Inclusive Finance

Inclusive finance, often confused with the ‘microfinance’, is concerned with financial services
and products destined to aid low income populations. It is a word that is on one hand more global
because it regroups all the activities linked to the financial sector, but also more precisely
because it clearly indicates its objective: to include the whole population of course, in the
economic system.

Inclusive finance is the range of banking products and financial services made available to poor
populations. These people are usually locked out of the conventional banking system due to their
low income. Inclusive finance helps them to finance their activities, save money, support their
families and hedge against the risks of everyday life.

A variety of players work to develop inclusive finance products and services, such as

microloans, micro-insurance, money transfers, micro-pensions and savings products. They are
marketed by a variety of financial institutions, including microfinance institutions, cooperatives,
micro-insurance brokers, banks, etc. These distributors must fulfil their duties in a responsible
and social way if they are to achieve the main objective of inclusive finance: fighting poverty.

Microloans, small loans for the creation of an income-generating activity, are the product that
made inclusive finance known among the public at large. The microenterprises that sprout thanks
to them help poor people to improve their living conditions.

When granting microloans to borrowers who usually have no guarantees of repayment, inclusive

finance organizations draw upon methods that have been tested and developed over the last four
decades. For these organizations, the road ahead is full of challenges. It is all about furthering the
interests of poor populations while guaranteeing their economic viability.

Finance becomes inclusive from the moment when it enables a given population, being a family,
a young entrepreneur, a larger firm to access to an entirety of services and products, sometimes
personalized, which respond to a specific need.

Those products or services can be of a financial type, as for example the access to a specific
credit, to a dematerialized payment system, subscription to an insurance or a system of
transaction management. But they can also be of a non-financial type:

Participating in a training, dispose of legal or accounting aid, support in creating a firm.

Inclusive finance is considered to be responsible, when it takes into account all the protagonists
of the value chain, namely the final beneficiary of course, but also the donors, the microfinance
institutions, and in a more global way the impact which it can have on our planet. Whether it is
environmental, energetic or economic.