Photograph taken in Uganda. Jon Spaull/ Banking on Change
Banking on Change launches report on breaking barriers to financial inclusion
22 Jan 2013, 15:30 GMT
Banking on Change has released a report which examines the barriers to financial inclusion in developing countries.
While the Banking on Change programme does not have all the answers, it is making major headway in this area. Having experienced the programme first-hand I can certainly attest to the incredible impact it has on the personal lives of so many.
Antony Jenkins, Group Chief Executive
The study, entitled ‘Breaking Barriers to Financial Inclusion’, also describes the potential boost to the global economy that large-scale financial inclusion represents.
Banking on Change is a partnership between Plan UK, CARE International UK and Barclays that encourages extremely poor people to begin their path to financial inclusion through savings-led microfinance, reaching 513,000 people across 11 countries in just three years.
After establishing a savings culture, most people go on to receive financial training and establish micro-enterprises before additional access to credit or more formal banking is considered. One of the key recommendations in the report is for any financial inclusion programme to be ultimately sustainable; it must offer formal links with the banking sector, which requires much greater co-operation from local and global financial institutions.
Group Chief Executive Antony Jenkins attended a launch event for the report held at the UK House of Lords and said: “That financial inclusion stimulates economies and improves lives is undeniable; the question is how sustainable, savings-led financial inclusion can be scaled up to make a real difference.
“While the Banking on Change programme does not have all the answers, it is making major headway in this area. Having experienced the programme first-hand I can certainly attest to the incredible impact it has on the personal lives of so many."
Other key recommendations in the report include:
- Members of the UN High-level Panel – including UK Prime Minister David Cameron – that are identifying a new international framework to replace the current Millennium Development Goals after 2015 should ensure financial inclusion is on the agenda
- National governments, donors and financial services providers should recognise and support the expansion of savings-led microfinance solutions as part of an overall strategy for tackling poverty
- Governments should invest in and extend access to financial education and entrepreneurship training, with a particular focus on women and young people
- Financial institutions and regulators should recognise community-based savings models and support the development of appropriate, transparent products.
Around 2.7 billion adults have no access to financial services, yet if they all participated in savings-led microfinance programmes like Banking on Change, up to US$157bn could be added to the global economy each year. Where these savings groups are then linked to the formal financial system, this could provide an influx in banking deposits, which could in turn be used to finance businesses and households.