top of page

The Missing Gaps in Financial Inclusion and the Way Forward

The finance sector is constantly looking for ways to improve financial inclusion. In order to improve this, we need to assess what the biggest gaps are and what we can do to close these gaps. Below we explore the missing gaps in financial inclusion, why these may be the case, and how we can solve these to improve financial inclusion. Let’s dive in.

What is financial inclusion?

Financial inclusion is a term commonly used in the finance sector. It’s essentially the phrase used to define the efforts that are made to make financial products and services more accessible to everybody. This includes both individuals and companies. The goal overall is to make financial inclusion widespread.

There are known barriers that exclude people from participating in the financial industry. This isn’t just for monetary gain, though. It has been proven that various financial knowledge and services can improve the lives of ordinary people, especially those who are considered the most vulnerable.

For example, financial inclusion will help individuals, families and companies plan for the future as well as be prepared for unfortunate/unexpected life events. When financial inclusion begins to happen, you result in more people using savings, insurance, credit, and investing. These can all improve the quality of life. However, the barriers to financial inclusion have been an ongoing problem, and the financial industry is constantly trying to discover new ways to provide useful services and products to the wider population.

Why is financial inclusion important?

Studies have been conducted on financial inclusion which reiterate how important it is. Financial inclusion allows those who have otherwise been ostracised to benefit from useful products and services. Something otherwise limited to just the affluent few.

It has been found that financial inclusion can uplift the welfare of the general population, reduce poverty, and increase productivity. It also has a positive impact on a country’s macro-economy, making it a beneficial change for both individuals and governments alike. This is likely why global economic policy agendas very often focus on strengthening financial inclusion.

Countries with the highest levels of financial inclusion are the Nordics, so Denmark, Finland, Norway, and Sweden. This likely comes as no surprise to anybody – these countries are also accredited for having the best quality of life.

So what are the gaps in financial inclusion that are preventing many countries from improving their quality of life and their macroeconomy? The following are the main pitfalls.


While the number of women with access to bank accounts is increasing, the gap between men and women in terms of financial inclusion still persists. Financial inclusion can help to achieve gender equality – only when women have equal access to the full range of financial services will they be able to achieve the same levels of social mobility. So, savings, credit, payments, and insurance.

The financial inclusion gender gap differs across regions. For example, The Middle East and South Asia regions have a gender gap of more than 10% whereas North America has a gap of less than 1%. Some countries are pushing for gender equality in terms of financial inclusion, too. India is a great example of this – their gender gap has shrunk substantially in recent years.

Mobile money accounts could help to shrink the gender gap in account ownership over time. This alongside policy changes could help to expand women’s inclusion.


Poverty is also seen as one of the main barriers to financial inclusion. People with little to no money obviously have no need for financial services and often feel excluded from the conversation.

Those from lower-income backgrounds are also less likely to have the required documentation for various financial services. Not only that but many low-income individuals have not been taught about financial services in the same way that those from affluent backgrounds have.


There should also be a focus on geographic access to financial institutions. For example, the physical distance between a household and financial institutions could cause many obstacles. There are proven distance-related issues that come with financial inclusion. Households that are located nearer to relevant institutions have greater financial literacy and inclusion.

Digital financial inclusion has helped to narrow this income gap between rural and urban areas. There still needs to be more inclusion-related movements directed towards these kinds of spatial issues. Moves away from traditional financial institutions making digital transformations to individuals finding out information through the internet and social media is changing this.

While there are still gaps that contribute to a lack of financial inclusion amongst certain groups, there have been changes recently which have improved this. Digital finance especially has been seen as a driving force for equality in finance amongst women, those from lower-class backgrounds, and those who have been unable to reach financial services due to location.

10 views0 comments


bottom of page