Over the past three weeks we have unpacked the subject of financial inclusion from definitions to components, drivers and lenses the matter. In this instalment we will make the case that financial inclusion is a key cog development and as such it requires the collective effort of all players in any economy. It requires commitment, time, passion, resources, and knowledge sharing. It cannot be an academic construct on an abstract concept, it is an important aspect in economic and social development.
Given the expansive nature of financial inclusion, there is a multiplicity of stakeholders involved. It is imperative that mention be given of some of the stakeholders involved and the ideal roles that they play. The World Bank Group identifies the following as the principal players in the drive towards financial inclusion.
Government- By far the most important player in driving financial inclusion, modernism, pro-market activism and activism. The government provides enabling environment for financial sector players to operate and provide services to the general citizenry. Some of the measures that governments may take include promulgation of relevant legislative frameworks that promote diversity and vibrancy of the financial sector. Governments can also play pro-market role in that they directly influence the structure and performance of the financial sectors through other means such as provision of affordable funding, tax incentives, information dissemination, and creation of specific charters and pronouncement of pro market policies.
Central Banks– they provide policy direction, regulation as well as incentives for various economic agencies to drive the inclusion agenda. Central banks are viewed as the leading stakeholder in the successful implementation of the financial inclusion given their vantage position and regulatory authority. As indicated in part 2 of this series the Bank of Botswana has done magnificent work and keeps providing guidance in this respect.
Banks– Together with other economic players such as insurance companies, capital markets and pension houses, are the implementing agencies of the financial inclusion agenda. Banks play a significant role in the provision of primary access through both digital platforms and physical infrastructure. They are also responsible and mandated by law to offer certain products and services such as deposit taking, credit and investment product and in some instances advisory services.
Technology and infrastructure developers– They provide the technology needed for the implementation of the financial inclusion. We allude to the significant roles that are being played by Mobile Network Operators, App developers, Aggregator as well as National Switches and card schemes in driving financial inclusion. Without these players, it will be difficult to reach some areas on our continent.
People– In the paper Financial Inclusion and Human Capital in Developing in Asia: The Australian Connection Rashmi Arora suggest that the people factor is often forget in most discussions of financial inclusion, yet it is at the centre of this subject. Without the people there is no financial inclusion to talk about. People’s interest to be opted into the financial service is critical as some exclusionary outcomes may be a result of the deliberate decision by people not to get involved. It become critical that co-creation is at the centre of any financial inclusion discourse.
Financial inclusion is at the centre of citizen participation in the economic affairs of their economies. As argued over the past series, one fundamental outcome of financial inclusion is the reduction of poverty, the improvement of people’s welfare. Eradication of poverty is, in any case one of the UN’s Sustainable Development Goals (SDG). There you have it, all individuals that are actively participating in promoting financial inclusion are in fact driving the realisation of the SDG 1. One of the targets of this SDG is the access to financial services. This is how critical financial inclusion is to sustainable development.
As different stakeholders find ways of driving financial inclusion, creative solutions and innovation are obvious outcomes. With innovations comes new opportunities for development. What we saw with the rapid growth of mobile money for example is a clear example of how the pursuit of new ways of doing things changed economies, created employment opportunities across most of the continent.
Active participation of most of the citizenry stimulates economic activity which leads to development. It is important that all of us, as a collective, put all hands-on deck as we promote and drive financial inclusion for the good and development of our communities, country, and continent.
*Mambure is the Head of Marketing and Corporate Relations at Absa Bank Botswana
