Financial Inclusion: What Have We Learned So Far? What Do We Have to Learn?

IMF Working Papers, August 7, 2020

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Canonical URL: Financial Inclusion: What Have We Learned So Far? What Do We Have to Learn?

Interest in financial inclusion has increased over the past two decades.
The paper surveys the literature to document:
- trends over time; and
- gaps that have arisen across regions, income levels, and gender.
Structural and policy-related factors matter for inclusion:
- examples include encouraging banking competition and channeling government payments through bank accounts.
Financial inclusion can generate potential macroeconomic and microeconomic benefits.
Policy emphasis should be on identifying and reducing frictions holding back financial inclusion, rather than targeting specific levels of inclusion.

Prioritize removing frictions that inhibit inclusion (structural and policy-related), for example:
- promote banking competition; and
- channel government payments through bank accounts.
Avoid policies that focus solely on achieving specific numerical targets for inclusion levels; instead, focus on the underlying barriers.

The paper identifies areas for future research, building on documented trends and gaps across:
- regions;
- income levels; and
- gender.
Further work is needed to better quantify the macro and microeconomic benefits and to evaluate which policies most effectively reduce frictions.

IMF Working Paper by Adolfo Barajas, Thorsten Beck, and Mohammed Belhaj; August 7, 2020.