A Progressive Approach to Financial Inclusion

This paper uses a data-driven approach to demonstrate key principles to help inform strategies to drive financial inclusion and realize its benefits. The principles covered in the paper represent new definitions and approaches to financial inclusion and help set a strategic direction of how financial inclusion can be efficiently developed in a country. It measures adoption and degree of usage of financial products for 30 countries globally and covers the entire adult population in these countries. The findings of the study apply not only to consumers but also to businesses, especially small and medium-sized businesses. Key findings include:

• Financial inclusion is a progression that develops in steps, with payments as the optimal entry point;
• Usage of financial products is not guaranteed because of access and there are large gaps between access and usage of products, especially in payments;
• It is critical to comprehensively and accurately define access and usage of products;
• Financial exclusion is not limited to the developing world, developed countries can also benefit from inclusion initiatives;
• Understanding the current state of financial inclusion in a country can be critical to shaping its future strategy.