Financial Inclusion

Financial inclusion can be defined as the process of

ensuring access to financial services and timely and
adequate credit where needed by vulnerable groups
such as weaker sections and low income groups at an
affordable cost.

Importance of Financial Inclusion and Financial

Exclusion
 A bigger financial deepening has a direct impact on the
growth rate of the countries, due to the consumption
capacity expansion and increase in investment potential.
 Access to financial services has positive effect in reducing
poverty.
 It empowers people and the improvement of their living
conditions become sustainable.
Financial Exclusion
Financial exclusion refers to individuals and populations without
access to common financial services.
• Financial exclusion makes poverty much worse.
• People are excluded because of their socio-economic status and
because they can’t meet the requirements of a formal banking
institution.
• Borrow from informal lenders whose loan limits are low, and
interest rates are usually very high.
6 Pillars of Financial Inclusion
Access

Quality
Infrastructure

Financial
Inclusion

Quality
Social

Education
Financial Literacy
Financial literacy refers to the ability to understand and apply
different financial skills effectively, including personal
financial management, budgeting, and saving. Financial
literacy makes individuals become self-sufficient, so that
financial stability can be accomplished.

5 Key Components of Financial Literacy

1. The Basics of Budgeting
2. Understanding Interest Rates
3. Prioritizing Saving
4. Credit-Debt Cycle Traps
5. Identity Theft Issues & Safety
Financial Literacy Initiatives The Financial Tripod

Financial education, financial Financial Education

inclusion and financial stability are
three elements of an integral strategy,
While financial inclusion works from
supply side of providing access to
various financial services, financial
education feeds the demand side by
promoting awareness among the
people regarding the needs and
benefits of financial services offered
by banks and other institutions.

Financial Inclusion Financial Stability