{"id":259007,"date":"2023-09-06T21:37:21","date_gmt":"2023-09-06T16:07:21","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=259007"},"modified":"2023-09-06T21:37:21","modified_gmt":"2023-09-06T16:07:21","slug":"use-financial-inclusion-to-reduce-inequality-and-speed-up-growth","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/use-financial-inclusion-to-reduce-inequality-and-speed-up-growth\/","title":{"rendered":"Use financial inclusion to reduce inequality and speed up growth"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cUse financial inclusion to reduce inequality and speed up growth\u201d <\/strong>published in the \u201cLive Mint\u201d <\/strong>on 6th September 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3 – Indian Economy – Inclusive growth<\/p>\n

News<\/strong>– The article expalain the contribution of B20 grouping for promoting financial inclusion and challenges in prompting financial inclusion.<\/p>\n

What is the contribution of B20 for promoting financial inclusion?<\/strong><\/h2>\n

The topic of financial inclusion has been a consistent part of the B20 discussions f<\/strong>or an extended period. It all began at the Pittsburgh Summit in 2009 <\/strong>when the Financial Inclusion Experts Group (FIEG)<\/strong> was established.<\/p>\n

The Global Partnership for Financial Inclusion (GPFI)<\/strong> was formed at the Seoul Summit <\/strong>in 2011. It was followed by the introduction of a fundamental set of financial inclusion metrics<\/strong> at the Mexico Summit in 2012. <\/strong><\/p>\n

The China Summit in 2016<\/strong> led to the adoption of high-level principles for digital financial inclusion<\/strong>. At the Indonesia Summit in 2022<\/strong>, an implementation guide <\/strong>for this was provided.<\/p>\n

What are challenges in promoting financial inclusion?<\/strong><\/h2>\n

According to the 2021 Global Findex Database from the World Bank<\/strong>, approximately 24% of adults worldwide lack access to formal financial accounts. <\/strong><\/p>\n

Only 29% of adults<\/strong> choose to deposit their savings in a financial institution,<\/strong> and a mere 28%<\/strong> of adults borrow from a formal financial institution<\/strong> on a global scale.<\/p>\n

MSMEs are also facing growing disparities in obtaining financing. A publication by the World Bank titled “MSME Finance Gap: Assessment of the Shortfalls and Opportunities in Financing MSMEs in Emerging Markets” <\/strong>revealed it.<\/p>\n

As per the repost, 21% of micro-enterprises<\/strong> in developing countries face constraints due to loan application rejections or unfavorable loan terms<\/strong>. For small and medium-sized enterprises, this figure rises to 30%.<\/p>\n

Globally, women encounter various obstacles accessing basic banking services<\/strong>. It including restrictive social norms, limitations on mobility, lack of identification, and limited financial literacy<\/strong>. This gender disparity is evident in low-income and developing countries.<\/p>\n

For example, in Sub-Saharan Africa and the Middle East and North Africa, the gender ga<\/strong>p in bank account ownership<\/strong> is 12 and 14 percentage points. It is twice the average gender gap<\/strong> in emerging economies and three times the global average.<\/p>\n

In case of digital payments, <\/strong>men with accounts in developing countries are typically 6 percentage points<\/strong> more likely than women to use digital payment methods. <\/strong><\/p>\n

Women also face greater challenges in accessing emergency funds<\/strong>. According to the World Bank’s Findex data <\/strong>from 2021, only 50% of women in developing nations<\/strong> claimed they could consistently access emergency cash, compared to 59% of men.<\/strong><\/p>\n

What is the way forward for financial inclusion?<\/strong><\/h2>\n

There are three main pillars<\/strong> to reduce barriers to financial inclusion.<\/p>\n

The first pillar focuses on enhancing the ecosystem and facilitators <\/strong>that drive financial inclusion. Challenges such as a lack of innovation in financial services, low financial literacy, limited opportunities for capacity building, and gender-based exclusion<\/strong> can strain ongoing financial inclusion efforts.<\/p>\n

To address this, the promotion of private sector engagement<\/strong> in financial inclusion through partnerships is necessary.<\/p>\n

There is need for\u00a0 enhancement of individuals’ and small enterprises’ capacities<\/strong> through incubation and financial literacy programs<\/strong>, and the promotion of gender-inclusive financial services and initiatives.<\/strong><\/p>\n

The second pillar aims to expand the reach of financial products and services<\/strong>. Global insurance penetration <\/strong>remains low at 7% of GDP.<\/p>\n

There is also a need to accelerate financial inclusion for agricultural, rural, and migrant populations<\/strong>.<\/p>\n

This pillar concentrates on reducing the cost of capital<\/strong> for financial institutions, devising innovative distribution channels<\/strong> for service delivery, and promoting cross-border payments <\/strong>through protocol standardization.<\/strong><\/p>\n

The final pillar strengthens the consumer protection framework<\/strong> to uphold consumer trust<\/strong> in new digital products. It sseks to formulate policies that strike a balance between protection and innovation.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cUse financial inclusion to reduce inequality and speed up growth\u201d published in the \u201cLive Mint\u201d on 6th September 2023. Syllabus: GS3 – Indian Economy – Inclusive growth News– The article expalain the contribution of B20 grouping for promoting financial inclusion and challenges in prompting financial inclusion. What… Continue reading Use financial inclusion to reduce inequality and speed up growth<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,8184,10501],"class_list":["post-259007","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/259007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=259007"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/259007\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=259007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=259007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=259007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}