Who Loses in Financial Inclusion?

Who Loses in Financial Inclusion?

Peterson K. Ozili
Copyright: © 2023 |Pages: 12
DOI: 10.4018/978-1-6684-5647-7.ch005
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Abstract

Financial inclusion involves the provision of basic formal financial services to members of society. Policy efforts and collaboration with the private sector have helped to increase the level of financial inclusion in many countries. Such efforts give rise to net winners and net losers from financial inclusion efforts. This chapter identifies the net losers from financial inclusion efforts. The lesson from the net losers identified in this study is that being ‘banked' is only a necessary condition to enjoy the benefits of financial inclusion. Being ‘banked' is not a sufficient condition to enjoy the benefits of financial inclusion. A banked adult can be a net loser from financial inclusion despite being banked. This has wider implications for understanding the challenges to sustained financial inclusion.
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Literature Review

There is a consensus that financial institutions, technology companies and regulators are major stakeholders of financial inclusion. Financial institutions and technology companies use financial technology to offer financial products and services to banked customers to increase financial inclusion while regulators ensure that customers are treated fairly in the process (Ozili, 2018). Although financial inclusion efforts have been largely successful in developed countries, the progress made towards financial inclusion in developing countries has been very slow especially in some African countries and in some Latin America countries due to a number of issues that hinder access to basic and affordable financial services (Beck et al., 2015).

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