Inclusive Financing A Need For The Financially Humbled
Many emerging economies of Asia, Africa and South America have large shares of the inhabitants living under poverty and have less access to economic or financial resources and services. Those people are either too poor to save or too risky to offer money to. Since the last many decades, many developed nations and world’s financial institutions are trying to pull this group of people out of poverty. Specialized schemes and methods to give financial amenities to these people have been made. It is known as inclusive financing. People belonging to this category have been receiving varied choice of financial help by world institutions for their stabilize growth in the society. Inclusive finance to these people includes savings, source of loans, insurance and various other financial aids. Over the past many years, it has been noted that appropriate financial support can encourage small enterprise activities and can provide them a better standard of living. Very Recently RBI Governor Raghuram Rajan called for leveraging technology to achieve financial inclusion.
[Source : RBI working paper on Financial Inclusion in India A case study of West Bengal by Sadan Kumar Chattopadhyay]
When individuals and businesses together come up with a range of financial services for the underprivileged within reasonable cost, then financial inclusion is said to be achieved. And when financial inclusion goes through increased savings, credit, insurance and payment services then it contributes to sustainable economic growth. Sustainable economic growth determined by the socio economic structure of the region. If adequate provisions are to be taken to curb poverty growth, then policy makers and politicians are also required to pitch in it equally.
Goal of financial inclusion
The main goals of financial inclusion since the last two decades have focused mainly on the access for all households to a full range of financial services. They verily include savings, deposit services, payment and transfer services. Aim to provide sound and safe institutions by clear regulation and industry performance standard. However, continuity and certainty of investment is a must. Ensuring choice and affordability by competition is also a must to do. The main challenge however is to address the problems that exclude a large section of people from full participation in the financial sector. The main aim thus remains for financial powers and institutions to join and help poor improve their standard of life.
Institutions to work for financial inclusion
Inclusive finance holds the supply of loans, savings, and insurance. These services are mainly provided by microfinance institutes (MFIs). Appropriate financial services can inspire small enterprise events and improve the standard of life of households. At the global, regional and “country level” they provide popular analysis report. This financial organization has been working for the past two years with various policy makers, “financers”, to collect isolated dates and conclude on them.
Budget analysis to financial inclusion
The expenditure that has been incurred and the budget of the past two decades for financial inclusion can tell us how far the world had progressed in reaching out to the poor. Improvement in their condition of living can now only be analyzed by the budget tracking. Tools to track public expenditure by different civil societies have been adequately made. Such tools include social and public accountability surveys. Many adequate measures to connect the poor with the banking institutes also have been made. For such measure, accountability is required, which can only show us the statistics of improvement.