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Financial Inclusion 2.0

    For years, the financial inclusion sector has focused on a fundamental goal: making sure more people can access financial services. That effort has brought enormous progress. By 2024, 79% of adults worldwide had an account. But having an account is only part of the story. What matters is whether financial services are actually helping people manage their lives, weather setbacks, pursue opportunities, and build a more secure future. 

    Through its Financial Inclusion 2.0 initiative, CGAP set out to help the sector make that shift, from measuring access to understanding outcomes. 

    Over three years, CGAP worked with financial service providers, researchers, funders, policymakers, regulators, and other partners to understand when financial services contribute to better outcomes, for whom, and under what conditions. The work brought together existing evidence, new research and data, and practical approaches to understanding and measuring the impact of financial services on individuals, households, and businesses. 

    This work now provides a stronger foundation for more informed decisions across the global financial inclusion sector. It offers: 

    1. Evidence that is easier to navigate and use by funders, policymakers, and other practitioners. 
    2. A deeper understanding of why the impact of financial services varies, and a framework to help lenders make evidence-based decisions. 
    3. New analytical tools for financial institutions and researchers to learn from existing data, better understand customer outcomes, and tailor services accordingly. 
    4. A practical framework for measuring financial health, helping the sector assess whether people’s financial lives are improving.

     

    The Journey from Access to Outcomes: Built with the Sector

    The work under the Financial Inclusion 2.0 was shaped with the sector. 

    CGAP worked with public- and private-sector stakeholders from around the world, including financial institutions, policymakers, funders, and researchers. Senior leaders served as champions, helping build momentum around a stronger focus on outcomes. Technical advisers and researchers brought expertise, challenged assumptions, and strengthened the work. Financial institutions shared data and tested new approaches in real operating environments. Research partners helped bring together data that no single organization could assemble on its own.

    Working with these partners allowed CGAP to test ideas against real-world experience, strengthen the research and methods, and provide practical guidance. The aim throughout was to produce knowledge that could stand up to scrutiny and help inform real decisions.

    Financial Inclusion 2.0 Champions

    What We Learned About Financial Services and Development Outcomes

    As financial inclusion has expanded, the questions facing the sector have become more ambitious. How can financial services strengthen women’s economic empowerment? Help people respond to climate risks? Support entrepreneurs, create jobs, or build resilience? There is growing interest in these possibilities, but also real debate about what financial inclusion can achieve. The evidence is extensive, but it is spread across hundreds of studies and can be difficult to interpret as a whole.

    In 2025, CGAP launched the Impact Pathfinder, an evidence platform that maps how financial services can contribute to different development outcomes and makes the research behind those pathways easier to explore and use. In 2026, the platform was expanded with additional evidence and new ways to explore it, including an AI-powered chatbot that allows users to ask questions tailored to their interests and context.

     

    What is Impact Pathfinder?

    Hear From Key Stakeholders

     

    Three Findings that Stand Out:

    1. Digital payments stand out as one of the most consistently positive pathways to opportunity. Across the platform, the evidence repeatedly links digital payments with higher incomes, stronger entrepreneurship, and better outcomes for women’s economic empowerment, mainly by speeding remittances, lowering transaction costs, and helping people and firms transact, save, and invest more productively.
    2. Credit stands out for being powerful, but results are mixed. The evidence often links credit with better opportunity-related outcomes, including jobs, enterprise growth, and women’s agency. But the picture is much less consistent when it comes to resilience and long-term recovery after shocks, with some evidence of negative outcomes. The recurring pattern is that credit helps when it finances productive investment, but it can harm when repeated borrowing under stress leads to repayment pressure or overindebtedness.
    3. The resilience evidence suggests that coping is easier than recovery. Pathfinder more often finds evidence that financial services help households manage short-term or moderate shocks than that they support full recovery from severe, repeated, or community-wide shocks. That pattern is especially visible in savings and credit: they often help with smoothing consumption and avoiding immediate distress, but are not enough on their own for long-term recovery.
    Impact Pathfinder visual featuring arrows that represent different pathways, illustrating the connections between financial inclusion and development outcomes
    Publication

    Impact Pathfinder: Evidence-Based Insights on the Impact of Financial Inclusion

    The Impact Pathfinder is an evidence platform designed to shed light on the impact of financial inclusion on development.

     

    Blogs Featuring Insights from the Impact Pathfinder

    Why Does the Impact of Inclusive Credit Vary So Much?

    Visual showing the five factors that shape outcomes from inclusive credit

    The Impact Pathfinder made clear that looking at average effects only takes us so far. To understand what sits behind those averages, CGAP took a closer look at inclusive credit.

    The Focus Note Opening the Black Box on the Impact of Inclusive Credit draws on 405 studies and organizes the evidence around five factors: who uses credit, how it is designed and delivered, what it finances, where it is provided, and when outcomes emerge and are measured.

    The framework helps shift the discussion from whether credit works to a more useful question: under what conditions is it more likely to benefit customers, and what can providers, funders, and other actors do differently?

    For financial service providers, this offers a practical framework for thinking about product and portfolio decisions through an outcomes lens. For funders and other sector actors, it points to ways of supporting approaches that are more responsive to differences among customers and markets.

    Three Findings that Stand Out:

    1. The same credit product can help one borrower and harm another. Credit is a high-variance tool. The strongest gains tend to occur when borrowers have viable opportunities, relevant experience, and control over how the loan is used. Risks are greater when borrowers are already highly vulnerable or when the product is poorly matched to their circumstances.
    2. How credit is designed and delivered matters as much as who receives it. Loan size, repayment flexibility, how funds are disbursed, and whether credit is paired with other support can all shape outcomes. This means lenders have important choices they can make to increase the chances that credit helps rather than harms.
    3. Context and time can change the outcome. The same product can perform differently depending on market conditions, regulation, social norms, and climate risks. Outcomes can also take time to emerge, meaning short evaluations may miss both longer-term gains and harms that build gradually.
    A smiling African market vendor Photo: Renate Wefers
    Publication

    Opening the Black Box on the Impact of Inclusive Credit

    Inclusive credit is one of the most celebrated and contested tools in development. This Focus Note reframes that debate. Rather than asking whether credit works, it asks: for which borrowers, through what product designs, and under what conditions does inclusive credit generate meaningful benefit rather than harm?

    Featured Insights on Inclusive Credit

    Visual Showing FinDev Interview with Karina Broens Nielson

    FINDEV Interview

    Let’s Talk About Microcredit: Why Is the Story So Complicated?

    In a new FinDev Gateway interview, CGAP’s Karina Broens Nielsen discusses why the evidence on microcredit has produced such different interpretations, what the five-factor framework adds to the debate, and what providers, funders, and policymakers can do differently to put the evidence into practice. 

    A man pulls in fish in his net Photo credit: Thaib Chaidar

    Project syndicate Op-ed

    The Microfinance Debate Is Missing the Point

    For too long, policymakers, economists, and investors have focused on whether microfinance actually helps people, reducing a complex issue to a meaningless yes-or-no verdict. The most important questions concern how loans are designed, delivered, and regulated, who receives them, and what they are used for. 

    Women farmers in Senegal Photo credit: Daniella Van Leggelo-Padilla

    Blog

    Rethinking Evidence: When Does Inclusive Finance Work and for Whom

    This leadership essay reassesses what we think we know as a sector, evaluating the strengths and weaknesses of the existing evidence base and proposing new methods for building a better one. 

    How Can Financial Institutions Learn More from Data They Already Have?

    Sector-wide evidence can tell us a great deal, but financial institutions also need ways to understand what is happening within their own portfolios.

    CGAP tested Precision Causal Modeling with five financial institutions across 19 countries to see whether a newer analytical approach could help them learn more from data they already collect. The idea was practical: could institutions use their own data not just to track repayment or performance, but to understand which customers are doing better, which are not, and what might be driving those differences?

    For investors and funders, this also raises an important question: are the institutions they support focused on customer outcomes, and do they have the tools and capabilities to measure, track, and act on them? 

    Three Findings that Stand Out:

    1. Customers who look similar on paper can experience very different outcomes, and those differences can be large. Across the five pilots, the difference in positive outcomes between similar clients who received the better-suited service combinations and those who did not was substantial, ranging from 32 to 84 percentage points across the pilots, highlighting the importance of tailoring services to clients needs.
    2. Institutions may already have much of the information they need to make better decisions. Across the pilots, existing FSP data revealed several recurring patterns: right-sized loans and gradual loan growth of roughly 30 to 50 percent per cycle were associated with better outcomes; repayment trends were more informative than a single missed payment; and the quality of the client relationship also mattered.
    3. New approaches to measuring impact can be applied in financial institutions, not only in research settings. As the first applications of PCM in financial services, the pilots showed how institutions can move beyond averages to explore which choices appear to work better for which customers. The broader lesson is not that PCM is the only answer, but that institutions can use emerging analytical methods to learn more from their own data and apply those insights to product, policy, and operational decisions. 
    A person wearing a purple and yellow patterned garment uses a probe tool to repair the internal circuitry of an open portable speaker, with a multimeter and other tools visible on the workbench nearby. Photo by Temilade Adelaja via Communication for Development Ltd
    Publication

    Hidden in Plain Sight: Unlocking Actionable Insights in Client Data

    CGAP’s Precision Causal Modeling (PCM) Guide introduces a new analytical approach for helping financial institutions and investors learn more from data they already collect. Drawing on pilots with five institutions, the guide explains how PCM can help uncover why similar customers experience different outcomes and identify product and delivery choices that may work better for different groups.

    What More Can We Learn by Combining Existing Research Data?

    Financial Inclusion 2.0 also explored whether the sector could learn more from research that had already been done. CGAP worked with Innovations for Poverty Action and Northwestern University’s Global Poverty Research Lab to bring together data from 29 randomized trials covering more than 115,000 people in 18 countries.

    The result is the Credit’s Heterogeneous Impact Pathways Study, or CHIPS, a harmonized dataset that allows researchers to look across studies and examine how the effects of microcredit vary across people and circumstances. CHIPS dataset does two things. It opens new possibilities for research using existing data, and it shows where future research needs to become more consistent if the sector wants better answers about who benefits, under what conditions, and why. 

    Researchers are invited to use the dataset, test new questions and methods, and build on it to deepen the sector’s understanding of how and why microcredit outcomes vary.

    Three Findings that Stand Out:

     

    1. Looking across studies makes it possible to ask who benefits, not just whether microcredit works on average. CHIPS creates the scale needed to examine how outcomes may differ by characteristics such as gender, livelihood, household size, and rural or urban location. It does not answer those questions on its own, but it gives researchers a new way to investigate differences that individual studies are often too small to examine.
    2. Trying to combine studies exposed important gaps in what the sector has been measuring. Many outcomes that matter today were not measured consistently enough to analyze across studies, including women’s economic empowerment, food security, psychological well-being, and savings. None of the eligible studies captured climate adaptation and resilience outcomes. Important contextual information and basic product features such as interest rates, loan terms, and repayment structures were also frequently missing.
    3. Existing research can yield more knowledge when combined with newer analytical methods. A harmonized dataset makes it possible to examine how effects vary across people and contexts rather than stopping at an average impact. 
    Women use Wave, a mobile money platform, to send money to their microcredit group in Dakar, Senegal. Photo credit: Annika Hammerschlag
    Blogs

    What Makes Microcredit Work, And for Whom? Introducing the CHIPS Data Set

    The Credit's Heterogeneous Impact Pathways Study (CHIPS) data set explores whether existing data could be used in new ways to find answers to lingering questions about the impact of microcredit, among other financial services, on customers.

    Can Financial Health Help Track Whether People’s Financial Lives Are Improving?

    Better evidence and better analysis only take us so far. An outcomes-focused sector also needs a practical way to measure and track whether people's financial lives are actually improving over time.

    Financial health provides that lens. It shifts attention from whether someone has or uses a financial service to whether those services are helping people manage day-to-day needs, cope with shocks, pursue opportunities, and feel greater control over their financial lives.

    CGAP translated this idea into a practical measurement framework with six constructs and 17 indicators. The framework is designed primarily for financial sector authorities, helping them identify vulnerable groups, assess how financial health changes over time, understand whether policies are associated with better outcomes, and detect early signs of financial stress or consumer harm.

    Just as importantly, it gives authorities a place to start. They can look at what their existing surveys and administrative data already capture, identify where important gaps remain, and strengthen measurement over time.

    Three Findings that Stand Out:

     

    1. Financial health cannot be understood through access, usage, or a single indicator. Someone can have an account, use financial services frequently, and still struggle financially. The framework therefore looks across different parts of financial life: meeting day-to-day needs, using financial services safely, managing debt, coping with shocks, pursuing longer-term goals, and feeling control and confidence. It translates these into six constructs and 17 indicators.
    2. Measuring financial health requires different kinds of data. No single survey question or administrative measure provides the whole picture. Survey data can capture experiences and perceptions that transaction records cannot, while administrative data can provide timely information on behaviors such as arrears, debt loads, savings, or insurance. Used together, they provide a fuller picture.
    3. Countries do not need perfect data systems to begin. The framework is deliberately a foundation, not a rigid standard. Authorities can start with the data they have, be transparent about what it does and does not capture, and strengthen measurement over time. Financial health information can then be used to identify vulnerabilities, assess change, and detect early signs of financial stress or harm.
    a pair of hands weaving red texture Photo by Froi Rivera
    Publication

    Measuring Financial Health: A Framework

    This working paper presents a practical framework for measuring financial health. Drawing on 70 existing initiatives it translates the G20/GPFI definition of financial well-being into six measurement areas and 17 indicators which help financial sector authorities identify vulnerable groups, assess policy impacts, and detect early signs of financial stress.

    What Comes Next: A Stronger Foundation for Action

    Financial Inclusion 2.0 began with a simple but demanding question: how can we know whether financial inclusion is actually improving people’s lives?

    Three years of work have made the answer clearer, but also more nuanced. We now have a more accessible body of evidence on the outcomes associated with different financial services, a stronger understanding of why the same service can produce different results for different people, new ways to learn from institutional and research data, and a practical framework for measuring whether people’s financial lives are improving.

    Together, these contributions move the sector beyond a debate about whether financial inclusion has impact. They provide better ways to ask what works, for whom, and under what conditions, and to use that knowledge to make more informed decisions.

    The next step is to put these ideas into practice more consistently: bringing evidence into product and funding decisions, strengthening how institutions learn from their own data, improving the quality of research, and measuring financial health over time.

    The Financial Inclusion 2.0 initiative is complete, but the outcomes agenda continues. CGAP will carry this work forward with a deeper focus on financial health and on helping institutions translate an outcomes orientation into decisions, policies, and practice.

     

    Reflections from Financial Inclusion 2.0 Champions

    Related Blogs

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    Three Principles to Guide Financial Health Measurement

    Global financial health measurement varies, reflecting the need for widely applicable guidelines to make sure financial health measurement provides relevant insights. We outline three principles to help refine approaches and improve insights.
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    Financial Well-being – A Concept That Has Come of Age

    The GPFI’s 2024 G20 Policy Note on Financial Well-Being offers a clear framework for linking financial inclusion to meaningful outcomes. It highlights how financial policies, consumer protection, and digital innovation can drive progress, shaping lives far beyond access to services.
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    Rethinking Evidence: When Does Inclusive Finance Work and for Whom

    This leadership essay reassesses what we think we know as a sector, evaluating the strengths and weaknesses of the existing evidence base and proposing new methods for building a better one.
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    Beyond Account Access: Converting Financial Inclusion into Resilience

    Account ownership in LMICs has nearly doubled since 2011, but financial resilience remains stubbornly low: just 56% of adults can access emergency funds within 30 days. Achieving true progress on financial resilience will mean moving beyond account ownership as the primary metric of success.
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    Measuring Financial Health: Findex Broadens Its Scope

    Financial health is rising on global agendas, but measuring it remains fragmented. The 2025 Global Findex expands coverage across four key dimensions, offering a step toward global benchmarks while balancing local realities.
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    When Does Financial Education Work Best? Evidence-Based Insights

    CGAP’s Impact Pathfinder consistently identified financial education as a factor for the uptake and use of financial services, prompting us to ask: Could it be playing a more central role in what works, for whom, and in what circumstances?
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    Outcome Indicators in Financial Inclusion - Are They Up to the Challenge?

    Indicators help track progress across populations and evaluate financial service impacts. To justify their high cost, it's crucial to define their capabilities and limitations in addressing geographic and demographic variations.
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    Financial Inclusion 2.0: Generating New Evidence to Maximize Impact

    Despite extensive research, the financial inclusion sector still lacks a clear understanding of what works, when, and for whom. Financial services' impact varies widely, highlighting the need for new research and more nuanced insights.
    Blog

    Financial Inclusion 2.0: Embracing a New Outcome Agenda

    Financial inclusion has a key role to play as an enabler for development outcomes and as a foundational element to improve livelihoods and build resilience in an ever more vulnerable and turbulent world.

    Earlier CGAP Work on the Impact of Financial Services

    Financial Inclusion 2.0 builds on CGAP’s earlier efforts to explore the impact of financial inclusion, identifying key knowledge gaps and unanswered questions that we are now addressing. The publications below reflect those foundational efforts.

    Publication

    Emerging Evidence on Financial Inclusion

    Recent research on the impact of financial services on the lives of low-income people tend to focus on microcredit or a single financial product. Recognizing the need for a more nuanced and clearer impact narrative, this Focus Note synthesizes evidence since 2014.
    Publication

    Toward a New Impact Narrative for Financial Inclusion

    The global development community has debated the question of how financial services impact the lives of poor people for decades. Recently, CGAP has developed a theory of change to guide the financial inclusion community toward an updated narrative that shows the many ways financial services can impact the lives of poor people.
    Video

    CGAP Theory of Change for Impact and Evidence

    CGAP has created a nuanced and clear impact narrative. This video showcases the potential pathways through which the use of financial services helps poor people build resilience and seize opportunities.
    Publication

    A Research and Learning Agenda for the Impact of Financial Inclusion

    The financial inclusion community is renewing its efforts to understand the role financial services play in the lives of poor people and how financial services can improve their well-being. This paper proposes a learning agenda based on extensive consultation with donors, researchers, and practitioners who support financial inclusion.
    Blog Series

    Impact and Evidence in Financial Inclusion: Taking Stock

    Whether and how financial services improve the lives of low-income people remains the subject of intense debate despite decades of evidence-gathering. The evidence to date appears mixed and often contradictory. As a result, different factions in the international development

    Publication

    Financial Inclusion and Development: Recent Impact Evidence

    This paper proposes that the accumulating body of evidence supports policy makers’ assessments that developing inclusive financial systems is an important component for economic and social progress on the development agenda.