Financial Inclusion Data
Worldwide, there are vast populations that are not a part of any financial system. There is an immediate need for financial inclusion. According to financial inclusion data, this is not only a phenomenon of developing populations, but also of developed nations. Not being included in a financial system can be an almost insurmountable obstacle in personal economic development. When someone is cut off from the world’s financial system, it becomes challenging if not impossible to grow financially. How can a person create a financial plan and save for the future if they don’t have access to any financial systems? Financial inclusion data shows the extent of this worldwide problem and points the way to possible solutions for greater financial inclusion.
Financial Inclusion Around the Globe
In a day and age where many individuals, especially in third world countries, do not have access to basic financial services, financial inclusion represents the pursuit of making financial institutions and services available to all households regardless of socioeconomic status. The financial inclusion data we have today reveals that the socioeconomic mobility on those lower on the income ladder is often restricted due to a lack of access to necessary financial services and support from institutions. The financial inclusion data also informs us that this lack of access to basic financial institutions is commonplace in third world countries. On this page you will find financial inclusion quotes and other data to help you promote access to financial products.
Emulation and Education Helps Increase Financial Inclusion
A research study analyzing the effects of parents’ values on children found a statistically significant positive association between parent’s savings rates and children’s savings rates (University of Agder). https://home.uia.no/ellenkn/WebleyNyhus2006.pdf
An additional year of schooling increases the probability of having an investment income by 4.4% for whites and 1.7% for blacks (Harvard Business School). http://www.people.hbs.edu/scole/webfiles/cole-shastry-smarts%20HBS%20working%20paper.pdf
The State Bank of Pakistan advocates for the inclusion of the entire target audience through a variety of interactive mediums such as board games, comic strips, and street theaters (State Bank of Pakistan). http://www.sbp.org.pk/press/2012/FinancialLiteracyProgram-20-Jan-12.pdf
Financial Illiteracy Leads to Financial Isolation
North Dakota, which ranked 4th out of all 50 states on a financial literacy assessment, had the highest percentage of respondents at 55.5% declare they had an emergency fund (US Financial Capability). http://www.usfinancialcapability.org/downloads/NFCS_2015_State_Rankings.pdf
Households that scored higher on a specially constructed investment knowledge index were found to be more likely to have a diversified portfolio and have a 401(k) account (Federal Reserve). https://www.federalreserve.gov/pubs/bulletin/2003/0703lead.pdf
7.7% of those scoring in the lowest quartile of a basic financial literacy test participated in the stock market, while participation among those in the top quartile was 32.8% (National Bureau of Economic Research). http://www.nber.org/papers/w13565.pdf
Almost 50% of millennials don’t believe they could come up with $2,000 within the next month if an emergency arose (PwC). https://www.pwc.com/us/en/about-us/corporate-responsibility/assets/pwc-millennials-and-financial-literacy.pdf
Pregnant or parenting teens are more concerned about learning to save for a home in the future than learning how to save for college (Youth.gov). https://youth.gov/youth-topics/financial-capability-literacy/facts#_ftn8
Data Shows That Financial Inclusion Increases Financial Responsibility
Researchers asked individuals two sets of questions, one pertaining to basic financial literacy while the other related to advanced financial knowledge. The researchers then applied statistical techniques to construct indexes of financial knowledge. The probability of participating in the stock market increased 14 percentage points with a one standard deviation increase in advanced financial knowledge. In addition, a one standard deviation increase in basic financial literacy increases the probability of saving for retirement by 20 percentage points (DeNederlandscheBank). https://www.dnb.nl/en/binaries/working%20paper%20313_tcm47-257145.pdf
The results from a nationwide telephone survey asking whether the individual had taken an economics or business course at high school and whether they were banked found a statistically significant association between level of high school financial education and being banked (Wiley). https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1745-6606.2010.01171.x
The Australian government suggest initiatives form partnerships and coordinate with similar financial education programs in an effort to share best practices (Financial Literacy). https://files.MoneySmart.gov.au
Does Economic Inclusion Start with Women and Minorities?
Financial inclusion data informs policy makers and educators that there is a need for improved access to financial services in both developed and third world countries. Additionally, the financial inclusion data today divulges that certain groups, particularly women and minorities, do not have equitable access to the financial system when compared to other groups. The history of financial inclusion differences make a compelling argument for the construction of outreach programs and curriculums that are aimed specifically at women and minorities.