Financial inclusion and poverty reduction: the role of ... - uncitral

ensuring financial inclusion and (ii) strengthening social protection are particularly
relevant to the Colloquium and this session.
6. Financial inclusion is critical to achieve inclusive growth and it is a prerequisite for
sustainable economic growth and development. Harnessing the power of technology is
one of the most effective ways of integrating the unbanked population into the financial
mainstream and I understand there is a separate session on this topic. Technology
enables the provision of a host of services from depositing money into various
government schemes to micro loans and micro insurance. Uneven and inequitable
growth has resulted in the exclusion of 51 percent of India’s population (560 million
people) from formal sources of finance services, which is identified as a key cause of
poverty, together with illiteracy.
7. Sometime ago (2008) a Forbes article reported that an estimated 750 million
households worldwide don't have a bank account. In Mexico, cash transactions
constitute 79% of payments. In India 91%. In China, 82%. Even in the U.S., 80 m people
are in the category of the under‐banked. Most people around the world, however, own
a mobile phone.
8. An ADB’s study found that rural financial markets in Asia are ill prepared for the 21 st
century. It is mostly low‐income and rural individuals and micro‐ and small‐sector
enterprises that are under‐serviced by the financial industry. And without transactional
banking services, their financing is insecure and expensive and the disadvantaged
people cannot participate fully in the economy either as consumers or potential
entrepreneurs. The unmet demand for micro‐finance services is estimated to be nearly
US$300 billion, of which the existing micro‐finance institutions (MFIs) supply only about
US$15–25 billion.
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