Financial Inclusion

The provision of equally available and affordable access to financial services for everyone, regardless of their level of income

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What is Financial Inclusion?

Financial inclusion refers to the provision of equally available and affordable access to financial services for everyone, regardless of their level of income. It applies to providing services to both individuals and businesses.

Financial Inclusion


  • Financial inclusion refers to providing greater access to financial services for poor and low-income individuals, as well as businesses with limited resources.
  • Financial inclusion initiatives help boost the economy of poorer regions and countries.
  • The rise of fintech is considered a major contributor to increased financial inclusion.

Understanding Financial Inclusion

Financial inclusion is not only important for people in undeveloped countries. It’s estimated that as many as one-fourth of people in the United Kingdom are low-income individuals with limited access to financial services.

A policy of financial inclusion is a focus of the World Bank, as demonstrated by its Universal Financial Access 2020 initiative. The initiative aims to provide at least one billion people worldwide with at least basic access to financial services, such as maintaining a bank account or other financial account from which they can send and receive payments and store their money.

By the World Bank’s estimate, about 1.7 billion adults – roughly one-third of the world’s adult population as of 2020 – are unbanked or underbanked.

The United Nations Development Programme (UNDP) is another initiative that lists increased financial inclusion as one of its goals. The UN’s financial inclusion projects also include a particular focus on aiding unbanked or underbanked women.

The private sector also strives for greater financial inclusion, which has been shown to provide an economic boost to countries. Of course, greater financial inclusion also means greater potential profits for banks and other financial institutions.

Barriers to Financial Inclusion

There are many barriers to financial inclusion, the first of which is extreme poverty. People with little to no money have little to no need for financial services.

In addition to widespread extreme poverty, which still exists in many areas of the world, other significant barriers often make it difficult for poor and low-income people to access basic financial services.

Financial institutions, such as brokerage firms and banks, often impose strict and detailed documentation requirements for opening an account or making money transfers. People who lack the required documentation are then effectively shut out from accessing financial services.

Also, the lack of nearby financial institution offices and high minimum balance or opening account balance requirements provide further barriers to financial inclusion.

Finally, many poor and low-income individuals lack the knowledge of how to avail themselves of, or use, financial services.

Why Financial Inclusion is Important

Lack of access to basic financial services can create crippling financial problems for people. They may have no way to receive certain payments, have to pay higher amounts for basic services such as electricity, and are prevented from making purchases due to having no easy means of submitting payments.

For example, consider how much of modern commerce is conducted online – then think about how an individual with no bank account or credit card could go about ordering something online – like at

Having access to financial services is important to both individuals and companies, as it provides a means of storing money, managing payments and cash flows, accumulating savings, accessing credit, and making investments. Such access is also key to acquiring assets and building financial security.

Providing greater financial inclusion to small businesses is important because it can help to create more jobs and improve the standard of living in a community.

The Rise of Fintech

The rise and growth of financial technology – commonly referred to as fintech – has been an important factor in increasing financial inclusion. It has not only greatly broadened access to financial services, but also significantly reduced the cost of many financial services.

  • Online peer-to-peer lending, companies such as LendingClub and Upstart, have increased access to loans and credit for people with less than impressive credit ratings.
  • Automatic savings and investment apps such as Acorn and SoFi have made it easier for people to access savings and investments.
  • Robo-advisors, which charge fees well below those charged by personal financial advisors, now provide many more individuals with professional investment guidance at a low, more affordable cost.

More Resources

CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful:

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes!

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