The term Financial Inclusion has received enormous responses across the globe in the recent past. Financial inclusion is a socio-economic terminology means providing accessibility of financial services at affordable cost to the low income group in the society. Worldwide more than 2 million people do not have the accessibility to the formal financial system. They either live a very complex sort of financial lives or rely on informal financial services. Such exclusion from formal financial system makes their life measurable and it becomes very difficult for them to meet their financial desires. Financial exclusion has a direct correlation with poverty.
Financial inclusion broadly implies providing micro-credit facilities to disadvantaged section, spreading of banking system, minimising documentation etc, accessibility of financial products like savings, payments, credits, insurances, health, education etc. The first step for broader financial inclusion is to have access to make transaction in a bank account. It is one of the prime focuses of World Bank Financial Access Initiative, 2020.
Despite economic development and modernisation, the gap in access to financial services is becoming very wide. Studies suggest that in developing economies, around 70 percent of the population do have access to formal financial services. Some groups like women, rural people, dalits are in more vulnerable position. McKinsey and Company in its research paper published in 2010, titled “Global Financial Inclusion Fall 2010: Achieving full financial inclusion at the intersection of social benefit and economic sustainability”, found that despite rapid economic development and modernization of world economy, gaps in financial access remain severe. More than half the world’s working-age population does not have access to quality, affordable financial services which are about 2.5 billion adults – 2.2 billion of whom live in Africa, Asia, Latin America, and the Middle-East countries. The situation remains almost same until recently as confirmed by the World Bank data as around 50 percent of the world’s adult’s population do not have account with formal financial institutions.Read More