"Financial inclusion." This phrase has been found in several recent reports. But what does “financial inclusion" truly mean? More important, what does it mean for women who constitute nearly half of the global population?
Financial inclusion is defined in the Global Financial Development Report as the “proportion of individuals and firms that use financial services.” It is one of the main catalysts of economic growth and helps to reduce poverty in the world. Access to financial services is one approach to greater financial inclusion. As all formal transactions are tied to accounts, ownership of accounts is an important aspect to measure the degree of financial inclusion. There are several crucial benefits to having a bank account, such as: facilitating the saving process; facilitating the receiving of government payments; and enabling entrepreneurship through the building of credit.
Acess to financial services has been expanding steadily as many countries have been adopting national strategies to achieve financial inclusion. (Financial inclusion strategy is defined as “road maps of actions, agreed and defined at the national or subnational level, that stakeholders follow to achieve financial inclusion objectives.”) Yet large gaps and hurdles to access financial systems remain worldwide. (See female percentages with bank accounts at formal financial institutions in 2011 based on the World Bank’s Financial Inclusion Data.)
These gaps and obstacles are especially arduous for women, for no reason other than their gender! The Findex survey, for example, shows that women refrain from opening personal accounts because they rely on their relatives’ accounts. The Global Financial Development Report of 2014 links this matter to the income inequality and the quality of the economic institutions.