We can’t let financial inclusion become just another buzzword

Over the last decade, the world has made significant progress towards universal financial inclusion.

Today, traditionally underserved individuals have greater access to financial products than ever before.

And with mobile networks reaching more than 90 per cent of the population in developing nations, digital payments – a key on-ramp to financial inclusion – are becoming easier.

The next chapter of financial inclusion will require us to focus not just on access, but on usage, and ultimately on financial health and security. We won’t see progress towards those goals achieved if new accounts aren’t used.

On usage, we still have distance to travel.

Globally, one fifth of bank or mobile money accounts are inactive, without a deposit or withdrawal over the past year. While developing markets like China, India, Kenya, and Thailand have achieved account access upwards of 80 per cent, usage still falls short. Overall, developing markets have been slow to close the usage gap with high-income countries.

Without usage, we risk financial inclusion joining the pile of failed solutions and becoming just another buzzword.

There are therefore three key things we must do to ensure that inclusion delivers on its promise.

First, we need to build robust eco-

systems that enable scale. To achieve our collective goal of financial inclusion for all, we must deepen our work with stakeholders such as civil society institutions, multilateral organisations, government bodies, and private sector financial institutions.

All of these have played and will continue to play a tremendous role in financial inclusion, including by building out the ecosystems necessary for individuals to find it convenient and compelling to use their new access.

Next, we need to broaden our aperture and look beyond the traditional stakeholders to a wider cast of actors, reaching deeper into the real economy. There is an opportunity to work more closely with the private enterprises that are present in the lives of people living on less than $2 a day – and to do so in a manner that strengthens the path from financial access to financial health and security.

The first place to look is among the organisations that drive economic activity at the base of the pyramid: telecommunications providers, agribusinesses, consumer goods companies, apparel companies, and energy firms. They sell to, buy from, and employ millions of underserved individuals and small businesses which are still left out of the formal financial system.

Not only do these organisations play a critical role today, but they have a vested interest in seeing the digitalisation of their business models going forward. They stand to benefit from the tools – more efficient digital payments – as well as the outcome – greater financial inclusion.

The final step is to get the ecosystem working together for mutual benefit. “If you want to go fast – go alone. If you want to go far – go together.” This oft-cited African proverb summarises the need to approach financial inclusion efforts collaboratively.

Regardless of an ecosystem’s maturity or composition, the private sector must work with governments and civil society to create enablers for success. There remains a great need to invest in infrastructure that enables acceptance of payments, as well as education and financial literacy to help people on their journey to financial security and health.

As a market organiser with decades of experience shaping ecosystems responsibly and fostering productive business environments, we believe in the power of digitalisation to realise social impact.

By working with a broad range of stakeholders – traditional partners like banks, less traditional partners including microfinance institutions, and new partners such as enterprises in the real economy – we can accelerate and expand real financial inclusion.