Advisory Center for Affordable Settlements & Housing

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Document Type General
Publish Date 08/04/2015
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Published By the Economist Intelligence Unit Limited
Edited By Saba Bilquis
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Global Microscope 2015

Financial inclusion has come a long way. A little less than a decade ago, discussion in this area centered almost entirely around microcredit small loans allowing entrepreneurs at the bottom of the pyramid to expand their activities. While still a crucial service for these individuals, research by many institutions globally has shown that this was only one element of broadening access to financial services for the world’s poor. Today, the ability of financial inclusion to empower low-income populations worldwide has pushed it near the top of the sustainable development agenda. Financial inclusion, in its broadest sense, requires much wider access to a range of financial products for traditionally underserved or excluded populations. Accordingly, in the past few years, the substantial importance to economic development—and the potential to improve the lives of individuals of tools such as savings instruments, payment systems (notably electronic cash), and micro-insurance has become increasingly well understood. The latest demonstration of the growing consensus of the importance of financial inclusion is found in “Transforming our world: the 2030 Agenda for Sustainable Development”—the unanimously adopted UN General Assembly plan that succeeds the Millennium Development Goals.1 Not only does its preamble specifically mention financial inclusion, but five of the 17 overarching Global Sustainable Development Goals that the agenda champions (specifically, Ending Poverty; Ending Hunger; Gender Equality; Sustainable, Inclusive Economic Growth, and Sustainable, Inclusive Industrialization) note the need for improved or universal access to financial services. In short, financial inclusion is now recognized as one of several essential building blocks supporting key elements of the sustainable development agenda. As such, it is part of the foundation for the world’s wider hopes for progress.

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