Financial inclusion means that individuals and businesses have access to useful

Question

Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs, delivered in a responsible and sustainable way.

Being able to have access to a transaction account is a first step towards broader financial inclusion since a transaction account allows people to store money, and send and receive payments.

A transaction account can also serve as a gateway to other financial services, which is why ensuring that people worldwide can have access to a transaction account is the focus of the World Bank Group's Universal Financial Access 2020 initiative.

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Explanation / Answer

By having access to transaction account people worldwide can have access to demand deposit, term deposits facility and can gain interest on it. It provides financial security to certain extent. It also helps in transfer of funds at a faster rate. Social security schemes, subsidies, etc. can be transferred to people having transaction account. Loans for small business can be available easily with customers having transaction account. In many developing and developed countries people can’t access basic bank facilities due to lack of an account in the bank. As per World Bank 2 billion people don’t have access to financial services due to cost involved which means that services are not affordable. Other reasons are lack of trust and higher distance of financial institutions. World Bank has launched a specific program to increase financial inclusion by 2020.
As per World Bank “India and China have the largest share of unbanked people and together they account for some 32% of them. The rest of the focus countries include: Bangladesh, Brazil, Colombia, Cote d'Ivoire, DRC, Egypt, Ethiopia, Indonesia, Kenya, Mexico, Morocco, Mozambique, Myanmar, Nigeria, Pakistan, Peru, Philippines, Rwanda, South Africa, Vietnam, Tanzania, Turkey, and Zambia.”

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