News & Views

Financial inclusion: are we finally asking the right questions?

This post is written by Bath SDR Associate Aurelie Larquemin who has worked on a number of QuIP studies in the financial inclusion sector. Contributions were also made by Prof James Copestake.

National and global statistics on changing access to financial services have improved greatly in the decade since the 2011 Maya Declaration on financial inclusion. However, the latest focus note from CGAP (Consultative Group to Assist the Poor) “A research and learning agenda for the impact of financial inclusion”, published in December 2020, highlights how little we still know about the actual use of newly accessed financial services by previously excluded people and groups. Hitting financial inclusion targets means very little if new bank accounts remain unused, new borrowers are saddled with debts they cannot afford to service, and insurance policies fail to cover the shocks their holders actually experience.

The CGAP focus note starts out by making a useful distinction between how financial services can help people both to seize new opportunities and also manage shocks. It usefully reminds us, as researchers, to be open to stories of change that do not proceed smoothly along a positive and linear trajectory. It also points to an analysis of resilience based on how people anticipate bad times when things are good, and plan for good times when they are bad. Indicators of increased saving, holding of insurance products, remittance payments etc are all relevant to such understanding. But so is evidence of users’ aspirations, how well informed they are about financial options (including juggling financial and non-financial assets) and their ability to plan.

Important new research avenues are laid out in the focus note, covering both individual and contextual characteristics leading to different financial strategies and investment choices. Covid-19 and its repercussions have reminded us that this entails not only managing diversified and often precarious livelihoods, but also making critical decisions over investment in housing, health and education. A critical but neglected issue is the relationship between access to financial services and social norms – as they affect women’s autonomy and decision-making power, for example.

Beyond the issue of ‘what to learn’ the focus note also addresses ‘how to learn’.  Acknowledging the limitations of set-piece quantitative impact assessment it encourages financial institutions to invest more in evaluation methods that employ a mix of qualitative and quantitative approaches, informed by prior theory, but also sensitive to the complexity of causal processes (as outlined above), and hence the dangers of framing research too narrowly. In short, the CGAP focus note strongly affirms the ongoing commitment of Bath SDR to application and adaptation of the QuIP methodology in ways that unravel the many ways financial inclusion initiatives can affect clients’ current and future wellbeing.


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