Focusing on Clients to Move the Needle on Financial Inclusion

The drive to universal financial inclusion took a big step forward in 2015. The World Bank’s Global Findexreport told us that the number of people in the world without access to any form of financial services had fallen by 20 percent in the past three years, to two billion. That is still a large number of poor people looking to benefit from the financial products and services that people in wealthier countries take for granted, but it shows that efforts to advance financial inclusion are paying off.

At The MasterCard Foundation, we believe that a key element in enabling more poor people to be financially included is for financial service providers to truly understand the needs and desires of the economically disadvantaged. More than designing products and services that they hope might appeal to every segment of the population, banks and other financial institutions could expand their client base by developing products and services that they know will be of use to poor people.

For too long, most commercial banks and other financial service providers in developing countries have ignored the poor, assuming that they have little money to save and are too big of a credit risk for any loan. Yet studies, notably the ground-breaking Portfolios of the Poor, have shown that poor people lead complex financial lives, juggling incomes and expenditures with a keen sense of fiscal acumen. Given an opportunity to deal with a commercial bank on terms that they can accept, they would do so.

The explosive growth in some African countries of mobile technology to expand banking is testimony to this. When offered a financial service, such as M-Pesa in Kenya, that is secure, convenient and affordable, millions of poor people have flocked to use it.

The Findex indicators show that while two per cent of adults globally use a mobile bank account, in 13 African countries more than 12 percent of adults do so. In five of those countries – Côte d’Ivoire, Somalia, Tanzania, Uganda and Zimbabwe – more adults have a mobile account than an account at a financial institution.

Putting “clients at the centre” of thinking by financial service providers will accelerate financial inclusion in the years ahead. It will allow hundreds of millions of people to save, transfer and borrow money without fear. It will lead to improvements in their livelihoods and those of their communities.

This is why the over-arching theme of the upcoming MasterCard Foundation Symposium on Financial Inclusion is “clients at the centre”. Some 325 of the world’s leading financial practitioners and experts on financing will be in Cape Town to share their work in connecting poor people with financial services that improve livelihoods and support economic development.

You can follow the discussions on Twitter at #SoFI2015 or on the Symposium website: www.mastercardfdnsymposium.org  Along with those who are in Cape Town, you’ll discover some innovative approaches that are changing the lives of people living in poverty for the better, and in turn moving the needle on financial inclusion.