In: Finance
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs, delivered in a responsible and sustainable way.
Being able to have access to a transaction account is a first step towards broader financial inclusion since a transaction account allows people to store money, and send and receive payments.
A transaction account can also serve as a gateway to other financial services, which is why ensuring that people worldwide can have access to a transaction account is the focus of the World Bank Group's Universal Financial Access 2020 initiative.
Comment on the above statement
By having access to transaction account people worldwide can
have access to demand deposit, term deposits facility and can gain
interest on it. It provides financial security to certain extent.
It also helps in transfer of funds at a faster rate. Social
security schemes, subsidies, etc. can be transferred to people
having transaction account. Loans for small business can be
available easily with customers having transaction account. In many
developing and developed countries people can’t access basic bank
facilities due to lack of an account in the bank. As per World Bank
2 billion people don’t have access to financial services due to
cost involved which means that services are not affordable. Other
reasons are lack of trust and higher distance of financial
institutions. World Bank has launched a specific program to
increase financial inclusion by 2020.
As per World Bank “India and China have the largest share of
unbanked people and together they account for some 32% of them. The
rest of the focus countries include: Bangladesh, Brazil, Colombia,
Cote d'Ivoire, DRC, Egypt, Ethiopia, Indonesia, Kenya, Mexico,
Morocco, Mozambique, Myanmar, Nigeria, Pakistan, Peru, Philippines,
Rwanda, South Africa, Vietnam, Tanzania, Turkey, and Zambia.”
Best of luck