Financial Inclusion 2.0
For years, success in financial inclusion has been measured by the number of accounts opened. This focus has led to remarkable progress, with 76% of the global adult population now having access to an account. But access alone isn’t enough. The real opportunity to advance development goals lies in harnessing this achievement to improve lives, strengthen resilience, and foster economic growth.
Some regions, particularly Sub-Saharan Africa and Middle East and North Africa, still face challenges with lower account ownership and significant gender gaps. For these regions, access is still a first critical step. However, to drive meaningful progress, we must go beyond that first step and ensure that access leads to tangible outcomes.
CGAP launched the Financial Inclusion 2.0 initiative to catalyze the sector to focus on outcomes. This shift is at the heart of CGAP’s strategic objectives for FY24 – FY28 which aim to foster responsible and inclusive financial ecosystems that contribute to a green, resilient, and equitable world for all. CGAP is working to ensure that financial inclusion enhances agency, resilience, and opportunities. Ultimately, financial inclusion supports key development outcomes, including women's economic empowerment, job creation and entrepreneurship, and access to essential services such as electricity, clean water, and education. Financial inclusion also contributes to more effective climate action, poverty reduction, and broader economic stability and growth.
Delivering on this vision requires collaboration and leadership, which is why the Financial Inclusion 2.0 initiative is supported by a senior-level Champion Group. This group brings together public and private sector representatives from across the inclusive finance ecosystem to help guide this ambitious outcomes-focused agenda.
While we know that financial inclusion is a key enabler for a range of development goals, research shows that outcomes vary widely depending on factors like product design and delivery, customer demographics, and local context including regulations and social norms.
Despite the growing body of evidence, significant gaps remain in understanding why financial services drive positive change in some scenarios but not others. This lack of insights hampers donors, investors, policymakers, and financial service providers from designing interventions that maximize benefits for underserved populations.
Financial Inclusion 2.0 aims to bridge these gaps. By curating existing evidence and generating new methods and insights, this initiative empowers stakeholders to better understand when and how financial services contribute to meaningful development outcomes. These outcomes include climate action, job creation, women’s economic empowerment, and economic growth.
The Financial Inclusion 2.0 initiative consists of three interconnected components:
Beyond research, Financial Inclusion 2.0 actively engages funders, financial service providers, and policymakers to ensure that insights from this work are applied in practice. Through partnerships, advocacy, and practical tools, the initiative equips the sector with the knowledge needed to design more effective, outcome-driven
Financial inclusion has a key role to play as an enabler for development outcomes and as a foundational element to improve livelihoods and build resilience in an ever more vulnerable and turbulent world.
Despite extensive research, the financial inclusion sector still lacks a clear understanding of what works, when, and for whom. Financial services' impact varies widely, highlighting the need for new research and more nuanced insights.
Indicators help track progress across populations and evaluate financial service impacts. To justify their high cost, it's crucial to define their capabilities and limitations in addressing geographic and demographic variations.
As conversations about financial inclusion evolve, we’re asking bigger questions. How can it enhance women’s economic empowerment? Help tackle climate challenges? Bring informal entrepreneurs into the digital economy and create jobs? While there’s growing enthusiasm, not everyone is convinced. Microcredit, for example, has faced criticism, with some arguing it hasn’t lived up to expectations or has even done harm. But these debates often rely on selective or anecdotal evidence, making it hard to get a clear picture.
That’s where the Impact Pathfinder comes in. Developed by CGAP in collaboration with Dalberg, this interactive platform makes it easier to access and understand the existing research on financial inclusion. It’s designed to help decision-makers, such as donors, investors, policymakers, and financial service providers, make informed choices based on what the evidence actually shows.
Th Impact Pathfinder, an evidence platform designed to shed light on the impact of financial inclusion on development. By leveraging existing research, this platform outlines pathways that show how financial services and products can contribute to
CGAP, in partnership with Dalberg, has developed the Impact Pathfinder as part of a new outcome agenda for the financial inclusion community. The Impact Pathfinder makes existing evidence on financial inclusion more accessible and actionable.
Drawing on evidence to examine how financial services can advance climate action and other development outcomes, CGAP's Impact Pathfinder is a gateway to understanding what the existing evidence tells us, and knowledge gaps that need to be filled.
Women’s financial inclusion is paramount, but how does it drive real economic empowerment? CGAP's Impact Pathfinder maps what we know—and what we don’t—about credit, savings, digital payments, and insurance for women.
As the sector shifts its focus from simply providing access to financial services toward understanding and improving customer outcomes, financial health and well-being – increasingly used interchangeably and seen as a single concept – have gained significant attention in the financial inclusion sector in the past few years. CGAP has contributed to efforts to develop a conceptual framework that will help stakeholders better understand the concept, the factors that can influence it, and ultimately to measure progress. This coincides with a new mandate for Her Majesty Queen Máxima of the Netherlands, the United Nations Secretary-General’s Special Advocate, focused on financial health.
CGAP’s research highlights financial health’s important role as a steppingstone to broader, longer-term development outcomes. For instance, CGAP’s Impact Pathfinder features elements of financial health within its impact pathway model. Further, going forward, CGAP will continue to contribute to the financial health agenda by exploring how national financial authorities can measure financial health, in close collaboration with the Office of the UNSGSA.
The GPFI’s 2024 G20 Policy Note on Financial Well-Being offers a clear framework for linking financial inclusion to meaningful outcomes. It highlights how financial policies, consumer protection, and digital innovation can drive progress, shaping lives far beyond access to services.
Global financial health measurement varies, reflecting the need for widely applicable guidelines to make sure financial health measurement provides relevant insights. We outline three principles to help refine approaches and improve insights.
Related CGAP Work on the Impact of Financial Services
Financial Inclusion 2.0 builds on CGAP’s earlier efforts to explore the impact of financial inclusion, identifying key knowledge gaps and unanswered questions that we are now addressing. The publications below reflect those foundational efforts.
Recent research on the impact of financial services on the lives of low-income people tend to focus on microcredit or a single financial product. Recognizing the need for a more nuanced and clearer impact narrative, this Focus Note synthesizes evidence since 2014.
The global development community has debated the question of how financial services impact the lives of poor people for decades. Recently, CGAP has developed a theory of change to guide the financial inclusion community toward an updated narrative that shows the many ways financial services can impact the lives of poor people.
CGAP has created a nuanced and clear impact narrative. This video showcases the potential pathways through which the use of financial services helps poor people build resilience and seize opportunities.
The financial inclusion community is renewing its efforts to understand the role financial services play in the lives of poor people and how financial services can improve their well-being. This paper proposes a learning agenda based on extensive consultation with donors, researchers, and practitioners who support financial inclusion.
Whether and how financial services improve the lives of low-income people remains the subject of intense debate despite decades of evidence-gathering. The evidence to date appears mixed and often contradictory. As a result, different factions in the international development
This paper proposes that the accumulating body of evidence supports policy makers’ assessments that developing inclusive financial systems is an important component for economic and social progress on the development agenda.
