FINANCIAL INCLUSION: INTRODUCTION AND OVERVIEW

Abstract

Financial inclusion has emerged as a critical strategy for promoting economic growth, reducing poverty, and ensuring equitable access to financial services for all segments of society, particularly low-income and marginalized populations. This study explores the concept of financial inclusion, its importance, and the challenges associated with achieving it, while contrasting it with financial exclusion, which disproportionately affects vulnerable groups such as the unemployed, elderly, and physically disabled. The research highlights the role of financial inclusion in fostering economic development by providing access to formal credit, savings, insurance, and payment systems, thereby reducing reliance on informal financial sources. The study underscores the global efforts led by organisations such as the World Bank, G20, and OECD/INFE to promote financial literacy and inclusion, particularly in developing countries where a significant portion of the population remains unbanked. It emphasises the need for tailored financial products and services, financial education, and the establishment of trust in formal financial systems to ensure active participation from underserved communities. The research also examines the barriers to financial inclusion, including high transaction costs, lack of awareness, and inadequate infrastructure, and proposes solutions such as digital financial services, mobile banking, and agent banking to bridge the gap. Furthermore, the study discusses the socio-economic benefits of financial inclusion, including poverty alleviation, increased savings, and the empowerment of women and marginalised groups. It also highlights the role of financial inclusion in achieving sustainable development goals by promoting equitable growth, reducing income disparities, and enhancing financial stability. The research concludes by emphasising the importance of evidence-based policymaking, the need for standardised financial inclusion indicators, and the role of governments, regulators, and financial institutions in creating an inclusive financial ecosystem that benefits all members of society.

 Keywords: Financial Inclusion, Economic Growth, Poverty Reduction, Financial Literacy, Digital Financial Services, Mobile Banking, Financial Exclusion, Sustainable Development Goals (SDGs), Access to Finance, Marginalized Populations, Financial Empowerment, Agent Banking, Financial Infrastructure, Financial Education, Inclusive Finance, Global Financial Systems, Socio-Economic Impact, Developing Economies, Financial Stability, Equitable Access.