Financial inclusion at scale: An IDRC-Alliance for Financial Inclusion partnership
Access to and use of formal financial services can help the world’s poorest people prosper. Financial services help people manage risks, and they provide a safe place to save money for emergencies, to invest in education, or to realize small business opportunities.
The Global Financial Inclusion Database (“Global Findex”) shows significant progress in expanding access to financial services: in 2014, 62% of the world’s adult population had an account in a formal financial institution, up from 51% in 2011. Nevertheless, this leaves more than 2 billion people, particularly the poorest, unbanked. Among the poorest 40% of households in developing countries, more than half are without bank accounts. Further, while the percentage of women with an account has increased, a significant gender gap persists; in developing countries only 37% of women have a bank account.
The Alliance for Financial Inclusion (AFI) is a global network owned and driven by policymaking and regulatory institutions from almost 100 developing countries. It reaches very large numbers of unbanked people and its members include central banks, ministries of finance, and other regulatory authorities. AFI has a strong record of influencing policy.
This project builds a partnership between AFI and IDRC. The aim is to enhance policies and regulations to scale solutions for financial inclusion for the most vulnerable—with a specific focus on women—through research, peer learning, and capacity building for policymakers and financial regulators. AFI will pull together existing evidence and develop new evidence to address financial inclusion challenges, and will support policymakers looking for solutions. The partnership will focus on four areas: addressing the gender gap; fostering digital financial services; using financial inclusion data to improve policy; and launching a Latin American public policy initiative on financial inclusion (in particular through working on national financial inclusion strategies).
It is expected that this partnership will enable many AFI member institutions to design, adopt, and implement policies that will improve livelihoods for millions of financially underserved people around the world.