Financial Inclusion - A Foothold on the Ladder Toward Prosperity? An Evaluation of World Bank Group Support for Financial Inclusion for Low-Income Households and Microenterprises

Access to financial services has long been believed to lift people out of poverty. Although 700 million people have gained access to formal financial services in the past few years, 2 billion remain excluded. Financial inclusion—access by poor families and microenterprises to financial services—has been an objective of the World Bank Group for a long time, reaffirmed in 2013 by President Jim Kim’s commitment to the Universal Access Goal by 2020.

This evaluation by the Independent Evaluation Group (IEG) examines the relevance and effectiveness of seven years (FY07–13) of World Bank Group support to financial inclusion and its impact on the poor. It found that the World Bank Group contributed significantly to progress in financial inclusion globally and in client countries. It has “reached” a substantial share of the microfinance industry. Its support is strategically aligned with countries’ needs, focusing primarily on countries with low inclusion rates and addressing development priorities. The Bank Group has also contributed to the sustainability of microfinance services.

Yet the Bank Group’s approach to identify and tackle constraints to financial inclusion at the country level is not sufficiently comprehensive. This is of particular concern for areas that are not subject to prudential regulations, like mobile money and rural savings and credit cooperatives. Even though the Bank Group was able to leverage its impact through international partnerships, these bear costs and risks and often lack results frameworks.