Financial inclusion is a cornerstone of modern economic development, and it goes beyond just providing access to financial services. The true challenge lies in ensuring consistent usage and the quality of these services, particularly for vulnerable groups such as women, rural communities, and micro-, small-, and medium-sized enterprises (MSMEs). According to the G20 Financial Inclusion Indicators, these three dimensions—access, usage, and quality—are critical metrics that shape the global effort to bridge financial gaps.
The concept of financial inclusion gained traction in the 1990s as it became clear that large segments of society lacked access to essential financial tools like banking, credit, and insurance. Since then, digital technologies have significantly lowered barriers, allowing more people to access formal financial services. However, millions of people across the world, particularly in the Asia-Pacific and Latin America regions, still face considerable obstacles. As noted by the World Bank and UN reports, limited digital literacy, high transaction costs, and infrastructure challenges hinder financial inclusion, especially for marginalised communities.
In response, 2023 marked a milestone with the launch of the Community of Practice (CoP) for Women’s Financial Inclusion, a collaboration between the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and policymakers from across Asia-Pacific and Latin America. The CoP was designed as a platform for policymakers to share knowledge, discuss challenges, and co-create solutions that foster greater financial inclusion in their respective regions, with a particular focus on bringing more women into the formal financial sector. This initiative highlights the growing emphasis on global cooperation as a critical factor for inclusive economic growth.
The role of the CoP for women’s financial inclusion
The CoP offered direct, practical support for countries aiming to implement successful financial inclusion policies targeting women. By facilitating collaboration between policymakers, government agencies, and financial institutions, the CoP fostered a unique exchange of knowledge and insights from across Latin America and Asia-Pacific to enhance capacity-building and policy innovation.
Here are some of the key initiatives driven by the CoP:
- Knowledge creation:
- Conducting policy-oriented research to evaluate the current financial inclusion environment in participating countries.
- Identifying best practices and weaknesses in financial inclusion efforts and recommending strategic policy improvements.
- Producing case studies that highlight successful policy interventions from various regions.
- Knowledge exchange:
- Organising webinars and policy dialogues with experts and stakeholders from around the world.
- Promoting the visibility of research and activities on ESCAP’s platforms, providing a rich repository of knowledge for policymakers.
- Facilitating study tours for government officials to observe successful financial inclusion programs in action.
- Training and technical assistance:
- Providing upskilling and targeted technical support to policymakers in areas like strategies to enhance public-private partnerships, effective policy approaches to address gender gaps, and sex-disaggregated data reporting.
- Offering advisory services to improve policy frameworks, with a special focus on creating roadmaps for successful women’s financial inclusion.
A comprehensive report produced by the Griffith Asia Institute and ESCAP explores the current financial inclusion landscape in Asia-Pacific and Latin America, focusing on women, rural communities, and MSMEs. It highlights the persistent barriers these groups face, such as limited digital literacy, cultural constraints, and high costs of accessing financial services.
The report also underscores the importance of sustainable financial systems in boosting economic resilience, especially in the face of global challenges like the COVID-19 pandemic and climate-related disasters. For example, the growing importance of climate insurance was identified as a key policy area, as more vulnerable populations require better access to products that can mitigate risks associated with natural disasters and economic shocks.
Key recommendations
To further drive financial inclusion efforts, the report offers the following four key recommendations:
- Targeted policy goals:
Governments should establish clear, specific, and time-bound financial inclusion targets. Data tracking, including gender and sectoral disaggregation, is crucial to ensure these goals are met and that no group is left behind. - Enhanced access to insurance:
As the climate crisis intensifies, policies that expand access to affordable insurance for vulnerable groups are essential. Governments and financial institutions must prioritise solutions for communities at high risk from natural disasters and economic shocks. - Tailored financial literacy programs:
One-size-fits-all approaches to financial literacy are ineffective. Programs must be designed to meet the unique needs of different groups, including MSMEs, rural populations, and women, while considering cultural, linguistic, and socio-economic differences. - South-South collaboration:
Knowledge sharing between countries in Asia-Pacific and Latin America is critical for creating scalable solutions. Governments should actively engage in South-South cooperation, leveraging successful initiatives to address common challenges across regions.
The path ahead
The need for financial inclusion is more pressing than ever, with the digital economy offering immense potential to uplift marginalised communities. By fostering cross-continental collaboration through platforms like the CoP and implementing targeted, data-driven policies, countries in Asia-Pacific and Latin America can make significant strides in achieving equitable financial systems. These efforts not only enhance the economic resilience of individuals and businesses but also contribute to broader, sustainable development goals.
The future of financial inclusion depends on bold, inclusive policies and a commitment to ensuring that no one is left behind. Through sustained efforts, vulnerable populations can gain the financial tools and resources they need to thrive in today’s interconnected global economy.
Shawn Hunter is an Industry Fellow at the Griffith Asia Institute and Hub Lead, Inclusive Growth and Rural Development Hub.
More information and to access the report may be found on the Community of Practice for Financial Inclusion project page.
