The global economy, and particularly developing nations, could receive a yearly savings boost of up to US$145 billion if the 2.5 billion adults worldwide who are ‘unbanked’ participate in savings-led microfinance programmes.
The figure is part of a new report that finds that closer cooperation between banks, NGOs and governments is essential for real progress in financial inclusion.
‘Banking on Change: Breaking the Barriers to Financial Inclusion’, released by Banking on Change partners Barclays, CARE International and Plan UK, examines the barriers to financial inclusion in developing countries and the potential boost to the global economy that large scale financial inclusion represents.
One of the report’s key recommendations is that for any financial inclusion programme to be ultimately sustainable, it must offer a formal financial linkage model with the banking sector, and that this requires much greater co-operation from local and global financial institutions.
Other recommendations include:
- Members of the UN High-level Panel, including David Cameron, 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 scale-up of savings-led microfinance solutions as part of an overall strategy for tackling poverty.
- Governments should invest in, and extend, access to financial education, with a particular focus on women and young people, whilst also increasing provision of training in business skills and entrepreneurship.
- Financial institutions and regulators should recognise community-based savings models and support the development of appropriate, transparent products that protect poor people’s money, whilst opening up access to outreach banking and mobile technologies that can facilitate group banking.
Banking on Change is a partnership with international banking group Barclays and NGOs Plan International and Care International on a £10 million, three-year programme that aims to improve the quality of life of half a million disadvantaged people by developing and extending access to basic banking services.
Download Banking on Change: Breaking the Barriers to Financial Inclusion
For further information on the Banking on Change partnership visit Barclays