Financial Inclusion 2020 Report: Call to Action on Financial Capability
by FinancialCorps, 02 October 2015
Upon the release of the Financial Inclusion 2020 (FI2020) Progress Report by Accion and the Center for Financial Inclusion it was immediately clear how much progress has been made during the last few years in providing low-income people with access to financial services. Some 700 million new accounts were created since 2011. However, amid that progress it also has become clear that greater levels of financial education and literacy are critical to enable those holders of financial services accounts to best manage their finances.
FI2020 calls on regulators, financial services companies, mobile phone operators and NGOs to develop products that not only provide greater access to sound financial products, but that also include education to teach individuals and families how to use those products.
The report provides several recommendations for change. First, financial education initiatives should incorporate principles of behavioral economics in order to change the behavior of the target audience. The increased availability of financial products will have limited impact if users do not change their behavior in a way that facilitates the use of those products.
Second, the report calls upon financial services companies and other product providers to share a greater amount of responsibility for the financial capability of individuals and families throughout the world. Given that financially savvy consumers will have a positive impact in their communities, product providers will benefit.
Third, non-financial organizations that work with large populations of government benefit recipients, long term employees, hospital patients or immigrants to assist those individuals in managing the financial elements of their major life milestones given the recognition of the importance of those events financial in the lives of individuals and families.
More information regarding the report and the recommendations can be found here.