Financial Inclusion 2.0
As the experience of Uruguay shows, transforming developing countries’ financial systems in order to boost social inclusion will require bolder policies, more ambitious targets, and creative solutions. If these measures enable everyone to access and benefit from financial services, then finance may no longer be a dirty word.
MONTEVIDEO – In developing countries, it can be a challenge to convince people that finance is not a bad word, and that the financial system is not necessarily a perverse mechanism that serves only the rich and sends the national wealth abroad. The key questions are what type of financial system do we want, and what can be done to achieve it.
More inclusive and accessible financial systems increase economic growth, reduce poverty and inequality, and boost social inclusion. Moreover, governments can play a critical role in helping to achieve those development goals by actively implementing financial-inclusion policies.
For a long time, information asymmetries and financial institutions’ lack of knowledge about potential customers and their needs excluded large portions of developing countries’ populations from the financial system. But policies that address those market failures will, in the long term, generate positive economic spillovers and improve financial stability.
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