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financial inclusion

Reflections on social protection and poverty alleviation from the long term impact of Chile Solidario

Emanuela Galasso's picture
Productive inclusion is the buzzword taking shape in social policy circles in Latin America, and other middle income countries. Graduation out of social assistance does not equate with (or presume) a sustained exit from poverty.

As many middle-income countries are moving towards embracing cash transfers with or without co-responsibilities attached (and the recent hype of handing cash directly to the poor), there is an important wave of programs that provide “cash plus” intervention.

Towards a world that counts: an ID for every woman and every child

Mariana Dahan's picture

This week, the World Bank is hosting the Data2X and the Gender Data Revolution event to draw attention to some of the most disturbing issues in development. Too many people are still uncounted. Too much data is out of date, unreliable or simply not available. Too many people are not able to access and use the data they need to make informed decisions and hold others accountable.

Lack of data on women and girls has hindered efforts to advance gender equality and design evidence-based policies that can lift the multiple constraints holding them back – and shed light on many aspects of their work, health, economic status, financial inclusion, ownership of and control of assets, access to services, voice, and agency. In many countries, particularly in the developing world, these data simply do not exist.

Created by former U.S. Secretary of State Hillary Clinton,Data2X is an exciting initiative that aims to build new partnerships to improve data collection and demonstrate how better data on the status of women and girls can guide policy, leverage investments and inform global development priorities.

All over the world, women are denied basic services and protection of their rights because of deficient civil registration and national identification (ID) systems. Lacking records of their birth and civil status, they are excluded from health coverage, schooling, social protection programs, and humanitarian response in emergencies and conflicts.

Means versus ends: Deconstructing the Sustainable Development Goals and the role of identification

Mariana Dahan's picture
The post-2015 development agenda is being shaped as we speak. The United Nations recently released a report that synthesizes the full range of inputs received from various stakeholders. These inputs, among which the ones from the World Bank Group, are a substantive contribution to the intergovernmental negotiations in the lead up to the September 2015 Summit that will officially launch the new Sustainable Development Goals (SDGs) agenda.

But today, with 17 goals and 169 targets, the SDGs are a big mouthful for the global development community to chew on, let alone to digest. Some see a risk that they will be simply unimplementable.

However, the problem becomes a little more manageable if we reflect on the means towards the goals. Not all of the goals are unrelated. Measures towards some targets can open up new ways to achieve others. 

Consider, for example, target 16.9: By 2030, provide legal identity for all, including birth registration. These are actually two different, though related, targets as explained in the recent working paper by the Center for Global Development. Regardless the modalities to achieve it, the recognition of legal identity – together with its associated rights – is becoming a priority for governments around the world. Although there is no one model for providing legal identity, this SDG would urge states to ensure that all have free or low-cost access to widely accepted, robust identity credentials.[1]

With legal identity – including name, nationality and recognized family relationships – one of the basic human rights set out in the Declaration of Human Rights and the Convention on the Rights of the Child can be achieved and target 16.9 can stand on its own merits.

Mind, Society, and Behavior – and Financial Inclusion

Douglas Randall's picture

Like many World Bankers, I took some time recently to look through the newly released 2015 World Development Report “Mind, Society, and Behavior.” From my perspective, in the Finance and Markets Global Practice, one thing jumped out immediately: The report is packed with insights that are directly relevant to our work on financial inclusion.

In the Overview alone, the reader is met with an abundance of findings related to consumer protection, financial capability, savings and other key topics involving financial inclusion (grouped together under the theme of “household finance,” which is fully explored in Chapter 6). We’re told of how changes to the framing of payday-loan terms dramatically altered borrowing behavior in the Unitedc States; how embedding financial messages in an engaging television soap opera in South Africa improved the financial choices of viewers; and how SMS reminders increased saving rates in Bolivia, Peru and the Philippines.

Of course, this is not the first body of work to summarize key behavioral lessons learned from decades of careful research on financial inclusion: See, for example, Chapters 6-9 of Banerjee and Duflo’s Poor Economics or the Bank’s 2014 GFDR on Financial Inclusion.) But these examples do help drive home the key message of the report: Paying attention to how people think, and to how history and context shape their thinking, can improve the design and implementation of development policies and interventions that target human behavior.

The report highlights that psychological impulses such as present bias, loss aversion and cognitive overload can lead to poor financial decision-making. For those in or on the edge of poverty, the ramifications of these poor decisions – low savings, chronic over-indebtedness, investment shortsightedness – can be devastating. We are reminded that most adults in developing economies do not benefit from the sophisticated financial tools such as automatic salary deposits, mandatory retirement contributions, or default insurance programs that help mitigate the effects of automatic thinking.

Yet, as outlined in Chapter 6, there are a range of interventions that have been shown to help address behavioral constraints on financial decisions in a developing-country context. Many of those interventions take advantage of what we know about the natural processes of the mind, using techniques such as framing, default settings and emotion persuasion to nudge people toward better financial decisions.

The GSMA Code of Conduct for Mobile Money Providers: Does It Go Far Enough to Protect Consumers?

Ros Grady's picture


The recently launched GSM Association Code of Conduct for Mobile Money Providers is a welcome initiative. There is increasing recognition of the economic benefits that digital financial services can bring, along with an understanding that achieving ambitious financial inclusion targets may well depend on their rapid rollout. Such targets are being proposed by the World Bank, under the Maya Declaration and in other forums.

At the same time, there is a recognition that consumer protection is a critical element in building trust in the use of such services. See, for example, Principle 4 of the G20 Principles for Innovative Financial Inclusion and the recently held Responsible Finance Forum, as well as the outcomes of the 2014 deliberations of the 2014 Global Partnership on Financial Inclusion.

The code of conduct will apply to “mobile money providers” and to “mobile money.” The former term is not defined (could a bank be a provider?), whilst the latter term has a broad definition that provides (in summary)  that “mobile money is a transformational service that uses information and communication technologies (ICIs) and non-bank retail channels to extend the delivery of financial services to clients who cannot be reached profitably with traditional branch-based financial services.” The example given (in summary) is an e-wallet, payments-related service.

The object of the code is expressed as being, in short, to support the continued development of the industry by:
  • "Improving [the] quality of services and customer satisfaction;​
  • "Facilitating the implementation of trusted partnerships; and 
  • "Building trust with regulators and encouraging the implementation of appropriate and proportional regulatory standards.


To support these objectives, there are eight principles dealing with safeguarding client funds; measures to combat money laundering and terrorism financing; monitoring of staff, agents and entities providing outsourced services; reliable service provision; security of the mobile network and channel; the provision of information to customers; complaints and personal data.

Moving up the garment industry’s global value chain

Paul Lister's picture

Many African countries are striving to move up the global value chain in the footsteps of countries like China and (more recently) Bangladesh. We asked Paul Lister – Director of Legal Services and Company Secretary, Associated British Foods (ABF) – how ABF and its subsidiaries determine where it will source goods. He says that in the end, efficiency is key.

Textiles in Bongooo Bazaar, Dhaka, Bangladesh. Photo: Flickr @ dnevill (Dan Nevill)

Bangladesh’s inclusive Central Bank

Atiur Rahman's picture

Bangladesh is now the world’s second largest apparel exporter after China. Its garment industry accounts for 80% of its overall exports and around 4 million jobs. Atiur Rahman, Governor of the Central Bank of Bangladesh, tells us that the government sees employment (both formal and informal) as the link between growth and poverty reduction, with an emphasis on inclusive growth policy and financial inclusion.

Workers in the Wool Tex Sweaters Limited in Shewrapara, Dhaka. Photo: Abir Abdullah/ADB

Remittances: A Gateway to Financial Inclusion for Poor People

Gloria M. Grandolini's picture
As the United Nations marks International Migrants Day, it’s worth remembering that over 230 million people in the world are migrants. Whether they’re mothers or fathers, daughters or sons, wives or  husbands,  they left home to look for work elsewhere, usually abroad, to support families left behind.

​Remittance Markets: More court cases and higher costs due to Anti Money Laundering and Countering Financing of Terrorism (AML/CFT) Regulations

Sonia Plaza's picture
Last October, I wrote a blog on the closing of bank accounts of money transfer operators in Australia.  I reported that “Westpac would close the bank accounts of MTOs serving Somalia by the end of November.”

Closing of bank accounts of money transfer operators (MTOs) is raising remittance costs

Sonia Plaza's picture

As I mentioned in my previous blog, a renewed focus on Anti Money Laundering and Combatting the Financing of Terrorism (AML-CFT) regulations in Australia, the UK, and in the USA are impacting banks and MTOs.

Three effects on the remittance markets are observed. First, Banks stopped offering low cost remittance services. Second, banks closed accounts of MTOs. Two major banks, the Commonwealth Bank and the National Australia Bank, have closed already the accounts of MTOs in Australia. Recently, Westpac announced that it will close the bank accounts of MTOs serving Somalia by the end of this month. And third, small MTOs also closed since they could not any longer operate without bank accounts.  


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