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> Posted by Center Staff
Expanding financial inclusion to the 2.5 billion unbanked individuals around the world is essential, but why does it matter, and is it possible in the next six years?
In recent years, the inclusion movement has achieved critical support and rapid progress. Last year universal financial access by 2020 was endorsed by World Bank President Jim Kim. Technology-enabled business models are catalyzing outreach, building on infrastructure like the mobile phones now accessible to six of the world’s seven billion people.
In the following video, global financial inclusion leaders explore the questions of whether financial inclusion is possible by 2020, and why we should work towards that goal.
> Posted by Larry Reed, Director, Microcredit Summit Campaign
Why does the Microcredit Summit Campaign wholeheartedly support the goal of “Finance for All by 2020?” Because we see it as an important step in reaching the larger goal of ending extreme poverty by 2030.
From October 9 to 11 we held the Microcredit Summit in Manila on the theme “Partnerships against Poverty.” Delegates of the Summit drafted and approved the Partnerships against Poverty Summit Declaration, listing the principles that we will follow to insure that microfinance works as a worthy partner in the movement to end extreme poverty. The opening commitment of the declaration states:
First, we commit to putting the extreme poor first. Their voices must be heard in our movement, and they must be full participants in the process of improving their lives and our services. They are not only our clients, but also our biggest resource.
To better reach and serve the poorest and most vulnerable populations, we will ensure that we include women, children, the elderly, the disabled, refugees, the LGBT communities and members of cultural and religious minorities.
Achieving “Finance for All” means that we must develop financial products and services that meet the needs of the poorest and most vulnerable populations. The organizations partnering with the Microcredit Summit Campaign have committed themselves to work with governments, mobile network operators, payment providers, and others to help design and test these products.
> Posted by Sonja E. Kelly, Fellow, CFI
The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
Since Sendhil Mullainathan is speaking at our Financial Inclusion 2020 Global Forum in two weeks, we ordered a few copies of his new book with Eldar Shafir to pass around the office. As a result, the hypotheses of Scarcity are informing our thinking both on our own habits and on financial inclusion.
The title of the session in which Mullainathan, a Professor of Economics at Harvard University, is speaking is “Why Financial Inclusion Means More Than We Ever Knew.” A mouthful, yes, and a bit mysterious. To unravel the mystery, one has to start with Mullainathan’s hypothesis that scarcity of some kind of resource—money, time, even social relationships—brings about an intense focus on the scarce resource, a focus that has negative effects on the way we think and act in areas of our lives outside that of the scarce resource. If this is true, financial inclusion is a game-changer that both prevents scarcity and alleviates its effects.
On first reading, Mullainathan and Shafir’s book seems to apply immediately to my own life. In my case, a scarcity of time means that I often adopt a focus on time and resulting tunnel vision for the task at hand. This focus has some positive effects—I produce work much faster than I would if I had more time. And it has some negative effects—I forget special events like my closest friend’s birthday (I’m sorry, Sarah! Does mentioning you in this blog post make up for it?). In essence, the authors contend that the single-minded focus that severe scarcity creates absorbs so much psychic energy, mindspace, bandwith, or whatever you may call it, that rational decision-making suffers.
This tunneling—devoting a great deal of bandwidth to a single resource—produces intense focus on the scarce resource, but also catastrophic failure on the things that get neglected to make “space” for such a focus.
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