REPORT: The 2016 Brookings Financial and Digital Inclusion Project Report, August 2016
Financial inclusion intersects with a number of key Sustainable Development Goals (SDGs), adopted in September 2015 as part of the 2030 Agenda for Sustainable Development. These goals “call for action by all countries, poor, rich and middle-income to promote prosperity while protecting the planet.” Among the SDGs closely connected to financial inclusion are objectives to: end poverty; achieve gender equality; “promote inclusive and sustainable economic growth, employment, and decent work for all” (a goal that is particularly germane to financial inclusion); and reduce inequality within and among countries. The FDIP team will monitor efforts to reach the key targets associated with these SDGs as countries implement the 2030 Agenda.
Evaluating progress toward adoption of affordable formal financial services matters because financial inclusion is a key ingredient in promoting household well-being and broader economic development.1 The first annual FDIP report and scorecard, published in August 2015, addressed fundamental questions regarding ways to advance inclusive finance, including
1) Do country commitments make a difference in progress toward financial inclusion?
2) To what extent do mobile and other digital technologies advance financial inclusion? and
3) What legal, policy, and regulatory approaches promote financial inclusion?
To answer these questions, the 2015 FDIP Report examined the inclusion landscape across 21 economically, geographically, and politically diverse countries by examining country-specific legislation and news stories, reviewing multinational datasets, and corresponding with financial inclusion experts in the focus countries and beyond. This research and engagement process enabled the FDIP team to compile a picture of the global financial inclusion landscape, and yielded the following key takeaways:
• Country commitments to advancing financial inclusion matter.
• The movement toward digital financial services will accelerate financial inclusion.
• Geography generally matters less than policy, legal, and regulatory factors, although some regional trends in terms of financial services provision are evident.
• Central banks, ministries of finance, ministries of communications, banks, non-bank financial service providers, and mobile network operators have major roles in achieving greater financial inclusion and should coordinate closely with respect to policy, regulatory, and technological advances.
• Full financial inclusion cannot be achieved without addressing the financial inclusion gender gap and accounting for diverse cultural contexts with respect to financial services.
These recommendations regarding digital financial services and digital financial service mechanisms (e.g., merchant payments and smartphones, respectively) are reflected in the 2016 FDIP metrics. As we note below, this year’s study added several new metrics designed to assess progress toward financial inclusion. We also extended our analysis to several new countries in addition to the 21 studied last year. For details on the 2016 FDIP metrics, consult pages 110–119.
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