Why do we need financial inclusion?

Today we are talking about financial inclusion.

“There is enough for everyone’s needs, but not enough for everyone’s greed” said Mahatma Gandhi.

This profound statement says a lot about the world today. Despite technological advances and growing economies, only a portion of the world’s population has access to the financial system. 1.4 billion people – almost a fifth of the world’s population – still had no access to formal banking services in 2021.

It’s not just a question of not taking out loans or credit. It’s about being denied the resources they need for a secure future. Without access to financial services, entire communities remain trapped in a cycle of poverty.

The World Bank report identified financial inclusion as an enabler for 7 of the 17 Sustainable Development Goals.

Why financial inclusion is important

Financial inclusion is not only a moral obligation, but also a driver of economic growth. When people have access to banking services, credit, savings and insurance, they have the opportunity to improve their lives. They can start businesses, invest in education and provide for their families.

In prosperous times, communities become stronger and happier. In difficult times, however, violence and conflict increase sharply. I have come across several reports that show a clear link between poverty and violence. This applies to both industrialized countries such as the UK and emerging economies such as Colombia.

However, there are reasons why people do not have access to the financial system: lack of infrastructure, high costs and limited financial education.

What is preventing us from achieving financial inclusion?

We have made progress in recent years. But the journey is not over yet.

Many people still need a basic internet connection. In many regions, there is insufficient knowledge about money and saving. People need to learn the basics of starting and building a business.

In many countries, people are confronted with obstacles. Financial institutions such as banks and insurance companies are not trusted. In some cases, government measures or cultural norms hinder financial inclusion.

The problems are complex, but that doesn’t mean we should be discouraged. If we think holistically, we can find ways to educate people and create barrier-free solutions for access to money.

So the question is: what else can we do to make financial services accessible to everyone?

Is technology the answer?

One bright spot on the road to financial inclusion is the rapid rise of digital and mobile services. These tools enable access to financial services in areas where the traditional banking infrastructure is inadequate.

Consider these groundbreaking statistics:

. In 2023, over 1 billion registered mobile money accounts worldwide were used for transactions worth 3 billion US dollars per day.📲

– Mobile financial services are contributing to 6 percent GDP growth in emerging markets, demonstrating that they can drive entire communities forward.

– Financial inclusion could create 95 million jobs worldwide by 2030.

Even a small amount of money can change a person’s life. For example, they could use it to save for their children’s education or start a small business. They could learn a trade. People could afford cell phones or computers to work remotely and earn a living.

Technology is one answer, but not the only one.

Solutions for financial inclusion

We can achieve financial inclusion by working on several fronts. First, we need to develop the infrastructure. People in remote regions do not need another bank branch. A physical infrastructure is not efficient for the bank either. However, they can benefit from mobile applications that enable instant money transfers.

Low-cost mobile money solutions will give people in low-income regions access to the financial system. The potential is huge – billions of people will benefit and billions of lives can be improved. We can develop innovative solutions that support both climate protection and financial inclusion.

As insurers, we need to develop solutions that allow people to pay with mobile money and receive payments immediately in the event of a claim. Parametric insurance could massively change the way we process and pay out claims. Fast and seamless – this is the future of customer service.

Cooperation is more important than competition. But for this we need a new kind of leadership – people who understand systems thinking and ecosystem economies. The future belongs to those who understand that partnerships with governments, non-profit organizations and private companies will drive large-scale initiatives.

The more we promote innovation, the faster we will achieve financial inclusion. Governments and institutions around the world can help or hinder innovation through regulation and funding. There are many talented people in the world who can develop next-generation fintech solutions.

Last but not least, we need to invest in financial education. Not only in emerging countries. How many schools teach children how to manage money? They all know how to spend money, but very few know how to save and earn money.

A call to action

Financial inclusion is not just a noble goal, but an economic and social necessity. The road ahead is long, but the impact is undeniable: stronger economies, more resilient societies and opportunities for millions of people who have been left behind.

Now is the time to move from discussion to action. What concrete steps can we take today to make financial services truly accessible to all? How can companies, policy makers and individuals drive real change?

Share your ideas with us in the comments – let’s challenge the status quo and drive forward solutions that really make a difference. Because financial inclusion shouldn’t just be an issue. It should be the future we shape.

Mirela Dimofte

Read also: Beyond profit: Building a people-centered economy in a world obsessed with money