ABSTRACT

This chapter explores the scale of financial exclusion across the globe, the impact it can have on individual well-being, the factors behind financial exclusion and how technology in particular may help to increase inclusion. The term ‘financial inclusion’ is often used to refer to ensuring the participation of the unbanked and the underbanked population in the formal financial system. Most of the early research into financial inclusion was conducted using developed countries’ data and highlighted poor access, higher price and inadequate services as prominent reasons for financial exclusion. Financial deregulation removed restrictions on financial markets in many developed countries, unleashing the forces of competition. In the past, this has tended to help increase financial inclusion by expanding access to branch banking. Financial literacy is broadly defined as an understanding of basic financial concepts, numerical ability, attitude towards money, ability to mitigate risks and knowledge of financial assets.