Concept Of Financial Inclusion
Concept Of Financial Inclusion
Financial inclusion, in simple terms, means giving access to financial services to all in the sphere of banking, insurance. And credit products. It aims at providing all individuals and businesses the facility of making financial transactions with ease through proper banking and related channels.
The foremost step that falls within financial inclusion is getting all people to open bank accounts. For the same, all countries have been individually and jointly, trying to educate people across all communities; about the benefits of financial services. As a result of the rigorous efforts put in by countries, it shows an estimate of 70% of the people across the globe now own a bank account. The balance of 30% of people stays unbanked and mostly reside in underdeveloped or developing countries.
While some developing countries still struggle to implement the first step of opening a bank account, developed countries like China, where almost every citizen owns his/ her bank account, the goal is to facilitate the use of internet-based banking services, internet banking, mobile banking, etc.
Needless to mention that technology has played an important role in encouraging as well as facilitating financial inclusion. Before the advent of technology, financial transactions took place mostly in physical modes or, at the most, through cheques. But now, mind-boggling innovations like internet banking, e-wallets, UPI, etc. have paved the way for a much convenient and faster method of undertaking financial transactions. Such innovations give unbanked people all the more reason to adopt financial inclusion and avail the financial services available.
It is also interesting to note that financial inclusion will help individuals make easier financial transactions and add to the development of economies. With more people connecting through banking channels, financial transactions within nations will undertake within no time leading to faster economic development. That is exactly why many countries have always considered financial inclusion a major development goal while formulating its national plans and policies.
However, due to various reasons, the achievement of financial inclusion is still a long way to go. The primary reason for the same is the lack of financial awareness in people. There is a huge disparity between the financial knowledge possessed by people living across different communities and economies. While the modern communities and developed economies have had the privilege of gaining knowledge on advanced financial subjects, including investing, oppressed communities and developing economies still struggle with managing basic finances. Bridging this gap is a difficult task.
Another hurdle in achieving complete financial inclusion is the gender inequality that is prevalent all across the globe. Surveys prove that women have still not been able to match the numbers in which men can access financial services. Most of such women live in rural areas who do not even carry an identity proof.
To sum up, though countries have been consistently trying to achieve financial inclusion through public policies, it has to take steps to effectively address the disparities between communities, countries, and social groups.