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Financial inclusion policy guide: enhanced resilience through savings and insurance via linkages and digital technology

Research reports

Written by Andrew Shepherd, William Smith, Lucy Scott

​Financial inclusion is a hot topic. Many countries have now set targets for 100% inclusion by 2025. This is an ambitious target, but phone mobile technology in particular creates the potential for much more rapid inclusion than in the past.

This policy guide provides policymakers and programme designers with an up to date view of what needs to be done to include the poorest people in financial services, and by doing so make a dent in their poverty. The guide highlights four promising ways forward for policies and interventions that aim to include the poorest faster than would otherwise be the case by linking informal and formal financial services, linking social protection with financial services, making maximum use of the digital revolution and promoting weather based insurance.

A brief analysis of panel household survey and other data tells us formal financial services (savings and insurance) other than mobile phone based payments do not feature strongly in escaping poverty, or sustaining escapes. The overwhelming result is that chronically poor people and other poor or vulnerable people either do not have access to or do not use these formal financial services. There is thus a long way to go to financial inclusion that makes a direct impact on the eradication of poverty. The guide highlights four promising avenues for financial services initiatives to include the poorest people. The evidence of the first three of these suggests the promise is real; on the fourth there is potential but still much to prove.

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William Smith, Lucy Scott and Andrew Shepherd