Wednesday, November 13, 2013

The World Bank’s 2020 Financial Inclusion Program: Economically Viable Humanitarian Gesture?

An ambitious plan to provide basic financial access to all of the world’s working-age adults by the year 2020, is the World Bank’s upcoming financial inclusion program a kind of economically viable humanitarian gesture?

By: Ringo Bones 

One upon a time during the reign of Reagan and Clinton over much of the free world where every financially savvy freelancer had received their piece of the financial pie during this great period of widespread global economic expansion much of it due to the booming economy of the Clinton years. Unfortunately, not all of the working age persons around the world got their fair share of the profits of the economic good times during that period. Hopefully, a change for the better is at hand if the upcoming World Bank’s financial inclusion program succeeds in providing financial access to the 2.5 billion working-age persons that are currently have no access to basic financial services that have since became de rigueur in the developed world – like their own bank accounts, credit and basic insurance services – making them virtually denied access to financial security. 

Current studies show that as much as half of the world’s working-age adult population, almost all of them in the developing world, does not have access to basic banking services that had since been taken for granted in the developed world. Thankfully, a recent initiative by the World Bank that would eventually provide all working-age adults basic banking services by the year 2020 - given that almost all of them not only lack a working bank account, but also access to insurance services like unemployment insurance, a credit card account compatible with their wage, etc. 

During the past 30 years, Dr. Muhammad Yunus’ Grameen Bank had been one of the first financial institutions that provided financial inclusion to the working poor and self-employed small-business entrepreneurs in Bangladesh that in the next few years had served as a model for microfinance services that flourished in the region during the intervening years – as in nearby India and in the rest of the developing countries around the world. More recently, mobile banking services, like the Kenyan based M-Pesa stared by the telecommunications company Safaricom, had provided money transfer services for much of African continent to anyone with a mobile phone which had served as a vital lifeline to every independent small-business entrepreneurs across Africa.     

If it succeeds, the World Bank’s 2020 financial inclusion program could provide the much needed financial security for the rest of the world’s working-age adult population who currently don’t have access to basic banking services that serve as a precondition to financial security. Margaret Miller, chief economist of the World Bank, recently explained that their financial initiative is economically viable by current global financial practices. And the World Bank also aims to benefit the poor, the women and other vulnerable groups – i.e. ethnic minorities who are often unfairly targeted in times of economic strife – in most developing countries around the world.