Impact and Measurement

Policy makers, donors, and investors are increasingly committed to advancing financial inclusion. This commitment underscores the need for greater accountability, evidence-based policymaking, and aid effectiveness. At the core of these efforts is a focus on measuring the impact of financial inclusion in a rigorous yet pragmatic way.

Impact is often measured at the micro level by examining how access to and use of financial services benefit poor individuals, households, and small businesses. This is an important part of measurement, but examining only this aspect does not give the full picture. It is equally important to understand how advancing financial inclusion contributes to the local economy and other macro-level indicators such as economic growth, equality, and stability.

Photo Credit: Charlotte Green, 2014 CGAP Photo Contest

Recent evidence indicates that inclusive financial services have a direct impact in a variety of ways. At the micro level, access to a variety of services such as savings, credit, insurance and mobile payments can have positive effects on individuals, families, and small businesses by helping them smooth consumption, manage risks, and invest in small enterprises. In addition, broader financial inclusion can positively impact a variety of macroeconomic indicators, such as local economic activity, economic growth, stability, and equality. Under normal circumstances, financial inclusion is positively correlated with growth and employment, and in some cases, even increased GDP per capita.

Emerging evidence also indicates indirect benefits of inclusive, low-cost financial systems. Financial inclusion can improve how effectively and efficiently governments deliver social welfare payments to citizens (government-to-person payments), which play an important role in the welfare of many poor people. Second, financial innovation can significantly lower transaction costs and increase reach, which enables new private-sector business models that help address other development priorities.

Many public donors and policy makers are currently focused on understanding the direct impact of their funding on the day-to-day lives of the poor. While this is important, there is growing consensus that a more holistic understanding of impact is needed. CGAP is working with donors and industry experts to develop innovative, and more complete, ways to measure inclusive market development and donor impact. The ultimate goal is to get a more complete picture of how financial inclusion affects the lives of the poor.


Contact: Karina Broens Nielsen


23 October 2017
Despite significant funding for financial inclusion efforts worldwide—an estimated US$34 billion was committed as of 2015—approximately 2 billion adults remain excluded from the formal financial system. How do funders of financial inclusion programs know if and how development programs are making a difference?
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English (120 pages)
03 March 2017
This paper explores the landscape of measuring financial inclusion in the Arab world. The Arab Monetary Fund and its task force is working with CGAP, the Alliance for Financial Inclusion, and GIZ, among others, to advance measurement of financial inclusion in the Arab world.
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English (34 pages)

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