Financial Conclusion: Why Is Financial Inclusion Important?

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Why is Financial Inclusion important? What are its benefits? The World Bank Global Financial Inclusion (Global Findex) Database indicates that 2.5 billion adults globally— which comes to about half the total adult population in the world—has zero access to financial services offered by regulated financial institutions. While in high-income economies, 89 percent of the adult respondents reported that they have an account in a formal financial organisation; the number comes down to only 41 percent in developing economies. Due to a lack of proper access, the poor people are forced to rely on unscrupulous moneylenders for credit at very high rates of interest; they use various assets such as livestock or gold etc., as a form of savings, so that …show more content…

At the end of the day, it is the women who are at the receiving end of the brunt of financial noninclusion in growing economies. Just 37% of women have formal account in contrast to 46% of men. Indeed, there is a palpable gender gap of 6 to 9 percentage across income clusters inside growing economies. Permitting easy and broad admission to financial services, without any price or non-price barriers to their use & presented in an accountable manner, have been shown to benefit the poor people and other various disadvantaged groups. The easy availability of capital will allow the poor people to recognize small business opportunities, with increase in flow on welfare effects, i.e., affecting the economy of the country. Financial inclusion has several direct advantages and benefits to poor families who have taken loans or are using savings to see them through difficult situations like health issues or they even make investments in household durable goods, education etc. Insurance, another financial product can help the poor manage risks as well. Various studies and researches have showed that financial inclusion promotes women empowerment. Studies and researches also show that economies with deeper financial inclusion have a tendency to grow faster and reduce

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