Getting Inclusion Right: What Will It Take?

Findev: This year marks the fourth annual Financial Inclusion Week, a global collaborative event that the Center for Financial Inclusion (CFI) launched in 2015. How did the idea for this event come about, and what does CFI hope to achieve with this week-long focus on financial inclusion?

Beth: We launched Financial Inclusion Week to engage the wide variety of actors involved in financial inclusion to coalesce around a shared vision and towards full global financial inclusion. Now in its fourth year, and with an ever-growing list of partners, we are pleased to see that Financial Inclusion Week has become an annual focal point to assess the progress of the entire community towards greater financial access, usage, and financial health.

FinDev: The theme for this year’s Financial Inclusion Week is “Getting Inclusion Right.” Why did you choose this theme? What to you are the most important aspects of financial inclusion that we have still yet to get right?

Beth: Early in CFI’s life, we put forward a vision for financial inclusion that consists of a full suite of services, provided with quality and consumer protections, to everyone who can use them, in a competitive marketplace, to financially capable customers. This is what we mean by getting inclusion right. In reality, there may be very few places in the world that truly get financial inclusion right. The sector has made a lot of progress on access to payments, but still has far to go on savings, credit and insurance, as recent Findex data shows. In terms of quality, we’ve made great strides in convenience, but not so much in affordability and relevance, and the record on consumer protection is mixed. The ecosystems are gradually improving, but new issues arise as technologies shift the competitive landscape. And we are very far from combining our knowledge of what works to increase financial capability (it’s not easy) with commitment by financial service providers and others to apply that knowledge.

Early in CFI’s life, we put forward a vision for financial inclusion that consists of a full suite of services, provided with quality and consumer protections, to everyone who can use them, in a competitive marketplace, to financially capable customers. This is what we mean by getting inclusion right.

FinDev: How does CFI work with partners around the world to promote Financial Inclusion Week? What are some of the most successful collaborations you've seen over these past four years?

Beth: Each year, CFI extends an open invitation to organizations and individuals in the financial inclusion space to participate in and contribute to Financial Inclusion Week. We encourage our partners to host a conversation in a format of their choice – which can include webinars, in-person events or blog posts. Our partners have access to resources and materials that they can use to plan and promote their events. We find that the most successful collaborations are those in which partners join forces by thinking through the tough questions together before presenting their insights to the broader Financial Inclusion Week community.

FinDev: This year’s Financial Inclusion Week coincides with the Center for Financial Inclusion’s 10^th anniversary. Congratulations! What are you most proud of from CFI’s first decade?

Beth: I am very proud of many of the things CFI has accomplished over the past decade – from helping to forge a financial inclusion community through our research and convening, to offering high quality executive education through the Africa Board Fellows program and our partnership with Harvard Business School, to calling attention to issues such as the need for financial preparation for aging and financial inclusion of persons with disabilities. But if I have to single out one thing, it would be the Smart Campaign, which has helped ensure that consumer protection is an integral part of any conversation about the future of financial inclusion, and what’s more, has helped develop and spread many of the tools providers need to implement sound consumer protection practices.

It will take many different kinds of financial service providers to get inclusion right.

FinDev: What about lessons learned in these ten years? Any spectacular failures, or at least some growing pains?

Beth: CFI emerged from deep roots in the microfinance sector, and one of our initial aims was to help that sector transition from its traditional lending methodologies, to embrace that full suite of products mentioned above and to take advantage of emerging technologies. This has been harder than we expected. While some microfinance institutions have made these shifts, more have remained largely the same – and for very good reasons. It’s difficult and sometimes just not possible to fundamentally change institutions, especially institutions with successful models. So, to pursue our vision for inclusion, CFI has welcomed relationships with a wide range of actors, especially including mainstream financial institutions, payments providers and fintechs – in addition to microfinance institutions. It will take many different kinds of financial service providers to get inclusion right.

FinDev: Looking ahead, what secret hopes do you harbor for CFI over the next ten years? And more broadly, for the financial inclusion sector?

Beth: In recent years, there has been tremendous progress in reaching low-income people with financial services that meet short-term and daily needs, and that is important because effective day-to-day financial systems are the foundation for financial health. However, people are only truly financially healthy if they can recover from the inevitable shocks poor people are exposed to and if they can pursue their major life goals. Here we see much less progress. In the next 10 years, I’d like to see attention turn to developing and scaling products that enable people to improve their shelter, educate their children (and themselves), maintain their health, build assets, and enjoy a comfortable old age.