Economic growth and development requires that a large part of the population is involved in economic activities as well as financially included.
For this to be effective, the population must access financial services and products which ensure that households and businesses irrespective of income levels have access to and can effectively use the appropriate financial facilities they need to improve their lives and further their savings and investments.
When the population gets access to finance, deposits increase and banks will have enough deposits and through credit creation which makes money available for lending increases economic activities.
Financial inclusion should provide access to finances and other financial products to business and individuals so that they make use of them and these should be provided in a way that they are sustainable.
The benefits of financial inclusion are far reaching and when sustained they lead to community progress.
Financial inclusion enables in the reduction of the gap between rich and poor population. In the current scenario financial institutions are the robust pillars of progress, economic growth and development of the economies.
Making day-to-day transactions possible and keeping records of purchases and sales of daily transactions. When different people access funds different transactions shall be created therefore there shall be need to keep records for those transactions and this will help those owners of the business invest in assets and grow their business thus creating jobs for different stakeholders.
Through financial inclusion many people will access funds to invest in their future through education of their families.
Financial inclusion through access to accounts and other financial products, savings, mobile money systems and payment systems enables potential and empowers men, women and whole communities.
This, in turn, promotes investment within the community provides jobs and in reality shows that employment boosts status, income and ones outlook on life.
Collectively this helps to invigorate economies. It also promotes equality both within the community and within families thus reducing the gap between the rich and the poor through poverty reduction.
When people get access to financial facilities they are capable of obtaining credit facilities to facilitate their economic activities. Also with credit the population become capable of running activities that lead them to investments and savings.
Furthermore, with financial inclusion people become capable of securing funds to carry out insurance activities like medical, life insurance for families and for businesses. With availability of finances people are capable of insuring their industrial, agricultural outputs and also insurance for other businesses.
To achieve the element of financial inclusion in different societies, the public should be encouraged to invest in small and medium enterprises (SMEs) because this is the economic sector where most of the population would be accounted for and that large part of the population that has reached the age of work get involved in economic activities.
Though there is need for financial inclusion, in most developing economies there are limitations that hamper accessibility to finances. Elements like limited finances, high illiteracy rate, and remoteness of a big part of the population also high interest rates limit financial inclusion.
Therefore there is need to further educate populations about money management facts, how to increase their savings and investments. Also creation of awareness to the population when and where funds can be accessed and further infrastructure development.
The writer is an accountant based in Kigali, Rwanda.