How to achieve true financial inclusion
Is registration for mobile accounts (wallets) really enough? What is an ideal measure of nancial inclu- sion? We celebrate spectacular access levels to digital nancial services such as M Pesa, yet they’re becoming more expensive for every day – higher taxes notwithstanding. According to The Alliance for Financial Inclusion (AFI), the rst dimension to measure nancial inclusion is access to the nancial services and products that formal institutions offer. To achieve meaningful access, we have to solve the signi cant problems related to the cost of depositing and withdrawing electronic funds. Indeed, this begs the question – are we serving wine to customers who need blankets? A story is told about a great ood that was threatening to wipe out an entire island. There were many people on the island who were in danger. Some could swim, a few had small boats, but the majority were helpless. A ship that was passing by arrived to rescue the people. In desperation, a number of islanders started taking to the waters with makeshift equipment. The ship got there on time. A signi cant number were saved, albeit in bad shape. There were, however, a much bigger number of islanders yet to be saved, but people feared that the ship was already too overloaded. A great debate then began between the master of the ship and his handlers. Should they give some blankets and wine that the ship had in stock to the people on board who were cold and starving and then take them to safety? Or should they toss the merchandise overboard to reduce the weight, then save some more islanders in need? The ood in the story represents poverty and the ship represents basic access to products for nancial inclusion. The blankets and wine are value-added digital products and the drowning islanders would be the nancially excluded. A middle-ground solution to this dilemma could be to toss the wine and give blankets to those on board while trying to save more people. If we wish to help people out of poverty through basic access to nancial products, it would require us to ensure that this access can provide the products that deliver meaningful value and help low-income customers manage their lives better.