I recently moderated a panel on “Inclusive Growth in a Digital Era: Priorities for the Future” during Financial Inclusion Week, powered by the Center for Financial Inclusion in which senior executives shared their insights in a lively conversation. The discussion focused on the findings of the recently published Global Findex Database 2021 by the World Bank.
One of the key insights from the study is that more than a billion people have gained access to basic financial tools over the past decade. However, an additional 1.4 billion people continue to be left out, and reaching this population will be much more challenging.
The panelists included leaders from Accion, Jumia Group, The World Bank and Visa sharing their understanding of the situation and providing insights into their vision for the future. The entire conversation is available here for you to watch on the Financial Inclusion Week website and here are some key takeaways:
The Pandemic Impact
After steady progress in financial inclusiveness for decades, the improvements in battling poverty faltered during the pandemic while those relating to financial inclusion, account access and usage continued to improve. This disproportionally affects the most marginalized sections in the developing world, including women, low-income families, farmers, etc.
Some economies proved to be more resilient against the pandemic challenges and performed much better than others due to prior investments for universal access in connectivity and payments. Financial inclusion and access to financial tools & services contribute to the resilience of families and MSMEs (micro, small and medium-sized enterprises) in the developing world.
The Case for Financial Inclusion for Consumers
From a purely economic point of view, 100% financial inclusion in the developing world can directly add $3.7 trillion to the global GDP. Currently, only 71% of the adults in these economies have access to basic financial products and 43% still use cash as their form of payment.
One of the reasons consumers do not trust digital finance is the need for more understanding, familiarity, and education. Unfortunately, less experienced customers are more vulnerable to fraud and unexpected fees…