research topics in financial inclusion

Topics for CGAP's Work

Maximizing the potential of financial inclusion.

The world has recently faced many unprecedented shocks and stresses that have exacerbated existing development challenges—all of which have disproportionate impacts on the most vulnerable, especially women and girls. Against the backdrop of such a challenging global context, financial inclusion is an essential foundation for building a more inclusive, resilient, and green world. The advancement of digital economies and digital inclusion, as well as the increase of socially minded investments, provide hope, while innovations in digital financial services are helping redefine what inclusive financial ecosystems look like, and how they can be used as an enabler of many UN Sustainable Development Goals (SDGs) and broader development outcomes. CGAP works on many aspects of financial inclusion and on its intersection with many development challenges. Below you’ll find more information about the topics we have been working on.

Women's Financial Inclusion

The Role of Financial Services in Rural Women’s Climate Resilience

Micro and Small Enterprises

MSE Financing

Microfinance Digitization

Building resilience.

Climate Change

Asset Finance for Global Development

Climate Resilience

Digital innovation.

Cash-In / Cash-Out for Rural Agent Networks

Fintech and the Future of Banking

Gig Platforms and Financial Inclusion

OPEN APIs FOR DIGITAL FINANCE

Digitizing Merchant Payments

Beyond Switches, What Makes Interoperability Work?

Data-driven Financial Services

Enabling and responsible financial policy.

Regulation for Inclusive Digital Finance

An Ecosystem Approach to Consumer Protection: What, Why and How?

Proportional Supervision for Digital Financial Services

Market monitoring for financial consumer protection

© 2024 CGAP

• Privacy Notice

Reaching Financial Inclusion: Necessary and Sufficient Conditions

• Original Research
• Published: 06 January 2022
• Volume 162 , pages 599–617, ( 2022 )

Cite this article

• Helena Susana Amaral Geraldes   ORCID: orcid.org/0000-0002-6581-3454 1 ,
• Ana Paula Matias Gama   ORCID: orcid.org/0000-0002-8064-6244 1 &
• Mário Augusto   ORCID: orcid.org/0000-0001-7345-1679 2  

1032 Accesses

9 Citations

Explore all metrics

Financial inclusion is a vital development policy concern; different combinations and conditions of access to (supply) and use of (demand) financial services may predict levels of financial inclusion. With a fuzzy set qualitative comparative analysis, conducted across 61 countries worldwide, the current research establishes that financial literacy and human development are conditions of high financial inclusion; supply-side drivers, such as bank concentration and bank branches, represent substitutive conditions for attaining high levels of financial inclusion. With separate analyses of a split sample, designating developed and developing countries, the authors also determine that the absence of financial literacy and human development, as demand-side drivers, leads to diminished financial inclusion for both sets of countries. In turn, this research offers novel ideas for achieving more efficient policies to prompt financial inclusion.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

Financial literacy, financial advice, and financial behavior.

Oscar A. Stolper & Andreas Walter

The effects of IMF loan conditions on poverty in the developing world

Glen Biglaiser & Ronald J. McGauvran

Sustainability, FinTech and Financial Inclusion

Douglas W. Arner, Ross P. Buckley, … Robin Veidt

Availability of Data and Material

Public data.

Code Availability

Public web sites.

Even in developed countries, Klapper et al. ( 2013 ) highlight that the lack of FL leaves people more vulnerable to macroeconomics shocks (e.g., international financial crisis of 2008).

Worldwide, 56% of adults do not use formal financial services, but this number diverges across high and low income countries. High income countries include 17% unbanked adults, but this number rises to 64% in low income countries (Ardic et al., 2011 ).

World Bank Data Catalog, Databank, available at https://databank.worldbank.org/source/world-development-indicators (accessed April 2021).

Financial Access Survey (2014), International Monetary Fund, available at https://data.imf.org/?sk=388dfa60-1d26-4ade-b505-a05a558d9a42 (accessed April 2021).

S&P Global FinLit Survey (2014), available at https://gflec.org/initiatives/sp-global-finlit-survey/ (accessed April 2021).

Human Development Data Center, UNDP, available at http://hdr.undp.org/en/data (accessed April 2021).

More traditional correlation-based analytical procedures (e.g., multiple regressions or structural equation modelling) assume causal relationships between the explanatory variables and the outcome. However, when the effects of the variables are asymmetrical, and the form of interactions among them is unknown, regression analysis may be inappropriate. Under these circumstances, fsQCA may return useful information by identifying the combinations of conditions that lead to a given outcome (Vis, 2012 ), and furthermore distinguishing between the necessary and the sufficient conditions (Schneider & Eggert, 2014 ).

Ababio, J. O. M., Attah-Botchwey, E., Osei-Assibey, E., & Barnor, C. (2020). Financial inclusion and human development in frontier countries. International Journal of Finance & Economics, 26 (1), 42–59. https://doi.org/10.1002/ijfe.1775

Article   Google Scholar  

Adetunji, O. M., & David-West, O. (2019). The relative impact of income and financial literacy on financial inclusion in Nigeria. Journal of International Development, 31 (4), 312–335. https://doi.org/10.1002/jid.3407

Allen, F., Demirgüç-Kunt, A., Klapper, L., & Peria, M. S. M. (2016). The foundations of financial inclusion: Understanding ownership and use of formal accounts. Journal of Financial Intermediation, 27 , 1–30. https://doi.org/10.1016/j.jfi.2015.12.003

Ardic, O. P., Heimann, M., & Mylenko, N. (2011). Access to financial services and the financial inclusion agenda around the world: A cross-country analysis with a new data set. Policy Research Working Paper Series 5537, The World Bank. Available at http://documents.worldbank.org/curated/en/519351468137108112/Access-to-financial-services-and-the-financial-inclusion-agenda-around-the-world-a-cross-country-analysis-with-a-new-data-set . Retrieved April 2021

Beck, T., Demirgüç-Kunt, A., & Honohan, P. (2009). Access to financial services: Measurement, impact, and policies. The World Bank Research Observer, 24 (1), 119–145.

Beck, T., Demirgüç-Kunt, A., & Martinez Peria, M. S. M. (2008). Banking services for everyone? Barriers to bank access and use around the world. The World Bank Economic Review, 22 (3), 397–430. https://doi.org/10.1093/wber/lhn020

Beck, T., Demirgüç-Kunt, A., & Peria, M. S. M. (2007). Reaching out: Access to and use of banking services across countries. Journal of Financial Economics, 85 (1), 234–266. https://doi.org/10.1016/j.jfineco.2006.07.002

Bongomin, G. O. C., Munene, J. C., Ntayi, J. M., & Malinga, C. A. (2017). Financial literacy in emerging economies: Do all components matter for financial inclusion of poor households in rural Uganda? Managerial Finance, 43 (12), 1310–1331. https://doi.org/10.1108/MF-04-2017-0117

Bongomin, G. O. C., Munene, J. C., Ntayi, J. M., & Malinga, C. A. (2018). Nexus between financial literacy and financial inclusion: Examining the moderating role of cognition from a developing country perspective. International Journal of Bank Marketing, 36 (7), 1190–1212. https://doi.org/10.1108/IJBM-08-2017-0175

Bongomin, G. O. C., Ntayi, J. M., Munene, J. C., & Nabeta, I. N. (2016). Social capital: Mediator of financial literacy and financial inclusion in rural Uganda. Review of International Business and Strategy, 26 (2), 291–312. https://doi.org/10.1108/RIBS-06-2014-0072

Boyd, J. H., & Prescott, E. C. (1986). Financial intermediary-coalitions. Journal of Economic Theory, 38 , 211–232. https://doi.org/10.1016/0022-0531(86)90115-8

Burgess, R., & Pande, R. (2005). Do rural banks matter? Evidence from the Indian social banking experiment. American Economic Review, 95 (3), 780–795. https://doi.org/10.1257/0002828054201242

Chakravarty, S. R., & Pal, R. (2013). Financial inclusion in India: An axiomatic approach. Journal of Policy Modelling, 35 (5), 813–837. https://doi.org/10.1016/j.jpolmod.2012.12.007

Chliova, M., Brinckmann, J., & Rosenbusch, N. (2015). Is microcredit a blessing for the poor? A meta-analysis examining development outcomes and contextual considerations. Journal of Business Venturing, 30 (3), 467–487. https://doi.org/10.1016/j.jbusvent.2014.10.003

Cucinelli, D., Trivellato, P., & Zenga, M. (2019). Financial literacy: The role of the local context. Journal of Consumer Affairs . https://doi.org/10.1111/joca.12270

Datta, S. K., & Singh, K. (2019). Variation and determinants of financial inclusion and their association with human development: A cross-country analysis. IIMB Management Review, 31 , 336–349. https://doi.org/10.1016/j.iimb.2019.07.013

Demir, A., Pesqué-Cela, V., Altunbas, Y., & Murinde, V. (2020). Fintech, financial inclusion and income inequality: A quantile regression approach. European Journal of Finance . https://doi.org/10.1080/1351847X.2020.1772335

Demirgüç-Kunt, A., Klapper, L. F., Singer, D., & Van Oudheusden, P. (2015). The global Findex database 2014: Measuring financial inclusion around the world. 7255. Policy Research Working Paper.

Demirgüç-Kunt, A., Klapper, A., Singer, D., Ansar, S., & Hess, J. (2017). The Global Findex Database 2017. Measuring financial inclusion and the fintech revolution . World Bank.

Google Scholar  

Demirgüç-Kunt, A., & Klapper, L. (2013). Measuring financial inclusion: Explaining variation in use of financial services across and within countries. Brookings Papers on Economic Activity, 44 (1), 279–340. https://doi.org/10.1353/eca.2013.0002

Dev, S. M. (2006). Financial inclusion: Issues and challenges. Economic and Political Weekly . https://doi.org/10.2307/4418799

Di Giannatale, S., & Roa, M. J. (2019). Barriers to formal saving: Micro- and macroeconomic effects. Journal of Economic Surveys, 33 (2), 541–566. https://doi.org/10.1111/joes.12275

Emara, N., & Kasa, H. (2020). The non-linear relationship between financial access and domestic savings: The case of emerging markets. Applied Economics, 53 (3), 345–363. https://doi.org/10.1080/00036846.2020.1808174

Esquivias, M. A., Sethi, N., Ramandha, M. D., & Jayanti, A. D. (2020). Financial inclusion dynamics in Southeast Asia: An empirical investigation on three countries. Business Strategy and Development . https://doi.org/10.1002/bsd2.139

Fiss, P. C. (2011). Building better causal theories: A fuzzy set approach to typologies in organization research. Academy of Management Journal, 54 (2), 393–420. https://doi.org/10.5465/amj.2011.60263120

Fouejieu, A., Sahay, R., Cihak, M., & Chen, S. (2020). Financial inclusion and inequality: A cross-country analysis. Journal of International Trade & Economic Development, 29 (8), 1018–1048. https://doi.org/10.1080/09638199.2020.1785532

Fu, J. (2020). Ability or opportunity to act: What shapes financial well-being? World Development, 128 , 1–20. https://doi.org/10.1016/j.worlddev.2019.104843

Goyal, K., & Kumar, S. (2020). Financial literacy: A systematic review and bibliometric analysis. International Journal of Consumer Studies, 45 , 80–105. https://doi.org/10.1111/ijcs.12605

Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross-country evidence. World Development, 111 , 84–96. https://doi.org/10.1016/j.worlddev.2018.06.020

Hauswald, R., & Marquez, R. (2006). Competition and strategic information acquisition in credit markets. Review of Financial Studies, 19 (3), 967–1000. https://doi.org/10.1093/rfs/hhj021

Kabakova, O., & Plaksenkov, E. (2018). Analysis of factors affecting financial inclusion: Ecosystem view. Journal of Business Research, 89 , 198–205. https://doi.org/10.1016/j.jbusres.2018.01.066

Kaiser, T., & Menkhoff, L. (2017). Does financial education impact financial literacy and financial behavior, and if so, when? World Bank Economic Review, 31 , 611–630. https://doi.org/10.1093/wber/lhx018

Karakurum-Ozdemir, K., Kokkizil, M., & Uysal, G. (2019). Financial literacy in developing countries. Social Indicators Research, 143 , 325–353. https://doi.org/10.1007/s11205-018-1952-x

Kim, J. H. (2016). Study on the effect of financial inclusion on the relationship between income inequality and economic growth. Emerging Markets Finance and Trade, 52 (2), 498–512. https://doi.org/10.1080/1540496X.2016.1110467

Kimmitt, J., & Muñoz, P. (2017). Entrepreneurship and financial inclusion through the lens of instrumental freedoms. International Small Business Journal: Researching Entrepreneurship, 35 (7), 803–828. https://doi.org/10.1177/0266242617700699

Klapper, L., El-Zoghbi, M., & J. Hess. (2016). Achieving the Sustainable Development Goals: The role of financial inclusion. CGAP. Retrieved April 2021, from https://www.cgap.org/sites/default/files/Working-Paper-Achieving-Sustainable-Development-Goals-Apr-2016_0.pdf

Klapper, L., Lusardi, A., & Oudheusden, P. (2014). Financial literacy around the world: Insights from the Standard & Poor’s ratings services global financial literacy survey. Retrieved April 2021, from https://responsiblefinanceforum.org/wp-content/uploads/2015/12/2015-Finlit_paper_17_F3_SINGLES.pdf

Klapper, L., Lusardi, A., & Panos, G. A. (2013). Financial literacy and its consequences: Evidence from Russia during the financial crisis. Journal of Banking & Finance, 37 , 3904–3923. https://doi.org/10.1016/j.jbankfin.2013.07.014

Le, Q. H., Ho, H. L., & Mai, N. C. (2019). The impact of financial inclusion on income inequality in transition economies. Management Science Letters, 9 , 661–672. https://doi.org/10.5267/j.msl.2019.2.005

Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35 (2), 688–726.

Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52 (1), 5–44. https://doi.org/10.1257/jel.52.1.5

Mengistu, A., & Perez-Saiz, H. (2018). Financial inclusion and bank competition in sub-Saharan Africa. IMF Working Papers 18/256. Retrieved April, 2021, from https://www.imf.org/en/Publications/WP/Issues/2018/12/07/Financial-Inclusion-and-Bank-Competition-in-Sub-Saharan-Africa-46388

Nizam, R., Karim, Z. A., Rahman, A. A., & Sarmidi, T. (2020). Financial inclusiveness and economic growth: New evidence using a threshold regression analysis. Economic Research-Ekonomska Istraživanja, 33 (1), 1465–1484. https://doi.org/10.1080/1331677X.2020.1748508

Nuzzo, G., & Piermattei, S. (2020). Discussing Measures of financial inclusion for the main Euro area countries. Social Indicators Research, 148 , 765–786. https://doi.org/10.1007/s11205-019-02223-8

OECD. (2014). PISA 2012 technical background. In OECD (Ed.), PISA 2012 Results: Students and money—Financial literacy skills for the 21st century (Vol. VI, pp. 123–145). OECD Publishing.

Chapter   Google Scholar  

OECD. (2020a). OECD/INFE 2020 International Survey of Adult Financial Literacy. Retrieved April, 2021, from www.oecd.org/financial/education/launchoftheoecdinfeglobalfinancialliteracysurveyreport.htm

OECD. (2020b). PISA 2018 results (volume IV): Are students smart about money? PISA, OECD Publishing. https://doi.org/10.1787/48ebd1ba-en

Book   Google Scholar  

Omar, M. A., & Inaba, K. (2020). Does financial inclusion reduce poverty and income inequality in developing countries? A panel data analysis. Journal of Economic Structures, 9 (37), 1–25. https://doi.org/10.1186/s40008-020-00214-4

Owen, A. L., & Pereira, J. M. (2018). Bank concentration, competition, and financial inclusion. Review of Development Finance, 8 , 1–17. https://doi.org/10.1016/j.rdf.2018.05.001

Ozili, P. K. (2020). Financial inclusion research around the world: A review. Forum for Social Economics . https://doi.org/10.2139/ssrn.3515515

Peet, R., & Hartwick, E. (2009). Theories of development, contentions, arguments, alternative . Guilford Press.

Philippas, N. D., & Avdoulas, C. (2019). Financial literacy and financial well-being among generation-Z university students: Evidence from Greece. European Journal of Finance, 26 (4–5), 360–381. https://doi.org/10.1080/1351847X.2019.1701512

Ragin, C. (2000). Fuzzy set social science . University of Chicago Press.

Ragin, C. (2006). Set relations in social research: Evaluating their consistency and coverage. Political Analysis, 14 (3), 291–310. https://doi.org/10.1093/pan/mpj019

Ragin, C. (2008). Qualitative comparative analysis using fuzzy sets (fsQCA). In C. C. Ragin & B. Rihoux (Eds.), Configurational comparative methods: Qualitative comparative analysis (QCA) and related techniques (pp. 87–122). Sage.

Rihoux, B., & Ragin, C. (2008). Configurational comparative analysis . Sage.

Sarma, M. (2008). Index of financial inclusion. ICRIER working paper 215.

Schneider, C. Q., & Wageman, C. (2010). Standards of good practice in qualitative comparative analysis (QCA) and fuzzy-sets. Comparative Sociology, 9 (3), 397–418. https://doi.org/10.1163/156913210X12493538729793

Schneider, M. R., & Eggert, A. (2014). Embracing complex causality with the QCA method: An invitation. Journal of Business Marketing Management, 7 (1), 312–328.

Schneider, M. R., Schulze-Bentrop, C., & Paunescu, M. (2010). Mapping the institutional capital of high-tech firms: A fuzzy-set analysis of capitalist variety and export performance. Journal of International Business Studies, 41 (2), 246–266. https://doi.org/10.1057/jibs.2009.36

Sethi, D., & Acharya, D. (2018). Financial inclusion and economic growth linkage: Some cross-country evidence. Journal of Financial Economic Policy, 10 (3), 369–385. https://doi.org/10.1108/JFEP-11-2016-0073

United Nations. (2019). Human development report 2019. Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century. New York. Retrieved April, 2021, from http://hdr.undp.org/en/content/human-development-report-2019

Vis, B. (2012). The comparative advantages of fsQCA and regression analysis for moderately large-N analyses. Sociological Methods & Research, 41 , 168–198.

Zins, A., & Weill, L. (2016). The determinants of financial inclusion in Africa. Review of Development Finance, 6 , 46–57. https://doi.org/10.1016/j.rdf.2016.05.001

Download references

Acknowledgements

This work was funded by FCT, Fundação para a Ciência e a Tecnologia, I.P., Projects: PTDC/EGE-OGE/31246/2017, UIDB/04630/2020; UIDB/05037/2020.

The authors acknowledge financial, research and administrative support from the FCT (UBI&NECE: UIDB/04630/2020; PTDC/EGE-OGE/31246/2017).

Author information

Authors and affiliations.

University of Beira Interior, Research Center in Business Science (NECE), Covilhã, Portugal

Helena Susana Amaral Geraldes & Ana Paula Matias Gama

University of Coimbra, CeBER, Faculty of Economics, Coimbra, Portugal

Mário Augusto

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Helena Susana Amaral Geraldes .

Ethics declarations

Conflict of interest.

Not applicable.

Additional information

Publisher's note.

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Geraldes, H.S.A., Gama, A.P.M. & Augusto, M. Reaching Financial Inclusion: Necessary and Sufficient Conditions. Soc Indic Res 162 , 599–617 (2022). https://doi.org/10.1007/s11205-021-02850-0

Download citation

Accepted : 16 November 2021

Published : 06 January 2022

Issue Date : July 2022

DOI : https://doi.org/10.1007/s11205-021-02850-0

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Financial inclusion
• Financial literacy
• Human development
• Financial infrastructure
• Find a journal
• Publish with us
• Track your research

Resource Library

Featured content, privacy by design for inclusive finance: moving from liminal space to concrete practice.

30 Jan 2024

Prioritizing Women to Receive Cash Transfers: What Are the Implications for Program Design?

10 Oct 2023

Gender Bias in AI: An Experiment with ChatGPT in Financial Inclusion

25 Aug 2023

Positive Friction for Responsible Digital Lending: A Call to Action

This report explores how strategically adding friction to digital financial services can benefit both lenders and borrowers.

21 Feb 2024

All Resources

• Announcement
• Toolkits and Guides
• Access Usage Gap
• Agent Banking
• Agricultural and Rural Finance
• Alternative Data
• Challenges and Crises
• Consumer Protection
• Customer Centricity
• Data Privacy
• Data Transparency
• Digital Financial Services
• Digital Payments
• Digital Transformation
• Enabling Environment
• Equity Investing
• Financial Capability
• Financial Health
• Financial Inclusion Strategy
• Human Centered Design
• Impact Investing
• Inclusive insurance
• Microfinance
• Microfinance Institutions
• Mobile Banking
• Partnerships
• Personal Financial Management
• Policy, Regulation and Government Initiatives
• Refugees and Migrants
• Remittances
• Responsible Data Practices
• Responsible Digital Finance
• Responsible Product Design and Delivery
• Risk Management
• Rural Populations
• Small Business Owners
• Smallholder Farmers
• Supply Chain Finance
• Tech-Touch Balance
• Underserved Groups
• Underwriting
• Advisory Council Spotlight
• COVID-19 and MSMEs: Data and Analysis to Understand Impact
• Digital Cash Transfers for Women
• Financial Inclusion Equity Council
• Global Findex
• Global Microscope
• Inclusive Finance for Women
• Lehigh University Global Workshops
• Weathering the Storm II

Cybersecurity: A Crucial Ingredient for Responsible Finance and Consumer Protection

11 Jan 2024

Year in Review, Future in Focus: The Evolving Tale of Inclusive Finance

19 Dec 2023

Privacy as Product: Privacy by Design for Inclusive Finance

27 Nov 2023

Cash Transfers Directed to Women and the Implications for Intimate Partner Violence: Lessons for Program Design

September 28, 2023

Sending Cash Transfers to Women: How to Design Programs that Enhance Well- Being While Safeguarding Against Intimate Partner Violence

25 Sep 2023

‘Responsible Finance’ is Not Responsible if it’s Not Gender-Intentional

14 Sep 2023

Sign up for updates

Articles on financial inclusion

Displaying 1 - 20 of 31 articles.

Fintech is sold as the answer to Africa’s problems, but digital money services have downsides which media often overlook

Cathleen LeGrand , University of Leeds ; Chris Paterson , University of Leeds , and Jörg Wiegratz , University of Leeds

Mobile money in Ghana isn’t all good news: customers are paying a hefty price

Isaac Abotebuno Akolgo , Bayreuth International Graduate School of African Studies

South African women: violence, health and money issues among 5 biggest obstacles that stand in their way

Thabo Leshilo , The Conversation and Moina Spooner , The Conversation

Loan sharks: new data reveals they are often work colleagues or ‘friends’

Adele Atkinson , University of Birmingham

How a digital pound could work alongside cryptocurrencies

Ganesh Viswanath-Natraj , Warwick Business School, University of Warwick

Small loans: microcredit means more people can borrow money – but more scrutiny is also needed

Lungile Ntsalaze , University of Johannesburg

Digital banking is the in-thing – but it excludes many users in Tanzania and Senegal

Laura Caron , Columbia University

Uganda takes another step on e-payments path: five things you should know

Mercy Muendo , Daystar University

Uganda needs a mind shift to address poor growth and persistent inequality

John Ddumba-Ssentamu , Makerere University

What makes FinTech solutions succeed? We built a model based on Ghana’s experience

PK Senyo , University of Southampton and Stan Karanasios , The University of Queensland

South Africa needs to up its game when it comes to financial inclusion for women

Tinuade Adekunbi Ojo , University of Johannesburg

Ethiopia’s blockchain deal is a watershed moment – for the technology, and for Africa

Iwa Salami , University of East London

Nigeria is making progress with financial inclusion: here’s how

Emmanuel Mogaji , University of Greenwich

Ghana’s new mobile money rule could derail financial inclusion. But there are answers

PK Senyo , University of Southampton

Financial inclusion: how Nigerian small-scale farmers are locked out, and some answers

Olayinka Adegbite , University of Pretoria ; Charles Lepepeule Machethe , University of Pretoria , and C. Leigh Anderson , University of Washington

Zimbabwe’s restrictions on mobile money transfers are a blow to financial inclusion

Marcia Kwaramba , University of Colorado Boulder

South African banks need to do more to ensure financial inclusion

Velenkosini Matsebula , University of the Western Cape and Derek Yu , University of the Western Cape

Nigeria needs to close the financial inclusion gap for women smallholder farmers

Olayinka Adegbite , University of Pretoria ; Charles Lepepeule Machethe , University of Pretoria , and Elizabeth Mkandawire , University of Pretoria

Mobile-based lending is huge in Kenya: but there’s a downside too

Victor Odundo Owuor, University of Colorado Boulder

High street pawnbrokers: risky, expensive, but a lifeline for so many

Joanne Atkinson , University of Portsmouth

Related Topics

• Financial services
• Mobile money
• Peacebuilding
• South Africa

Top contributors

Senior Research Associate, One Earth Future Foundation

Professor of Anthropology, London School of Economics and Political Science

PhD candidate, University of Pretoria

Post-Doctoral Research Fellow, University of Johannesburg

Professor of Agricultural Economics, University of Pretoria

Associate Professor in FinTech & Information Systems, University of Southampton

Professor, Economics, University of the Western Cape

Director: Institute for Poverty, Land and Agrarian Studies, University of the Western Cape

Education and Development Coordinator, Centre for Rural Regional Law and Justice, Deakin University

Network and Research Manager: ARUA – UKRI GCRF FSNet Africa, University of Pretoria

Lecturer, Information Technology and the Law, Daystar University

Researcher, Lund University

Senior Researcher: Institute of Poverty Land and Agrarian Studies, University of the Western Cape

Associate Professor in Economic Geography, University of Nottingham

Principal Lecturer, Law, University of Portsmouth

• X (Twitter)
• Unfollow topic Follow topic

Enable JavaScript in your browser to view this website correctly.

Close panel

• Publications
• Reading lists
• Financial Inclusion

Financial Inclusion latest publications

Filter all of our publications to find the ones you are most interested in by content language, date, geography and/or topic.

More recent Most read

Sort our publications chronologically from newest to oldest, regardless of geography and/or topic matter.

Sort publications according to the number of time reads by our users, regardless of geography and/or topic matter.

April 1, 2024

Mexico | Advances and challenges around the use of cash

This press article contains some indicators from the point of view of consumers, and public and private companies related to the reduction in the use of cash in Mexico after the pandemic and mentions some of its challenges.

• Geography Tags
• Digital Trends
• Sustainable Development
• Types of files Downloads:

Share Other tools

• X (Twitter)

Select the documents of the publication you want to download.

March 19, 2024

Mexico | Considerations to invest in financial products

This press article provides advice on some general considerations that must be taken into account when investing in financial assets.

March 15, 2024

Colombia | Women: greater balance in the allocation of…

Care work has a significant impact on women's approach to work. Promoting between family members a balance in the time spent on care and unpaid work would make it possible to increase women's labor participation, their income and their individ…

• Latin America

March 6, 2024

Peru | Gender Gap 2023

The latest gender gap figures for Peru show some deteriorating indicators for women in the country. The greater burden of household chores and the abandonment of the labor market after their first child, condition their situation in the labor m…

January 19, 2024

Colombia | This is the year to redefine our electronic…

Transferring money or making a payment should be as easy as moving money from one pocket to another, without the hassles and risks of cash. The Colombian authorities and in particular the central bank have been working on a new payment system t…

• Digital Economy

January 17, 2024

Mexico | Mobile banking: the future or the present?

Mobile banking represents a turning point in traditional banking and a new paradigm for the financial system. The study seeks to show the most current statistics regarding the main trends in access, having and use of this technology and to offer some perspectives in the years to come.

January 12, 2024

Mexico | In 2023-2Q, 99% of adults in municipalities with access point (credit/capture)

In December 2023, the CNBV presented the latest update of its quarterly database on Financial Inclusion for 2023-2Q (financial services of banking and Popular Savings and Credit Entities). This note describes some results and compares them with the information before the pandemic.

January 5, 2024

Colombia | Large improvements in financial inclusion b…

In 2022, 34.7 million adults had at least one formal financial product in Colombia. This is more than fourteen million more than in 2012. With this, in the last decade, the percentage of adults with some financial product increased from 67.2% t…

• Consumption
• Global Economy

December 4, 2023

Mexico – US | Moving Up the Economic Ladder Book

Moving Up the Economic Ladder: 20 Years of Financial Inclusion of the Mexican Migrant Community in the U.S. A joint publication between the University of California San Diego, Sin Fronteras IAP, the Financial Education department at BBVA México…

October 6, 2023

Mexico | Financial prevention and population who needs…

In this press article, we emphasize the need for early financial inclusion based on the results of the National Survey for the Care System, which contains information on the demand for care of the population with a disability or dependency; min…

September 13, 2023

Open Finance: regulation, innovation and competition

The CNBV has made public its plans to issue the pending rules on Open Banking before year end, crucially those relating to "transactional data" which constitute the core of the Open Finance framework.

• Digital Regulation
• Financial Regulation

July 15, 2023

Mexico | Retirement savings and pension culture

There is an important need to promote the pension culture in the country. In this press release, some indicators on retirement savings in the Mexican adult population are reviewed.

Explore Community Content

FinDev Gateway hosts the largest, free collection of online resources on microfinance and financial inclusion. Explore over 8,000 publications, trainings, events, jobs and announcements which have been curated by our editors and submitted by a wide range of organizations from around the world.

Learn how you can share content >

Microfinance

Financial products, innovation & technology, social impact, sustainable development.

Inclusion in US financial services is at an all-time high – and tech can take us further

Technology facilitates education, accessibility and affordability in financial services. Image:  Unsplash/Denise Chan

.chakra .wef-1c7l3mo{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;}.chakra .wef-1c7l3mo:hover,.chakra .wef-1c7l3mo[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-1c7l3mo:focus,.chakra .wef-1c7l3mo[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);} John Hope Bryant

.chakra .wef-9dduvl{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-9dduvl{font-size:1.125rem;}} Explore and monitor how .chakra .wef-15eoq1r{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;color:#F7DB5E;}@media screen and (min-width:56.5rem){.chakra .wef-15eoq1r{font-size:1.125rem;}} Financial and Monetary Systems is affecting economies, industries and global issues

.chakra .wef-1nk5u5d{margin-top:16px;margin-bottom:16px;line-height:1.388;color:#2846F8;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-1nk5u5d{font-size:1.125rem;}} Get involved with our crowdsourced digital platform to deliver impact at scale

Stay up to date:, fairer economies.

• Technology provides education, accessibility and affordability in financial services for the most vulnerable worldwide.
• It is a gateway for those historically excluded to manage their own financial future.
• The more financially educated customers are, the more valuable they are to financial service providers.

Technology drives inclusion in financial services. It facilitates widespread education, accessibility and affordability that were previously reserved for a wealthy few, opening doors and breaking down barriers worldwide.

Digital tools are critical to achieving the worldwide impact necessary to support the most vulnerable. The G20 published a call to action that highlighted the importance of “leveraging the opportunities that technology offers to reduce costs, expand scale, and deepen the reach of financial services (which) will be critical to achieving universal financial inclusion.” Further, the OECD reported that “digital delivery, despite its specific challenges, can facilitate the effective provision of financial education, extend its reach, and contribute to positive behavioral change.”

Operation HOPE ’s core mission is to expand economic opportunity for all, and make free enterprise work for everyone. As the US’s largest financial literacy organization, we know that success is incumbent upon creating opportunities for people to take ownership of their financial future. Increasingly, that means connecting them to technology-enabled tools.

Have you read?

How to harness ai and data portability for greater financial inclusion, 4 things to know about financial inclusion around the world right now, how new technologies create a pathway to financial inclusion.

Technology and innovations in the financial services industry have enabled the most accessible, inclusive, and low-cost financial market there has ever been in US history. Hand-in-hand with this accessibility is the need for education. According to Pew Research Center : “Technology assets are strongly tied to the likelihood that people engage in personal learning”, with 82% of the US adult population with access to a smartphone and a home broadband connection having done some personal learning activity in the past year. This tells us that technology not only provides the opportunity for increased financial education; it can also be the solution for delivering that knowledge.

Consider reporting from the World Bank that states “delivering financial services through technological innovations … can be a catalyst for the provision and use of a diverse set of other financial services – including credit, insurance, savings, and financial education. Those who are now excluded can enjoy expanded access.” Technology serves as a gateway for individuals and communities who have historically not had access to manage their financial future.

What’s more, technology can allow for real-time learning and education; a crucial complement to increased access. The US’s National Financial Educators Council estimates that “lack of financial literacy cost Americans a total of more than $388 billion in 2023.” It is necessary that we embrace the unique value – and economies of scale – that digital delivery of financial education provides.

Contextualized learning is anchored in the principle that learning improves when it exists within a context that is relevant and delivers value for the learner. This is why Operation HOPE proudly pioneered the Investors’ Bill of Rights in 2021 as a call for the entire financial services industry to provide financial literacy and education to the next generation of investors. We believe that coupling education with access is core to economic empowerment. Further, with innovations in technology a third factor – affordability – comes into play. Technological advancements have helped level the playing field for first-time investors and investors of limited means to engage in the markets in the same way the wealthy few have enjoyed for decades.

In late 2023, the SEC proposed a rule – Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers – that addresses the use of technology and could limit advancements that have been in practice for decades. Introduced with the worthy premise of investor protection, the measure could have unintended consequences given its broadness. Specifically, it could eliminate efficiencies achieved via technology, which could increase costs, hinder access and compromise progress made with regard to market inclusivity. Take, for example, the Ariel-Schwab Black Investor Survey (2022), which highlighted that when it comes to growing and protecting their assets, Black Americans are less trusting of people (32% vs. 45%) and more trusting of technology (31% vs. 21%), than white Americans. This tells us how critical technology is for inclusion.

While investor protection is paramount, it must grow in conjunction with technology. Indeed, it is why we launched the Investors’ Bill of Rights: to provide a clear path for financial institutions, asset managers and their trusted advisors to incorporate greater financial literacy, knowledge and transparency in their offerings to retail investors. Regulation should not stand in the way of technological innovation as a tool for education.

While Operation HOPE centres the needs of families in our work, there is clear evidence that financial literacy is also good for business. That’s why the Investors’ Bill of Rights works. Financial institutions know that the more educated their customers are, the more valuable they are. Take for example the work of Cities for Financial Empowerment Fund’s Bank On programme, which forges coalitions between local governments, financial services institutions and non-profit organizations to uplift communities, deliver financial education, drive wealth creation and ultimately create a virtuous cycle of financial empowerment through education.

The World Economic Forum’s Platform for Shaping the Future of Digital Economy and New Value Creation helps companies and governments leverage technology to develop digitally-driven business models that ensure growth and equity for an inclusive and sustainable economy.

• The Digital Transformation for Long-Term Growth programme is bringing together industry leaders, innovators, experts and policymakers to accelerate new digital business models that create the sustainable and resilient industries of tomorrow.
• The Forum’s EDISON Alliance is mobilizing leaders from across sectors to accelerate digital inclusion . Its 1 Billion Lives Challenge harnesses cross-sector commitments and action to improve people’s lives through affordable access to digital solutions in education, healthcare, and financial services by 2025.

Contact us for more information on how to get involved.

Without technology to enable accessibility and affordability, a critical tool for driving economic growth will once again be out of reach for many. We need to embrace the value of digital tools to enable the financial future that so many deserve.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:

The agenda .chakra .wef-n7bacu{margin-top:16px;margin-bottom:16px;line-height:1.388;font-weight:400;} weekly.

A weekly update of the most important issues driving the global agenda

.chakra .wef-1dtnjt5{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-flex-wrap:wrap;-ms-flex-wrap:wrap;flex-wrap:wrap;} More on Fairer Economies .chakra .wef-17xejub{-webkit-flex:1;-ms-flex:1;flex:1;justify-self:stretch;-webkit-align-self:stretch;-ms-flex-item-align:stretch;align-self:stretch;} .chakra .wef-nr1rr4{display:-webkit-inline-box;display:-webkit-inline-flex;display:-ms-inline-flexbox;display:inline-flex;white-space:normal;vertical-align:middle;text-transform:uppercase;font-size:0.75rem;border-radius:0.25rem;font-weight:700;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;line-height:1.2;-webkit-letter-spacing:1.25px;-moz-letter-spacing:1.25px;-ms-letter-spacing:1.25px;letter-spacing:1.25px;background:none;padding:0px;color:#B3B3B3;-webkit-box-decoration-break:clone;box-decoration-break:clone;-webkit-box-decoration-break:clone;}@media screen and (min-width:37.5rem){.chakra .wef-nr1rr4{font-size:0.875rem;}}@media screen and (min-width:56.5rem){.chakra .wef-nr1rr4{font-size:1rem;}} See all

These 2 internal biases cause us to fall for misinformation - here's why

Alex Edmans

April 12, 2024

Explainer: What is a living wage and how is it different from the minimum wage?

Victoria Masterson

April 9, 2024

Building equitable futures through the Ibero-American Social and Solidarity Economy Network

Juan Manuel Martinez Louvier

March 5, 2024

How countries can save millions by prioritising young people's sexual and reproductive health

Tomoko Fukuda and Andreas Daugaard Jørgensen

March 4, 2024

5 ways to drive investment in the most challenging fragile places

Andrew Herscowitz

February 27, 2024

Are global value chains leaving Indonesian SMEs behind?

Arip Tirta and Prasanti W. Sarli

February 20, 2024

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

How Inclusive Brands Fuel Growth

• Omar Rodríguez-Vilá,
• Dionne Nickerson,
• Sundar Bharadwaj

Years before the Barbie movie phenomenon, leaders at Mattel became concerned that consumer perceptions of the famous doll were out of sync with demographic trends. The company conducted in-depth research to understand how customers felt about Barbie and to determine whether more-inclusive versions presented a strong market opportunity. The findings led to a new inclusion strategy that affected all areas of the brand—product design, distribution, and commercial activities—and coincided with a period of significant growth. Barbie revenues increased 63% from 2015 to 2022—before the boost from the film.

Research shows that in most industries the perception of inclusion can materially change customers’ likelihood to purchase and willingness to recommend products and services.

This article presents a framework for increasing marketplace inclusion in three areas: seeing the market, which is about market definition, market intelligence, and strategies for growth; serving the market, which involves developing products, packaging, and other commercial practices; and being in the market, which looks at advocacy and the customer experience.

They unlock new sources of value by meeting the needs of underrecognized customers.

Idea in Brief

The opportunity.

Research shows that the perception of inclusion can materially change customers’ likelihood to purchase and willingness to recommend products and services.

The Problem

Despite the many business and societal benefits of marketplace inclusion, there is a systematic lack of it across industries.

The Approach

Greta Gerwig’s Barbie grossed more than $1 billion at the box office in about two weeks. Only 53 films have ever hit that mark (adjusted for inflation). The 2023 movie, which features themes of women’s empowerment, multiculturalism, and inclusiveness, was a divergence from the narrow social and demographic representation of the original tall, thin, white doll that Mattel introduced in 1959.

• OR Omar Rodríguez-Vilá is a professor of marketing practice at the Goizueta Business School at Emory University and the academic director of education at its Business & Society Institute.
• DN Dionne Nickerson is an assistant professor of marketing at the Goizueta Business School.
• SB Sundar Bharadwaj is the Coca-Cola Company Chair of Marketing at the University of Georgia’s Terry College of Business. LinkedIn: Sundar Bharadwaj

Partner Center

• Sustainability
• Small Business
• New Mastercard report reveals key trends & opportunities to digitize remittances in Latin America and the Caribbean
• Overall remittances in Latin America have grown at a higher pace, 10% annually since 2014 compared to 4% globally.
• The United States – Mexico corridor is the single largest remittance pipeline in the world, with a 2023 volume of US$65 billion.
• 2023 should end up marking a turning point in which cash remittances are expected to reach their historical peak, declining in favor of digital options.

MIAMI – March 21, 2024 – Today, Mastercard released a whitepaper on the state of remittances, also known as cross-border payments, in Latin America. Remittances play a key role in strengthening financial inclusion in the region, boosting economies, and alleviating poverty –often serving as an essential source of income for people in low- and middle-income communities. According to the United Nations, 800 million people worldwide (or about one out 10) live in households that receive international remittances. In Latin America -- remittances have grown faster than those at the global level (10% annually since 2014 compared to 4% globally).

In 2022, formal remittance volume in Latin America reached US$146 billion, more than double the amount from a decade ago, and a 25x growth over the past 30 years. According to projections, 2024 will mark a shift toward greater speed, simplicity and security as digital remittances begin to outpace sending of physical cash across borders. After several years of accelerated digitalization, consumers in Latin America now have high mobile penetration, greater access to the internet, and fewer people that are unbanked and underbanked, sparking the growth of digital remittances in the region. In fact, as these trends continue to shape the digital agenda in Latin America, they are expected to generate an incremental US$20 billion in digital remittances by 2026.

In recent years, traditional providers have enabled digitalization and ushered in new players to the industry, including fintechs, digital wallets, blockchain companies, and other technology companies, responding to the trends seen in the Latin American remittances industry:

• In El Salvador, 2 out of every 10 families who receive remittances live in poverty.
• In Guatemala, at least 1 in 3 households count remittances as their main source of income.
• In Honduras, remittance recipients represent just about 50% of all households.
• In South America, inflation and political instability in the region are drivers of migration and remittances flows, which often utilize fintech and blockchain rails to avoid the problems that arise when using the traditional system.

Pain points to adoption

Despite the massive volume and positive impact of remittances, the industry still faces substantial challenges that limit full digitalization and adoption, including lack of transparency, trust and security in the system, poor digital user experiences, and slow transaction speeds. Additionally, dealing with regulation is perhaps one of the most acute issues, given the lack of legal, regulatory, and operational consistency across global jurisdictions.

A financial exclusion gap also still exists affecting underserved or unbanked communities. According to the Mastercard Borderless Payment 2023 global report, more than one-third of those surveyed said their families back home have limited options to access the money they send, and nearly one in four agree their family must travel a long way to access their funds.

This reveals financial and digital exclusion, as well as underdeveloped financial and digital infrastructure (e.g. lack of 4G coverage, low smartphone penetration, and absence of banks or remittance retail agents) present in the region.

Preparing for the future of remittances

To meet consumer demands and accomplish the necessary digital advancements to empower remittance adoption, companies and providers need to:  

• Adapt digital solutions to a cash environment. Remittances companies should enable receivers to use the money how they want—digitally or in cash.
• Provide transaction transparency and safety while also eliminating concerns. Companies should communicate pricing clearly before they execute a transaction, as well as indicate the expected timing for settlement.
• Build trust through regulatory compliance and digital innovation. Companies should enable faster customer onboarding and reduced processing time with digitalized KYC (know your customer) tools.
• Provide rewards to loyal customers and financial education. Providers should share educational information and offer post-transaction points, miles, discounts, gift cards, and/or other benefits.
• Provide everyday value and clear convenience over cash. Providers should emphasize the convenience of digital payments and demonstrate why digital remittances and cross-border services deliver more everyday value.

Mastercard’s technology and innovative solutions enable its customers to move money and data quickly and securely. Using Mastercard’s portfolio of international money transfer solutions,  Mastercard Move , participating financial institutions can offer their customers international payments to over 180 markets, including a global payout network of over 150 currencies that reaches 95% of the world's banked population. Mastercard Move reaches nearly 10 billion endpoints worldwide, including bank accounts, card, wallet, and cash payout locations. The portfolio combines the power of Mastercard’s existing and future money movement capabilities including Mastercard Send and Mastercard Cross-Border services.

The full Future of Remittances in Latin America is available for download  here .

Scope and methodology of the research

Mastercard partnered with PCMI, a payments industry market intelligence firm, to assess remittances in Latin America. The study markets include Mexico, El Salvador, Guatemala, Honduras, Brazil, Argentina, and Colombia compared against a broader global context. This research took place from October and December of 2023, which consisted of sourcing public data resources and conducting 10 in-depth interviews with six companies inclusive of banks, traditional and digital-only money transfer operators (MTOs), retailers, technology enablers, and Mastercard executives.

Media Contacts

About Mastercard (NYSE: MA)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

www.mastercard.com

• Investor Relations

Mastercard Sites

• Mastercard.com
• Mastercard Brand Center
• Mastercard Data & Services
• Priceless.com

Despite High Potential, 75 Vulnerable Economies Face ‘Historic Reversal’

In Half of IDA Countries, Income Gap with Wealthiest Economies is Widening

WASHINGTON, April 15, 2024 — Despite their high potential to advance global prosperity, one-half of the world’s 75 most vulnerable countries are facing a widening income gap with the wealthiest economies for the first time in this century, a new World Bank report has found . Taking full advantage of their younger populations, their rich natural resources, and their abundant solar-energy potential can help them overcome the setback.

The report, The Great Reversal: Prospects, Risks, and Policies in International Development Association Countries , offers the first comprehensive look at the opportunities and risks confronting the 75 countries eligible for grants and zero to low-interest loans from the World Bank’s International Development Association (IDA). These countries are home to a quarter of humanity—1.9 billion people. At a time when populations are aging nearly everywhere else, IDA countries will enjoy a growing share of young workers through 2070—a huge potential “demographic dividend.” These countries are also rich in natural resources, enjoy high potential for solar-energy generation, and boast a large reservoir of mineral deposits that could be crucial for the world’s transition to clean energy.

Yet a historic reversal is underway for them. Over 2020-24, average per capita incomes in half of IDA countries—the largest share since the start of this century—have been growing more slowly than those of wealthy economies. This is widening the income gap between these two groups of countries. One out of three IDA countries is poorer, on average, than it was on the eve of the COVID-19 pandemic . The extreme-poverty rate is more than eight times the average in the rest of the world: one in four people in IDA countries struggles on less than $2.15 a day. These countries now account for 90% of all people facing hunger or malnutrition. Half of these countries are either in debt distress or at high risk of it. Still, except for the World Bank Group and other multilateral development donors, foreign lenders—private as well as government creditors—have been backing away from them.

“The world cannot afford to turn its back on IDA countries,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President . “The welfare of these countries has always been crucial to the long-term outlook for global prosperity. Three of the world’s economic powerhouses today—China, India, and South Korea—were all once IDA borrowers. All three prospered in ways that whittled down extreme poverty and raised living standards. With help from abroad, today’s batch of IDA countries has the potential to do the same.”

More than half of all IDA countries—39 in all—are in Sub-Saharan Africa. Fourteen of them—mainly small island states—are in East Asia, and eight are in Latin America and the Caribbean. In South Asia, all countries except for India are IDA countries. Thirty-one IDA countries have per capita incomes of less than $1,315 a year. Thirty-three are fragile and conflict-affected states.

IDA countries share similar opportunities. The “demographic dividend”—a deep and growing reserve of young workers—is one of them. Abundant natural resources is another. These countries account for about 20% of global production of tin, copper, and gold. In addition, some IDA countries possess critical mineral deposits essential for the global energy transition. Because of their abundant sunshine, most IDA countries are well situated to take advantage of solar energy. On average, their long-term daily solar-electricity generation potential is among the highest in the world.

This potential, however, comes with risks that must be managed. To reap the demographic dividend, IDA governments will need to undertake policies to improve education and health outcomes and make sure that jobs are available for the rising number of young people who will enter the workforce in the coming decades. To seize the full potential of their natural-resource wealth, IDA countries will need to improve policy frameworks and build stronger institutions capable of better economic management. All of this will require ambitious domestic policy reforms—and significant financial support from the international community.

“IDA countries have incredible potential to deliver strong, sustainable, and inclusive growth. Realizing this potential will require them to implement an ambitious set of policies centered on boosting investment,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group . “ This means improving fiscal, monetary, and financial policy frameworks and advancing an array of structural reforms to strengthen institutions and enhance human capital."

IDA countries today have large investment needs. In the poorest of them, closing existing development and infrastructure gaps and building resilience to climate change will require investment that amounts to nearly 10% of GDP. The costs of climate disasters have doubled in IDA countries over the past decade: Economic losses from natural disasters average 1.3% of GDP a year—four times the average of other emerging market and developing economies. Such needs will require IDA countries to generate sustained investment booms—the type that boosts productivity and incomes and reduces poverty. Historically, such investment booms have often been sparked by a comprehensive package of policy measures—to bolster fiscal and monetary frameworks, ramp up cross-border trade and financial flows, and improve the quality of institutions. Such reforms are never easy, the report notes. They need careful sequencing and implementation. But previous IDA countries have shown they are possible.

IDA countries will need significant international financial support to make progress and lower the risk of “protracted stagnation,” the report notes . Stronger cooperation on global policy issues—including fighting climate change, facilitating more timely and effective debt restructurings, and supporting cross-border trade and investment—will also be crucial to help IDA countries avert a lost decade in development .

Website: https://www.worldbank.org/en/research/publication/prospects-risks-and-policies-in-IDA-countries

Facebook: http://www.facebook.com/worldbank

X (Twitter):  http://www.twitter.com/worldbank

YouTube: http://www.youtube.com/worldbank

This site uses cookies to optimize functionality and give you the best possible experience. If you continue to navigate this website beyond this page, cookies will be placed on your browser. To learn more about cookies, click here .

• Work & Careers
• Life & Arts

Become an FT subscriber

Try unlimited access Only $1 for 4 weeks

Then $75 per month. Complete digital access to quality FT journalism on any device. Cancel anytime during your trial.

• Global news & analysis
• Expert opinion
• Special features
• FirstFT newsletter
• Videos & Podcasts
• Android & iOS app
• FT Edit app
• 10 gift articles per month

Explore more offers.

Standard digital.

• FT Digital Edition

Premium Digital

Print + premium digital, weekend print + standard digital, weekend print + premium digital.

Today's FT newspaper for easy reading on any device. This does not include ft.com or FT App access.

• 10 additional gift articles per month
• Global news & analysis
• Exclusive FT analysis
• Videos & Podcasts
• FT App on Android & iOS
• Everything in Standard Digital
• Premium newsletters
• Weekday Print Edition
• FT Weekend Print delivery
• Everything in Premium Digital

Essential digital access to quality FT journalism on any device. Pay a year upfront and save 20%.

• Everything in Print

Complete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.

Terms & Conditions apply

Explore our full range of subscriptions.

Why the ft.

See why over a million readers pay to read the Financial Times.

International Edition