What is financial inclusion?
Financial inclusion is an effort to make everyday financial services available to more of the world's population at a reasonable cost. Advancements in fintech, such as digital transactions, are making financial inclusion easier to achieve. However, the World Bank estimates that some 1.7 billion adults worldwide still lack access to even a basic bank account.
Objectives of financial inclusion
The objectives of financial inclusion are to provide the following:
A basic no-frills banking account for making and receiving payments
Saving products (including investment and pension)
Simple credit products and overdrafts linked with no-frills accounts
The remittance, or money transfer facilities
Microinsurance (life) and non-macro insurance (life and non-life)
What are the main challenges of Financial Inclusion?
The main challenges of Financial Inclusion are mentioned below:
Bank services do not have enough support for scalability.
Technology adoption is limited.
The lack of the availability of documents for the purposes of banking activities.
Almost minimal financial literacy.
In the case of rural areas, telecom connectivity and infrastructure are poor.
Written by Ishmita Vaish