WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
Millionaires Business School (MBS)
sustainable financial services, whether it is savings, credit or
African Young Entrepreneurs of Nigeria (AYEEN)
insurance. The great challenge is to address the constraints
Entrepreneurs Organization
that exclude people from full participation in the financial
Young Entrepreneur Council
sector. Together, we can build inclusive financial sectors that
Pillars Association
help people improve their lives”. Earlier in 2013, the Alliance
The Rockefeller Foundation
for Financial Inclusion (AFI) Executive Director Alfred
Acumen Fund
Hannig highlighted on 24 April 2013 progress in financial
Contacts:
inclusion during the IMF-World Bank 2013 Spring Meetings:
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"Financial inclusion is no longer a fringe subject. It is now
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recognized as an important part of the mainstream thinking on
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economic development based on country leadership".
In partnership with the National Banks for Agriculture and
MEGA FINANCIAL INCLUSION
Financial inclusion is where individuals and businesses have
Rural Development, the UN aims to increase financial
access to useful and affordable financial products and
inclusion of the poor by developing an appropriate financial
services that meet their needs that are delivered in a
product for them and increasing awareness on available
responsible and sustainable way. It is the pursuit of making
financial services strengthening financial literacy, particularly
financial services accessible at affordable costs to all
among women. The UN's financial inclusion product is
individuals and businesses, irrespective of net worth and
financed by the United Nations Development Programme.
size, respectively. Financial inclusion strives to address and
proffer solutions to the constraints that exclude people from
BREAKING DOWN OF THE TERM “FINANCIAL
participating in the financial sector.
INCLUSION”
By definition, financial inclusion is the availability and
equality of opportunities to access financial services. Those
that promote financial inclusion argue that financial services
can be viewed as having significant positive externalities
when more people and firms participate. One of its aims is
to get the unbanked and under-banked to have better access
to financial services. The availability of financial services
that meet the specific needs of users without discrimination
is a key objective of financial inclusion.
It has been estimated in 2013 that 2 billion working-age
adults globally have no access to the types of formal
financial services delivered by regulated financial
institutions. For example, in Sub-Saharan Africa, a good
percentage of adults are affected even though Africa's
formal financial sector has grown in recent years.
There is some skepticism from some experts about the
effectiveness of financial inclusion initiatives. Research on
microfinance initiatives indicates that wide availability of
credit for micro-entrepreneurs can produce informal
intermediation, an unintended form of entrepreneurship.
The term "financial inclusion" has gained importance since
the early 2000s, a result of identifying financial exclusion
and it is a direct correlation to poverty. The United Nations
defines the goals of financial inclusion as follows:
Access at a reasonable cost for all households to a full range
of financial services, including savings or deposit services,
payment and transfer services, credit and insurance.
Sound and safe institutions governed by clear regulation and
industry performance standards.
Financial and institutional sustainability,
continuity and certainty of investment.
to
In 2016, the World Bank stated that around 2 billion people
worldwide don’t use formal financial services and more than
50% of adults in the poorest households are unbanked. The
unbanked population consists of adults who have no easy
access to banks in their regions or who have developed a deep
mistrust of the financial system. An initiative by the World
Bank Group called Universal Financial Access 2020 is taking
measures to ensure that the unbanked community has access
to traditional platforms like checking accounts by 2020.
People who have basic transaction accounts are classified as
the under-banked. The under-banked are adults who have
secured the traditional tools for conducting transactions (such
as a bank account) but are not privy to the digital
incorporation of these transactions (such as digital payments).
Because having a basic bank account is the foundation on
which disruptive innovations are built, fintech offers the
under-banked a ticket to financial digital inclusiveness.
ensure
Competition to ensure choice and affordability for clients.
Former and the late United Nations Secretary-General Kofi
Annan, on 29 December 2003, said: “The stark reality is that
most poor people in the world still lack access to
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The financial sector is continually coming up with new and
seamless ways to provide services to the global population.
The increase in the use of technology in the financial industry
(fintech) seems to have filled the void of inaccessibility to
financial services. The advent of fintech has created a way for
all entities to have access to all financial tools and services at
reasonable costs. Examples of fintech developments that have
increasingly been embraced by financial users include digital
payments, crowd-funding, robo-advisers, peer-to-peer (P2P)
or social lending, and insurance telematics. While these
innovative services have disrupted the financial world by
including more participants in the money sector, there is still
an untapped portion of the world population that remains
unbanked or under-banked.
With little access to banks, especially in rural areas, under-
banked users mostly carry out transactions in cash or checks,
making them vulnerable to theft and street frauds. Even access
to bank locations for conducting transactions like cash
deposit, check cashing, money order and funds transfer may
come at high costs in terms of banking fees. Fintech,
telecommunication and banking institutions are working
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