Whether running a home, company or a country, a healthy financial life is key as it plays a big part in growth and development. But challenges do come and shake the economy at one point or the other. Financial inclusion is one of the ways to bring prosperity in the current world. Which economy wouldn’t love to include some fine things that would bring growth, sustainability and progress? Here are some of the financial inclusion pillars every economy should think about
Financial knowledge and access
The fundamental way to develop an economy is first to educate people about the finances and then give them access to the financial opportunities and institutions. With a more people becoming financially literate, it will be easy for them to use the available financial avenues in their country.
This would result in greater returns as people exercise their financial knowledge to their benefit, which would benefit the country too. A country should consider educating their youth more so that they can make sustainable financial decisions which will affect the future of the country. This too will pass the knowledge better.
The world has moved into the use of smartphones. The evolution of the smartphones has made the banking systems reach more people than they used to. Phones have made transactions easier. They have also made access to cash in remote regions easier.
Some companies have created opportunities to transfer cash in great worldwide networks. Having this in an economy creates a great impact on the financial standing of a country. With more money finding an easier medium for transfer, more revenues are generated in turn.
This has an incredible effect on financial inclusion. Monetary financial institutions, MFI, are preferable to the old bank loan systems. The reason behind is that they issue more affordable financing. Whether it’s an individual business, a small or medium-sized enterprise, they can all benefit from the loans from an MFI.
Though some challenges are seen with the MFI, such as high transaction rates while some collect back their cash in a harsh manner, if done well they are a sure way to drive an economy forward. The advantage is that they significantly ease the financial needs of small entrepreneurs.
Financial literacy is a challenge to many individuals, especially in the developing world. This creates the need for the government to protect its individuals from the corrupt in the society. These are people whose aim, is to bring down development through violation of privacy and fraud. The right infrastructure and systems should be put in place to curb such violations. This will help the individual develop confidence and continually use financial services. It will grow the economy significantly.
Financial inclusion is a sure way to reach the challenged in any economy. Any country which decides to bring on board the challenged to utilize the available financial vehicles has made a step in the right direction. These are the people who will set solid the economy in the future and improve the country’s GDP. Why not include them?