Financial Inclusion: Running The Last Mile

25 March 2013

Over the last couple of years, we’ve witnessed great strides by governments in developing countries to tackle the issue of financial inclusion among their populations.  Guided by the principles enshrined in the Maya Declaration, the lion’s share of these efforts has focused on improving access to financial services.

 Photo Credit: Kim Chong Keat.

If we’re to accelerate financial and economic inclusion, providing greater access represents an essential means, but not the end itself.  Access provides an opportunity to have a financial account, but only crossing the threshold, to provide accounts that have true utility will bring us closer toward the ultimate goal: empowering more of the 2.5 billion adults to lead a more self-determined life and improve their livelihood.

For usage of financial accounts to improve to a level where benefits are generated beyond the account, a focus on the “last mile” becomes critical – addressing real user needs by aligning product design, distribution, business models and financial education.

Based on our observations of what drives greater usage we believe that there are three main organizing principles behind running that “last mile” successfully:

  • First, we need to foster a public dialogue about the costs of cash and the benefits of electronic payments;
  • Second, moving from dialogue to results requires partnerships – public-private partnerships as well as private to private, business partnerships – that are aligned to create better efficiencies and shared value;
  • And third, that shared value must generate greater financial empowerment, where opportunities are on the rise, not just for the few but for the many and where economic growth is more equitable, scalable, and above all, sustainable. 

To see these principles at work, you need look no further than countries such as Nigeria and Kenya that are pioneers in the quest for greater financial inclusion.  The trails they’re blazing include developing comprehensive national strategies, putting ambitious goals in place, facilitating partnerships that move from access to usage, and engaging in regional forums such as the Africa Mobile Phone Financial Services Initiative (AMPI), all the while acknowledging that each country is unique and not given to one-size-fits-all solutions. 

And in South Africa, the government is on track to exceed its target of 10 million citizens that receive their social benefits on a debit card. What began as a disbursement tool has become a real bank account for a population with limited to no access to bank branches.  In fact, the number of social grant recipients who have a checking or savings account with a bank has risen 15 percent in the last year alone from 60-75 percent.

In both the public and private sectors, we have an opportunity and an obligation to help in this push on the last mile for more and more people.  But we’ve got to ensure as we go along the trail, we keep our eyes on the tape at the finish and not get caught up in the race itself.  In the end, this challenge is made easier and the journey made better through partnerships among governments, NGOs, businesses and others in the ecosystem.

----- The author is the Vice-President of Global Public Policy at MasterCard.


Submitted by Dr.V.Rengarajan on
Thanks to technology which enables running to last mile. But will it help running to the last vulnerable unbanked poor in the last mile for his empowerment (key pillar of MAYA declaration) ? Dr Rengarajan

Submitted by Avik Kedia on
Dear Hemant, I read the article twice. Your insights are good, but I find them to be self-fulfilling. Why does all financial inclusion talk revolve around either 'microcredit' or 'banking' or 'mobile payments'? Financial inclusion is a 360 degree approach to achieving financial security, building assets, diversifying and much more for any family. But governments, service providers, academicians and others just get tired after a point, after they have talked about banking or mobile or microcredit - thus never fully discussing the complete approach to financial inclusion.

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