Financial inclusion is a goal or a measure of how inclusive a financial system is for individuals in need of financial services. The inverse (or antonym) of financial inclusion is financial exclusion.

Financial services are important to help individuals and households manage negative welfare shocks like a medical bill. Financial services help people prepare for shocks (saving and insurance) and manage the shocks when they occur (borrowing). This makes financial services an important factor in supporting financial well-being.

Account ownership is a key indicator of financial inclusion. Financial inclusion for a country or region can be measured as the percentage (or “rate”) of individuals or households that own a financial account.

The global average of financial inclusion, measured as percentage of adults with an account, is 69%. Among the regions of the world, Sub-Saharan Africa has the lowest rate of financial inclusion at 42%. (Demirguc-Kunt et al., 2018).

Mobile money (MoMo) has been a major factor in improving financial inclusion in developing countries. MoMo is a form of mobile-based account ownership. Users of mobile money benefit from safer and faster payments and savings. Mobile money has been especially successful in the country of Kenya in East Africa with the growth of M-Pesa.

References

Demirguc-Kunt, A., Klapper, L., Singer, D., Ansar, S., and J. Hess, 2018. The Global Findet Database 2017: Measuring Financial Inclusion and the Fintech Revolution. The World Bank.