Advancing social and economic goals with global financial inclusion

Deloitte’s Financial Inclusion Framework

Companies and investors are beginning to recognize the social and financial opportunities inherent in financial inclusion and are acknowledging the long-term value in the pursuit of a higher bottom line. In our new report, we take a deep dive into the offerings pillar of our Financial Inclusion Framework, exploring lessons learned from a project that sought to identify inclusive and profitable financial offerings. The four pillars of our Financial Inclusion Framework include:

• Ecosystem – vendors, partners, and public platforms
• Community – local footprint
• Offerings – products and services
• Organization – workforce and sales strategies

But can an institution’s pursuit of financial inclusion promise both purpose and profits?

Market opportunity and women-led businesses

One of the areas that have the greatest long-term value for financial institutions and investors is serving women and, in particular, women-led businesses. According to the World Bank and the SME Finance Forum, the unmet financing need of women-led businesses around the globe is more than $1.5 trillion. Despite its attractive scale, this market remains surprisingly nascent. With more than 1.1 billion women and 70% of women-led small businesses still unbanked globally, this gender gap has been persistently difficult to close due to a combination of cultural, legislative, or technological barriers.

Even in the United States, women’s access to finance still falls short compared with men: As of August 2020, just 28% of women were financially healthy, compared with 40% of men. Among business owners, the gap is also significant. For example, recent research found that the average size loan for women-owned businesses was 31% less than for comparable male-owned businesses.

What do we gain from global financial inclusion?

Innovative finance providers are creating access and opportunity for previously underserved and non-served markets while exceeding investors’ profit expectations. So, what can we gain from working together toward global financial inclusion? Even the most basic financial products can translate to meaningful benefits for marginalized communities. Checking and savings accounts create pathways for wealth accumulation and income smoothing. Insurance products offer security and support in the face of unpredictable life events. Small-value loans buoy consumer demand and propel business and economic growth.

In short, broad financial inclusion helps individuals, households, and businesses achieve an improved quality of life, economic growth, and resilience. With the right environment, innovation, and technological support, financial inclusion can also lead to substantial profit opportunities for financial service providers and investors.

To learn more about our study, the pillars of Deloitte’s Financial Inclusion Framework, and the many benefits of global financial inclusion, download the full report.