FINANCIAL SERVICES FOR THE POOR

FINANCIAL SERVICES FOR THE POOR

OUR GOAL:

 

Our Financial Services for the Poor (FSP) program supports government and private-sector partners in a shared effort to establish financial services for the world’s poorest to use to build more prosperous and secure lives for themselves, their families, and their communities.

The Challenge:

Every year, millions of people around the world transition out of poverty. Regional growth and economic opportunities like new jobs, technologies, and business opportunities, help people build more stable economic lives. At the same time, millions of people remain trapped in a cycle of poverty that is very difficult to escape. We believe financial exclusion is a significant driver of this cycle.

About 1.7 billion people worldwide are excluded from formal financial services, such as savings, payments, insurance, and credit. In developing economies, only 63 percent of adults have an account. Women are excluded from these beneficial financial systems more often. Nearly one billion are still left out of the formal financial system, and there is a 9 percent persistent gender gap in financial inclusion in developing economies.

Most poor households instead, operate almost entirely through a cash economy. This means they have to save in physical assets, such as livestock or jewelry. Cash gets spent, animals die, and jewelry can be lost or stolen. What’s more, these forms of savings earn no interest and can actually lose value over time. To send money to family, those without a bank account have to rely on couriers or friends who carry cash by bus, which is expensive, insecure, and slow. To borrow money in an emergency, they must turn to moneylenders who charge notoriously high interest rates.

Without formal financial histories, people are also cut off from potentially stabilizing and uplifting opportunities like building credit or getting a loan to start a business. And it’s harder to weather common financial setbacks, such as serious illness, a poor harvest, or an economic downturn. All too often, financial exclusion makes the expenses of poverty difficult to overcome.

Our Strategy:

The Bill & Melinda Gates Foundation’s Financial Services for the Poor program works to broaden the reach of low-cost digital financial services for the poor. Our strategy is aimed at supporting what we and our partners believe are the most catalytic approaches to financial inclusion: helping to drive the development of digital payment systems that can help spread use of digital financial services quickly, advancing gender equality to ensure women share in the benefits of financial inclusion, and supporting the development of national and regional strategies that accelerate progress for the poor and provide exemplar models. To achieve these objectives, we work with partners around the world to align on common principles for digital financial inclusion and support policymakers as they work to develop policies and regulations that facilitate growth in digital financial services and provide oversight and accountability. We also invest in national financial inclusion initiatives where the largest number of people living in poverty stand to benefit from digital financial services, including: Bangladesh, India, Nigeria, Pakistan, Indonesia,Benin and East Africa.

We are not focused on establishing a particular product or distribution channel, but rather on finding innovative ways to expand access and encourage markets to determine which products and channels are most effective. We support approaches that can provide financial services to the broadest number of people, but we also recognize that countries are at different stages of developing inclusive digital financial systems, and their approaches must reflect the distinct needs of their economies and citizens.

Posted By Orphelinat immaculee conception Benin

orphelinatconception@gmail.com

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