Why you should care about financial inclusion
Starting Monday 30th October for one week, people all over the world are going to celebrate Financial inclusion. According to Center for Financial Inclusion the focus will be on exploring how new financial products and partnerships are empowering customers. While all of this is going on, I imagine the first question anybody would ask, as I often do, is this: Honestly, why should I care about financial inclusion? Here are 4 reasons why:
- Facilitates fast, secure, remote payments
Sara is an 8 to 5 office desk worker. She gets worried when her aunt in the village calls to say that her uncle is in the hospital, needing urgent medical attention. Without 100,000 shillings for tests, her aunt tells her, there’s nothing to be done. Sara is relieved when she remembers that just outside her office, is a mobile money agent. She borrows 50,000 from her colleague to add to the 50,000 in her wallet. She runs down to the agent, who luckily that day has mobile money to sell, and sends it to her. In less than 30 minutes she’s resolved an emergency whose consequences, she imagines, could have been dire.
- Provides a safe, secure, liquid store for your savings
The tests are done, her uncle needs to be admitted into the hospital. More money is needed for the immediate expenses like transportation back home to pack bedsheets, basins and the like, that will be needed in hospital. Her aunt sells charcoal in the trading center. All the money she makes goes into buying more charcoal to grow the business. With the profit she’s made over time, her aunt managed to save and buy 2 cows. Hesitant to call Sara again, she asks her neighbor in the market if she can buy one of the cows. The neighbor, who also sells charcoal, has no interest in buying the cow at that time but proposes to buy Sara’s stock at a lower market price.
- Provides protection from financial loss when things go wrong
Sadly, the uncle doesn’t make it. After two surgical interventions whose objectives are unclear to Sara and the rest of the family, all they can think about are the medical bills from the 2 weeks stay in hospital and the funeral expenses. They have a quick meeting, manage to raise enough to cover the hospital bills, but tone down the funeral ceremony. No funeral services management company, no engraved casket. No one voices their disappointment but they all feel it.
- Provides credit to start your business
They are trying, two months after the funeral, to go back to their daily lives. Sara visits her aunt to see how she’s doing. Her aunt needs money to restart her charcoal business. To meet other expenses that cropped up after her husband’s death, she sold the remaining stock and used the proceeds. Though the family helps with some of Sara’s cousins’ school fees, her aunt still needs to meet the other expenses at home. Her business was doing well before the tragedy so she is sure that if she’s able to raise enough money to start again, she will not have to rely so much on her relatives. She’s even willing to borrow to fund the business, but outside her network of relatives, who also have their own needs, she’s not able to get credit without a land title.
Unfortunately, or fortunately, money enables almost everything that we do today. We are all trying, in the first place, to survive. However, we don’t stop there, we want to graduate to a better standard of living. Financial inclusion, through the provision of secure, reliable and convenient payment, savings, insurance and credit services, can help in achieving this. Given the poverty statistics in the National Household Survey report recently released by Uganda Bureau of Statistics, everyone is, to a certain degree a Sara, her aunt, or worse, uncle. Because we live in a society, what affects one person ultimately affects us all. We should care that everyone is able to access affordable financial services.
By Renita Nabisubi
Head Innovations and Financial Services Pillar