Answer – 2

Due to insufficient income levels and market discrimination in

developing regions, there are still millions of people involuntarily
excluded from the financial system, which creates potential loss of
savings, investable funds, and accumulation of wealth. Financial
inclusion helps to fill these gaps and provide households and firms
greater access to resources needed for finance consumption and
investment and thereby raise the level of economic activity. In
addition, financial inclusion makes growth inclusive: access to
finance can enable economic agents to take part in long-term
participatory investment activities, facilitate efficient allocation of
productive resources and thus reduce the cost of capital, cope with
unexpected short-term shocks, significantly improve day-to-day
management of finances, and reduce usually exploitative informal
sources of credit