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Organizations that collectively serve 80% of Australia’s population are working together to advance financial resilience 

> Posted by Good Shepherd Microfinance

If financial inclusion is looked at as a problem of access, Australia is doing very well. Over 98 percent of the adult population has access to at least one financial service. By comparison, the average level across high-income countries is 91 percent, and the average across low-income countries is 28 percent, according to the Global Findex. But scratching the surface finds many people who are struggling with financial hardship.

3.3 million Australian adults (almost 18 percent of the population) lack access to financial products and services that are considered safe, affordable and appropriate for their needs, and 2.4 million experience severe financial vulnerability, based on research on financial resilience conducted by the Centre for Social Impact (CSI).

Recognizing that collaborative action is needed to improve financial inclusion and resilience for the millions of Australians who are left behind, 30 organizations have joined forces to co-design the Financial Inclusion Action Plan (FIAP) program. Led by Good Shepherd Microfinance on behalf of the Australian Government in partnership with EY and CSI, this program helps participating organizations (Trailblazers) understand their role in advancing financial inclusion and resilience, and take practical actions to realize this potential, for their own clients, employees, suppliers and community partners.

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> Posted by Vinita Godinho, General Manager – Advisory, Good Shepherd Microfinance

You might not know it, but one in every five Australian adults (3.3 million people) is financially excluded, unable to access safe, affordable, and appropriate financial products and services when they need them. This increases their likelihood of experiencing financial hardship and poverty. Two million people in the country also experience high to severe financial stress, reducing their resilience or ability to recover from financial shocks. Those impacted, particularly women, also experience poorer socioeconomic and health outcomes, especially lower education, employment, and income status. Whose problem is this to solve?

Against the backdrop of ongoing global financial and political uncertainty, financial inclusion challenges exacerbate the divide between the ‘haves’ and the ‘have-nots’. In Australia for example, those holding the top 20 percent of wealth have around 70 times more than those in the bottom 20 percent. The country’s growing income inequality does not reflect changes in household characteristics, rather changes in the size of persistent and transitory income shocks. Lack of inclusion and resilience via insurance, savings, credit, and payments therefore compound the impacts of growing inequalities of opportunity, stifling upward mobility between generations, increasing social tensions, and reducing economic growth.

So who’s best placed to respond to this growing problem – the government with its policy vision for financial well-being and capability; business which designs product offerings and offers employment; researchers who study inequality, gather evidence and create theories; or the community sector, which is usually the first line of defense for excluded and vulnerable Australians?

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Adam Mooney is the CEO of Good Shepherd Microfinance, Australia’s largest microfinance organization.

As the first day of spring arrives in the Southern Hemisphere, we see new buds emerging, fresh blooms, and a new sense of hope and optimism. In Perth, Western Australia, the Global Partnership for Financial Inclusion (GPFI) meets Monday, September 1 at a forum to stimulate, coordinate, and reflect on action to bring about financial inclusion. I am hopeful as the GPFI prepares recommendations for the G20 meeting in Brisbane in November this year, it will commit to powerful actions to boost the well-being of at least 2.5 billion people living in poverty around the world.

There is clear evidence that improving the economic well-being of the poorest third of the world’s population will have a profoundly positive impact on all people. Economic mobility and resilience at the family and community level directly leads to increased security, human connectedness, and hope for everyone. It also enables self-directed action to realize one’s own dreams and aspirations, however modest, leading to overall contentment. Yet despite such a compelling economic and social case, poverty and inclusion remain ideologically contested concepts where causality is often polarized into either inadequate human behavior or opaque environmental factors.

Speaking at the C20 Summit last month, I suggested that targeted inclusive finance around the world can and will be a key driver of economic growth, especially through production, employment, and education. It is not a coincidence that the number of people living in poverty is the same as those that are unable to access appropriate financial services, as measured by the World Bank’s Findex reports. These reports state that only half the world’s adults have bank accounts and of those, only 15 percent believe that their needs are understood and met by the products they have access to.

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> Posted by Elisabeth Rhyne, Managing Director, CFI

On a trip to the antipodes you expect to find things a bit upside down. You look out on the underneath side of the universe and see mammals that lay eggs. On my recent trip there, I discovered that the microfinance world is a little upside down, too.

The biggest microfinance program in Australia, Good Shepherd Microfinance’s No Interest Loan Scheme (NILS) is mind-bendingly different from most microfinance operations. In the first place, it charges no interest or fees – technically it’s a repayable grant. Secondly, it is explicitly designed to assist people to obtain consumer goods, such as a refrigerator, washing machine, or laptop, not to operate a business. And thirdly, far from addressing the informal sector, most of the borrowers are recipients of some form of public welfare support.

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Credit Suisse is a founding sponsor of the Center for Financial Inclusion. The Credit Suisse Group Foundation looks to its philanthropic partners to foster research, innovation and constructive dialogue in order to spread best practices and develop new solutions for financial inclusion.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.