> Posted by Susy Cheston
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to Sonja E. Kelly, Fellow, Center for Financial Inclusion at Accion.
Are we “rushing inclusion perhaps to its early death,” as a recent post from the Kenya Financial Education Centre asks? In the post, John Gitau’s concern is that in our rush to access, we are getting ahead of clients’ capacity to use services wisely and well. It’s a good concern to raise, and it is especially legitimate when posed by someone who sees the fall-out up close and personal.
And yet the Center for Financial Inclusion is spearheading a Financial Inclusion 2020 project that is breathtaking in its audacity: building a movement to full financial inclusion for all, using the year 2020 as a focal point to clarify thinking and galvanize action. The argument of the Center is that working backwards from 2020—near enough that we can track our progress, far enough away that change is possible—results in a different kind of thinking than incremental strategies to add a few million clients here and there. To this end we are working with a wide range of partners to build a road map to full inclusion, pushing to accelerate what we believe to be critical access to financial services for those who are excluded. We are casting our net wide—engaging any and all who want to be involved in this effort.*
So, we are building a road map to inclusion–or, as our friend from Kenya might ask, are we building a road to ruin?
For me, the answer is found in the Center’s vision of full financial inclusion:
We envision a financially inclusive world in which all people who can use them have access to a full suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the clients. Services are delivered to financially capable clients by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, and rural populations.
The five dimensions at the beginning of the vision balance issues of access with an emphasis on the quality of services. Of course, “quality” is a loaded term. It includes affordability, convenience, and a high value on customer care. The definition also makes clear that a network of players are needed to bring about full inclusion in this manner, reducing risk to any one player, and increasing the overall standards of financial products on the market.
Furthermore, it is not a coincidence that the Financial Inclusion 2020 staff share an office with the Smart Campaign staff, which focuses entirely on client protection. Our “Road Map” will address expansion of access and use, through technology and product range, but these topics are balanced by client-focused topics such as financial capability, client protection, and ensuring that products are informed by an understanding of client needs. As our report, “Opportunities and Obstacles to Financial Inclusion,” put it:
“It’s the clients, stupid!”
With this mantra as the “true north” on our compass, we hope our work to advance financial inclusion will result in services that, as our friend in Kenya concludes, “are easy to understand. Before long, many products can be introduced, and inclusion will then become a daily affair as opposed to a destination goal post.”
Well said, friend.
* Note: The Center welcomes engagement from all stakeholders involved in financial inclusion. If you would like to review written products of the various Consultative Process working groups, and provide written feedback to help refine the road map to full financial inclusion, please email Anita Gardeva, of the Center for Financial Inclusion.
For more information, sign up for updates from the Financial Inclusion 2020 campaign.
Image credit: Sebastian Niedlich
Have You Read?
Structure for Success: Lessons from a Kenyan Financial Literacy Teacher
Financial Capability: Not Many Answers, but Lots of Great Questions
Facebook
Twitter
3 comments
Comments feed for this article
July 10, 2012 at 7:58 am
Cate Gitonga
Hi Susy.
This is a very exciting article. I am a firm believer in the need for financial literacy and especially the young generation. . The 2020 roadmap means there is less than 10 years to reach the financial inclusion 2020′s targets. I wish to comment on the fact that we would need more time to get the client / citizen to a level where they are active participants of the affordable financial services. I am sure you already know this and 2020 is a good first goal to achieve longterm financial inclusion.
I shall base my comments on the paragraph in your article as below;
” The five dimensions at the beginning of the vision balance issues of access with an emphasis on the quality of services. Of course, “quality” is a loaded term. It includes affordability, convenience, and a high value on customer care. The definition also makes clear that a network of players are needed to bring about full inclusion in this manner, reducing risk to any one player, and increasing the overall standards of financial products on the market.”
My point of view is that these dimensions are great and tend to cover one end of the yard stick. Fairly few financial market stakeholders seem to put in time to educate the client (citizen) by providing longterm financial education.- different from the short term capacity building projects, workshops and training’s that are well embraced by Financial intermediaries. This I appreciate and I have been a beneficiary of the same. However one question that always comes out is “I wish I was taught this at an early age! then I would have been wiser”
So, what if the dimensions covered heavily the other end of the yard stick- Financial literacy for the younger generation in a fun and interactive way so that the young people appreciate over the longterm the value of entrepreneurship, saving, budgeting, investing etc in a fun and interactive way so that they do not embrace it the way most of us have ie that finances are a hard aspect to understand hence it is meant for the chosen few who understand it. Yet I believe the work being done by financial inclusion 2020 staff is for the financial inclusion of the masses.
This dimension may take over 10 years to nurture, then we get this younger generation to ‘pay it forward ‘ by training the younger ones by example and the spiral effect of financial literacy will be established in future generations . ( i wish to use an example how health practitioners in my country Kenya have tackled the spread of preventable hygiene related illnesses by teaching young kids as young as from 3 years the importance of washing hands after visiting the loo, so now I am above 30 years old and we have all grown up washing our hands like clock work after visiting the loo because it was a habit instilled in us at a young age. We may not have know then what hand washing meant but when we are now older, we know the benefits and easily insist on the same to the younger generation.-and I believe the spiral effect has already been created by the health practitioners who 30 years ago had perhaps that long term vision. )
So in the same breath, I’d wish to advocate for financial literacy learning approached in a long term perspective and it would taught in a fun and simple way to the younger generation in primary, high school and tertiary institutions. It doesn’t have to take the formal route of having financial literacy taught in the mainstream classroom, – because this route off-course would take alot of advocacy and lobbying from alot of stakeholders to have it in mainstream learning.- but from my experience with teaching experiential financial literacy to the youth in these institutions ( secondary and tertiary institutions), it has worked best when it is informal (not in the classroom) and make it fun.
This is the longer route to financial inclusion of the masses and what would come out of it is the longterm practice which then over the years becomes a habit of investing, saving, entrepreneurship etc.
Any way, that’s my thought on financial inclusion 2020 which is a wonderful concept that I have admired and which we should all hold on to. We all need to take the first step in inclusion and then when the momentum starts, we shall have a wiser breed of financially literate generation.
Be well.
Cate.
July 10, 2012 at 1:34 pm
Susy Cheston
Cate, thanks for such a thoughtful comment! I could not agree more. Our road map to financial inclusion includes a focus on financial capability, among other topics that were identified as key opportunities through our “Opportunities and Obstacles to Financial Inclusion” survey and report. As part of those conversations, we have quickly realized that the picture is much bigger than having a financial service institution provide financial education to a group of clients. In order to achieve not only access for all, but also quality, it will take a lot of players–suppliers, regulators, and enablers. You provide a wonderful vision for how financial capability can move forward, and I hope the recommendations from our road map will help promote this kind of big thinking and lead to action to bring that vision about. You also bring in an important perspective about youth–one of six client segments we have identified as part of our effort to include client perspectives. Hope you will stay tuned to comment on our draft road map when it comes out in the fall. Susy
September 9, 2012 at 4:56 pm
joseph wachira
Good work Mr. John Gitau,your paper is very educative