Objectives and Importance of Financial Inclusion

Financial inclusion is pursued with clear objectives. The main aim is to extend the reach of formal finance to the unbanked and underbanked population so that no household is forced to depend on exploitative informal lenders. The key objectives can be listed as follows.

• Universal access to a bank account — every adult should be able to open at least a basic account with little or no paperwork and no minimum balance.
• Affordable credit — small borrowers should get loans from banks at reasonable interest instead of paying ruinous rates to moneylenders.
• Safe savings and remittance — a secure place to keep money and to send or receive it cheaply.
• Access to insurance and pension — protection against illness, accident, crop loss and old age.
• Direct delivery of benefits — wages, subsidies and pensions paid straight into accounts, cutting leakages and middlemen.
• Financial literacy — helping people understand and confidently use these services. …