Financial Inclusion

Affordable financial products and services—such as transactions, payments, savings, credit and insurance—help people manage risks, build wealth and invest in businesses. Financial inclusion means that individuals and businesses have access to and use affordable financial products and services that meet their needs, which are delivered in a responsible and sustainable way. Financial inclusion is a catalyst for achieving seven of the 17 Sustainable Development Goals (SDGs). It fosters economic growth and employment, promotes economic empowerment of women, and contributes to eliminating poverty.

Financial inclusion supports entrepreneurship and business growth. Access to credit and capital, secure savings, and efficient payment services enable small businesses to expand, create jobs, and drive economic development. Access to insurance enhances resilience by offering protection against unforeseen risks and financial shocks providing individuals with peace of mind and allowing entrepreneurs to undertake ventures with greater confidence. By bringing more people and enterprises into the formal economy, financial inclusion strengthens economic activity, boosts productivity, and lays the foundation for inclusive and sustainable economic growth.

Financial inclusion empowers women. By reducing barriers to economic participation, financial services equip women with tools and resources to start and grow businesses, manage household finances, and invest in their futures. This strengthens their voice in decisions affecting them  and narrows gender gaps in financial access, promoting broader social and economic equality.

Financial inclusion helps build resilience for people and businesses vulnerable to climate change and natural disasters. Over 80% of the world's 1.4 billion adults without financial accounts reside in places at risk from climate, intensifying their susceptibility to economic and environmental shocks. Financial services enable individuals and businesses to invest in climate-resilient infrastructure, adopt sustainable agricultural practices, and implement energy-efficient technologies, thereby contributing to climate mitigation. Moreover, availability of insurance and savings products speed recovery from environmental shocks.

Challenge Ahead

Transaction accounts enable people to securely store funds and efficiently conduct transactions and are typically the first step to use of other financial services. The expansion of digital financial services has helped decrease he number of adults without access to an account from 2.5 billion in 2011 to 1.4 billion in 2021, with 76% of the global adult population owning an account by 2021. Despite these advancements, challenges persist. This disparity in account ownership between low- and high-income countries underscores the need for continued efforts to bridge the financial inclusion gap and ensure equitable access to financial services worldwide.

Between 2017 and 2021, the gender gap in account ownership in developing countries narrowed from 9 to 6 percentage points. Despite these advancements, the persistent disparity continues to impede women's ability to fully manage their financial lives. Early indications suggest that mobile money accounts are playing a role in bridging this gap across various nations. The adoption of mobile money in Sub-Saharan Africa has contributed to the general increase of access and has been successful in closing the gender gap in financial inclusion. In October 2024, we unveiled our Gender Strategy 2024-2030, setting ambitious goals to boost economic opportunities for women by 2030, including to facilitate capital for 80 million more women and women-led businesses.

For countries where 80% or more of the population holds accounts—such as China, Kenya, India, and Thailand—the next frontier is transitioning from access to active usage of a broader range of financial services.  Between 2011 and 2021, savings increased globally, yet the gap between advanced economies and the developing ones widened, with savings rates at 58% and 25%, respectively. Similarly, while borrowing also saw improvement, the divide remains pronounced, with rates of 56% in AEs compared to 23% in EMDEs.

Small businesses also face a substantial and growing financing gap, estimated at $5.7 trillion, equivalent to 19% of GDP, or 1.5 times the current supply of funding. This shortfall affects 40% of formal Micro-, Small- and Medium-sized enterprises (SMEs) in these regions, leaving their financing needs unmet. When informal enterprises are considered, the gap widens further. MSMEs are vital to economic growth, making up more than 50% of employment in these regions. However, limited access to finance restricts their ability to expand operations, invest in new technologies, and enhance productivity. Closing the persistent finance gap will help boost productivity, drive long-term growth, and create more and better jobs in EMDEs.

Since 2010, more than 60 nations either launched or developed National Financial Inclusion Strategies, uniting diverse stakeholders to coordinate efforts, including financial regulators, ministries of telecommunications, competition, agriculture, environment and education. Countries achieving significant progress have implemented large-scale policies, such as India's Aadhaar initiative, which has provided over 1.2 billion residents with universal digital identification, facilitating the opening of Jan Dhan Yojana (JDY) accounts. Leveraging government payments has also been instrumental; for instance, 35% of adults in low-income countries who received government payments opened their first financial account for this purpose.

In fostering uptake and market development of financial products and services, policymakers must address the range of risks financial consumers may face, and to be responsive to new and changed consumer issues from innovative products and providers. Effective financial consumer protection regulation and market conduct supervision assists in ensuring that uptake and usage of financial products and services is beneficial to consumers. As highlighted in the most recent World Bank Global Financial Inclusion and Financial Consumer Protection Survey (2022), international good practice and trends clearly show the importance for a country to have a regulatory framework and supervision addressing financial consumer and market conduct issues.

The World Bank actively collaborates with the G20 to advance financial inclusion worldwide and advocates for implementation of the G20 High-Level Principles for Digital Financial Inclusion. Additionally, the G20 has endorsed the G20/OECD High-Level Principles on SME Financing, which support efforts to enhance access to a diverse range of financing instruments for small and medium-sized enterprises, including micro-enterprises and entrepreneurs. Through this partnership, the World Bank and the G20 strive to ensure that all individuals and businesses have access to affordable and effective financial services, fostering inclusive economic growth and development.

Last Updated: Jan 27, 2025

The World Bank advances financial inclusion through its financial sector expertise, country engagement and dialogue, financing and risk-sharing instruments, unique datasets and research capacity, and influence with standard-setting bodies and the G20. We focus on:

• Advancing Policy and Regulatory Frameworks to create conditions for a responsible and versatile offer of financial products and private sector investments;
• Building Financial Infrastructure such as modern payment systems, credit information or secured transactions frameworks and promoting Digital Financial Services to enhance efficiency of financial sectors and improve overall productivity gains for financial service providers, individuals, and businesses;
• Creating markets, structures and channels for investments and de-risking mechanisms to facilitate mobilization of private capital to drive growth in financial inclusion; and 
• Mainstreaming innovations including those that harness digital technologies to address the supply and demand side constraints to financial inclusion.

We work with governments, the private sector, development partners, international organizations, multilateral development banks, and standard-setting bodies to deliver:

• Financing support to client countries through loans, credits, guarantees, and risk management products;
• Advisory services including targeted policy support, strategic technical assistance, and capacity building;
• Analytics, innovative knowledge products and data, providing actionable insights, tools, and thought leadership, including by applying specific gender and sustainability lens during diagnostics; and
• Global engagement, collaboration and contribution to standard-setting bodies such as G20 in shaping and formulating good policies supporting financial inclusion of individuals and small businesses, as well as global convening. 

We have developed an integrated approach under the Financial Inclusion and Infrastructure program focused on supporting financial authorities and stakeholders to improve conditions and implement enablers for financial inclusion of individuals and Micro, Medium and Small Sized Enterprises (MSMEs). The program comprises the following key areas of work:

Financial inclusion strategy, policies and regulations: This area focuses on (i) the design of national financial inclusion strategies  (ii) financial inclusion measurement and evaluation frameworks; (iii) building implementation capacity and tools,  (iv) supporting targeted legal and regulatory reforms and market interventions and (v) formulation of international standards through G20 and other relevant standard setting bodies. This area also supports authorities in designing tools and mechanisms for more effective and well-coordinated financial capability and literacy interventions.

Financial consumer protection and market conduct regulation and supervision: This area focuses on: (i) financial consumer protection and market conduct regulatory policy and legal frameworks that address the range of key financial consumer risks and are responsive to innovative products and providers; (ii) implementation of effective and efficient market conduct supervision institutions, processes and tools, including suptech tools; (iii) development and operationalization of financial consumer alternative dispute resolution mechanism such as financial sector ombudsmen and (iv) formulation of international standards and guidance through the World Bank’s own publications and through bodies such as the G20/OECD Financial Consumer Protection Task Force and FinCoNet and other relevant organizations.

MSME access to finance policies, infrastructure and products: This area focuses on: (i) creation and strengthening of essential credit infrastructure; (ii) enacting risk-based regulatory frameworks to facilitate development of alternative credit providers; (iii) introduction of legal frameworks underpinning development of innovative financial products;  (iv) design of supportive public sector financial policies and initiatives and (v) formulation of international standards through G20, SME Finance Forum and other relevant standard setting bodies.

Payment systems:  This area focuses on: (i) development of payments systems strategies and formulation of reforms; (ii) establishment of appropriate institutional arrangements for central banks/other regulators for steering national payments system development; (iii) implementation of specific payment system components; (iv) formulation of international standards related to payment systems alongside other standard setting bodies. The work of the World Bank in this are emphasizes the safety and efficiency of payments, payment aspects of financial inclusion, digitalization of government payments and innovative payment services.

Credit information systems: This area focuses on: (i) establishing comprehensive legal and regulatory frameworks to govern credit information systems, ensuring clarity and compliance across jurisdictions.; (ii) supporting the development and enhancement of credit bureaus to facilitate efficient collection and dissemination of credit data; (iii) assisting with advanced data analysis techniques to improve credit assessment and risk management; (iv) piloting programs that focus on gender-disaggregated data to address disparities and promote inclusive access to credit and (v) formulating international standards related to data protection and credit information sharing to ensure consistency and security in global financial practices.

Insolvency and debt resolution: This area focuses on (i) development of effective corporate and household insolvency systems including early warning systems, workout regimes, alternative dispute resolution frameworks, secured transactions systems, and enforcement laws, and (ii) introduction of debt resolution mechanisms, including contract and collateral enforcement tools. The World Bank is designated by the Financial Stability Board as the global co-standard setter for Insolvency and Creditor/Debtor Regimes.

Financial Inclusion is also embedded across other World Bank initiatives and financing operations. In addition to advisory services, analytics and global engagement the program also provides active support to other World Bank initiatives helping to integrate financial inclusion into key sectors, such as social protection, agriculture, climate finance.

World Bank has an active portfolio of over 100 financing operations to support national authorities to improve financial inclusion. These operations span various sectors to include relevant financial inclusion interventions into agricultural development, disbursement of social protection benefits, supporting climate resiliency, or enabling access to energy. In addition, World Bank provides technical assistance through guidance, data, analytics and research to enable more effective national policy, regulatory and supervisory frameworks. World Bank’s active portfolio contributed to 6.8 million people and businesses (~3 million of which are women and women-led businesses) using financial services in 2024 and is expected to contribute another 8.8 million (~4.2 million of which are women and women-led businesses) in the next few years, with additional projects in the pipeline and in design phase.  Overall, World Bank has worked over 100 developing countries in improving financial inclusion.

Country Examples:

In India, a $300 million project to scale up access to sustainable microfinance services to the financially excluded was implemented during 2010-15. The project supported a national development bank (Small Industries Development Bank of India) make investments (sub-debt and equity) in viable microfinance institutions that committed to sound practices. One such equity investment enabled transformation of a microfinance institution from an NGO to a non-bank finance company (and then a listed bank), and later opened the doors for IFC and multiple global equity funds investment.

In Jordan, the authorities worked on establishing an "Innovative Startups and SMEs Fund", (ISSP) a $98 million "fund of funds," with $50 million sourced from a World Bank loan. ISSF invested in private funds supporting startups and SMEs and made direct co-investments in SMEs. Non-financial support included investment readiness programs, incubator support, and building a network of angel investors. By 2022, the ISSF had mobilized $78 million, engaged 17 institutional investors (with most global investors being impact investors and DFIs), and financed 123 companies, 25% being women-led, creating 1,700 jobs.

World Bank approved a $155 million loan in 2023 to support the greening of firms through equity financing in Türkiye. The funds will be used to partially capitalize a Türkiye Green Fund (TGF). The TGF will provide equity financing to green and greening companies. The project’s total size is expected to reach $405 million by mobilizing private capital in the amount of a combined $250 million at fund level and investee level in addition to the World Bank loan.

The Kenya Jobs and Economic Transformation Project (KJET) started in December 2023 with an aim to benefit more than 45,000 Kenyans through new or improved job prospects. One of the components of this project is for scaling up green SME financing, which will mobilize green private capital to support SMEs’ adoption of green technologies. This will be through financing Kenya Development Corporation (KDC) via capitalization support to invest in a dedicated newly established Green Investment Fund (GIF) as a limited partner, to provide an initial risk-adjusted, long-term, patient capital, including equity and mezzanine financing. The fund will mobilize private capital in addition to the World Bank funding.

World Bank supported the Government of Mexico in implementing reforms to narrow the gender gap for financial access in Mexico. At 8 percentage points in 2017, the gender gap had been slow to improve, especially when compared with other Latin American and Caribbean (LAC) and OECD countries. The Government enacted the Credit Institutions Law, enabling minors (ages 15-17 years): (i) to open a bank savings account; and (ii) manage the funds without adult representation to receive wage payments and electronic transfers from government and social programs through this account, allowing for the greater reach of women. To expand women’s access to productive financing towards a robust economic recovery, the law also mandated prioritization of projects targeting the financial needs of women and gender parity in state development banks’ corporate governance structure. These actions led to the number of minors with bank accounts increasing to 4.3 million, well exceeding the target of one million. 52 percent of these minors were women, as compared to the target of 50 percent. The percentage of women benefitting from state development bank financial access programs also greatly improved, from a baseline of 46 percent in March 2020 to 74 percent in 2021, well beyond the project’s target of 60 percent.

In Djibouti, Ethiopia, Kenya and Somalia, a World Bank project has been working to enable the region to adapt to the impacts of client change, commercialize livestock production in pastoralist communities and ensure inclusion of the marginalized and vulnerable groups. In doing so, the project is contributing to financial inclusion of 1.6 million pastoralists.

World Bank has been supporting the microfinance sector in Afghanistan, focusing on women's financial inclusion. The project aims to revitalize microfinance providers in Afghanistan through recapitalization support and alongside an offering of technical assistance to diversify products and operational efficiency. Additional focus is on creating a pipeline of bankable micro and small enterprises, including women-led businesses, through business development services and a credit viability fund, to connect them to the regulated financial system.

In Ethiopia, World Bank provided technical assistance to the authorities to support regulatory reforms to enable foreign direct investment in telecom and financial services; and new business models (mobile money) and wider use of digital financial services for government service delivery. As a result, mobile money account ownership grew 10-fold in 5 years (from 2 to 20 million). In addition, disbursements of social benefit transfers into mobile money accounts enabled more than 2 million women for the first time in their lives able to save and make & receive payments digitally.

The World Bank has undertaken a wide range of technical assistance activities to support governments in implementing effective and appropriate financial consumer protection (FCP) regulation and market conduct (MC) supervision. World Bank operations have also repeatedly supported implementation of financial consumer protection and market conduct reforms. In Ethiopia and Rwanda, among other countries, the World Bank supported reforms to address the lack of a comprehensive FCP regulatory framework to address issues regarding transparency and disclosure, fair consumer treatment and provider business conduct. The World Bank has also supported implementation of dedicated MC supervision functions.

The World Bank Group works globally with standard-setting bodies to develop guidelines, standards and good practices. We also work with the G20 to develop guidance for regulators and policymakers and to catalyze new actions in support of financial inclusion. We are also an implementing partner for the G20 Global Partnership for Financial Inclusion (GPFI).

We also work closely with a number organizations and donor partners to advance financial inclusion, including Alliance for Financial Inclusion (AFI), AusAid, the Bill and Melinda Gates Foundation, DFID, Financial Sector Development Trusts, GIZ, the Ministry of Foreign Affairs of the Netherlands, the OECD, SECO, UNCDF, UNCITRAL, UNSGSA, USAID, and regional development banks.