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Financial inclusion as a tool for sustainable development

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  • Marian Catalin VOICA

    () (Cybernetics, Economic Informatics, Finance and Accounting Department, Faculty of Economic Sciences, Petroleum-Gas University of Ploiesti, Ploiesti, Romania)

Abstract

Financial inclusion is one of the recent tools used by financial entities in order to provide suitable education for potential clients from groups of society that have a low level of education, in general, and almost no financial , in particular. Financial inclusion actions aim at explaining to lower educated groups of people and the mechanisms of the financial instruments that they can access in order to improve their day-to-day life. These programs are targeted towards people that are exposed to the risk of poverty and social exclusion. According to Universal Financial Access 2020, around 2 billion people from the global workforce do not use any form of financial services. As a result, the World Bank and the International Finance Corporation set the target to include 400 million adults in transactions by providing technical and financial support in the case of the World Bank and help 600 million adults to be included in investments and advisory services in the case of the International Financial Corporation. The highest impact of financial inclusion programs will be made in emerging countries with low economic literacy. As sustainable development became the highlight of nowadays agenda, financial inclusion may be viewed as an important tool to promote sustainable development in least developed countries and developing ones. As financial inclusion became a target for regulators and global development agencies, many countries around the world made commitments and some were developing national strategies to promote it. The development of financial inclusion may take on many forms, so the field is open to financial and non-financial institutions, which can innovate and explore new forms of financial services, like the case of microfinance that became very used in many developing and developed countries as a tool to lift people from poverty. Alongside with this free development space there needs to be a body to ensure consumer protection and responsible practices. Classification JEL:-G34, I22

Suggested Citation

  • Marian Catalin VOICA, 2017. "Financial inclusion as a tool for sustainable development," Romanian Journal of Economics, Institute of National Economy, vol. 44(1(53)), pages 121-129, June.
  • Handle: RePEc:ine:journl:v:44:y:2017:i:53:p:121-129
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    References listed on IDEAS

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    1. Chakravarty, Satya R. & Pal, Rupayan, 2013. "Financial inclusion in India: An axiomatic approach," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 813-837.
    2. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    3. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe & Van Oudheusden,Peter, 2015. "The Global Findex Database 2014 : measuring financial inclusion around the world," Policy Research Working Paper Series 7255, The World Bank.
    4. Swamy, Vighneswara, 2014. "Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households," World Development, Elsevier, vol. 56(C), pages 1-15.
    5. Satya R. Chakravarty & Rupayan Pal, 2010. "Measuring financial inclusion: An Axiomatic approach," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-03, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Irina Gabriela Radulescu & Mirela Clementina Panait & Madalina Albu & Mihaela Ciopi Oprea, 2015. "Is the EU Moving Towards Sustainable Development?: Changes in the Social Exclusion Area in Some European Countries," International Journal of Sustainable Economies Management (IJSEM), IGI Global, vol. 4(3), pages 49-59, July.
    7. Demirguc-Kunt, Asli & Klapper, Leora, 2012. "Measuring financial inclusion : the Global Findex Database," Policy Research Working Paper Series 6025, The World Bank.
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    More about this item

    Keywords

    financial inclusion; sustainable development; micro-finance; UFA 2020;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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