> Posted by Holly Padgett
Can financial access and citizenship feasibly begin at birth? According to the Financial Access at Birth (FAB) initiative, with the right resources and momentum, it can. Bhagwan Chowdhry, FAB’s founder, recently published an article in the Stanford Social Innovation Review (SSIR) that highlights the main ideas behind FAB and addresses some of the tough questions raised by supporters of the program.
The aim of FAB is to provide an initial deposit – say $100 – in an electronic savings account for every child at the time of birth. The bank account would be paired with a universal ID and mobile technology, creating a powerful system of incentives that would foster financial inclusion and possibly access to other services. Ultimately this system would lay the “plumbing” for numerous social, financial, and health services. According to Chowdhry, “it is an investment for an economically democratic society”.
FAB, which has been hosted by CFI since 2010, has been received with enthusiasm from students, executives, and the media. It has since developed its model through research and expert consultations, with the next step of developing pilot programs and implementation techniques.
In the SSIR article, Chowdhry explains the incentives that would motivate banks to become more financially inclusive and discusses how FAB would work to prevent fraud. Chowdhry also gives a brief overview of how FAB would prove to be economically viable, with benefits far outweighing the initial investment.
Chowdhry is steadfast in maintaining the importance of expanding financial access: “One thing that is certain and nonnegotiable is our unwavering belief that every human deserves the dignity of financial citizenship and that financial inclusion for all is within reach.”
To read the full article, click here.
Have you read?
What’s ‘A FAB Idea’? Financial Access at Birth, Says ‘The Economist’
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February 22, 2012 at 8:00 am
Fonahanmi Idris
Financial Access at Birth as proposed by Bhagwan Chowdhry is very very good and should be encouraged.
My concern as a father, resident and working in Nigeria is that anyone who can afford to pay $100 into a permanent fund account on behalf of his child has already broken the yoke/circle of poverty.
I am sure the class of people whom the writer has in mind are those who intend to maintain and sustain their dynasty having broken the cord of poverty.
$100 would go a very long way transforming the living standard and life style of many active poor Wo(men) in my area.
I will want to suggest that a contribution of $10 to mark each birth date anniversary of the child be paid into a permanent fund account such that the child will only have a soft loan/cash inheritance to start life with at the age of 18 years.
February 23, 2012 at 12:40 pm
Holly Padgett
Thank you for the comment Fonahanmi.
At this point I believe FAB envisions the initial $100 deposit being provided by an outside source, not actually by the family. Therefore the program could potentially reach even the poorest. Of course, as the article points out, it will be necessary to make this economically sustainable in order to have success.
It will be interesting to see how the FAB concept is received during its pilot stage. I’m sure one very important part of the pilot process will be to gain input from the families involved in order to shape the program.