Financial inclusion has been hailed as an important tool for reducing poverty and promoting economic growth.
There is a growing recognition that it may not necessarily translate into social acceptance, particularly in societies where discrimination based on gender, race, ethnicity, and socioeconomic status persists. In fact, some argue that financial inclusion can lead to a false sense of equality, where individuals are given access to basic services but remain excluded from full participation in society due to structural barriers such as limited employment opportunities and lack of political representation.
One example of this is India's Jan Dhan Yojana program, which aimed to provide bank accounts to millions of people who had never accessed formal financial services before. While the initiative was lauded for bringing more people into the financial system, many have questioned whether it has truly led to greater equality. Some say that while these new account holders now have access to credit, they still face significant challenges when it comes to finding jobs or engaging in other forms of economic activity due to their backgrounds. Others point out that even if they do find work, they are often paid less than those from higher castes or with more education.
Another potential issue is that financial inclusion can create tensions within communities, particularly among women.
Research suggests that microfinance loans can increase domestic violence rates if husbands feel threatened by their wives' increased autonomy. Similarly, providing financial services without addressing underlying cultural attitudes towards women's roles in society may lead to resentment and further marginalization.
There are examples of successful programs that go beyond merely giving access to financial services to promote true social integration. One such program is Bangladesh's Grameen Bank, which provides small loans to impoverished groups like rural women and farmers. The bank also offers a range of services including healthcare and education, helping to break down barriers to participation in society beyond just finances.
Creating an inclusive society requires much more than simply expanding access to basic financial services. It involves tackling structural issues such as discrimination, inequality, and lack of opportunity head-on. By doing so, we can ensure that all members of our societies are able to fully participate in the economy and enjoy equal rights and dignity.
Does financial inclusion translate into social acceptance, or merely tolerance without equality?
Financial inclusion can be defined as the ability of individuals and households to access and manage a range of appropriate financial products and services that meet their needs, including savings, payments, credit, insurance, and fund transfer services, in a responsible and sustainable manner that enables them to improve their living standards and actively participate in the economy (Porter et al. , 2015).