Facing up to the political realities of financial inclusion

OPM authors/contact
Richard Williams
Type
OPM Briefing Note
Date
October 2013

Financial inclusion is rising rapidly up the policy agenda but there is a tension between donors’ pursuit of ‘best practice’ institutional and policy reforms that are intended to develop market-based financial systems, and governments’ more direct ‘activist’ interventions, such as offering loans to the poor with preferential interest rates. This Briefing Note argues that donors need to adopt a more pragmatic approach, rooted in the political economy of individual countries. Without this their efforts are likely to be doomed from the start, with their proposed inclusion policies left on a shelf, or regulation distorted or circumvented.

Susan Johnson