Question

1 a) What is financial inclusion

b) In what ways does financial inclusion reduce poverty and boost prosperity?

Answer 1

1. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs-transactions, payments , savings , credit and insurance-delivered responsibly and sustainably. Financial inclusion aims to eliminate obstacles that exclude people from financial sector involvement and to use these programs to better their lives. It is also called inclusive financing

b. The advent of financial inclusion facilitates social inclusion through easy access, affordability and the use by the "newly banked" of rules-based structured financial services. They are predominantly underprivileged segments of the population, disadvantaged groups such as rural dwellers, women, and low-income families that greatly benefit from basic financial services such as deposits, borrowings, loans, and insurance. Because of inadequate income rates and consumer inequality in developing countries, millions of people remain mistakenly excluded from the financial system , causing possible savings losses, investment funds and asset accumulation.

Financial inclusion has been viewed in recent years as a transformative resource for developed and developing countries alike to achieve multidimensional macroeconomic stability, sustainable and inclusive economic development , job generation , poverty reduction and income equality.