive work or running a small business of their own. Moreover, additional earnings and savings boost poor people’s resilience against financial shocks resulting from, say, an unexpected medical expense or a seasonal crop failure.
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