The objective of this policy guide is to provide policymakers and programme designers with an up-todate
view of what needs to be done to include the poorest people in financial services, and by doing so
make a dent in their poverty. It does not attempt to be a comprehensive guide to pro-poor financial
services; rather, it selects savings and insurance as two aspects of financial services that are most
likely to build poor people’s resilience in the face of the multiple risks they face – a necessary precursor
to any investments they might make to get out of poverty. The guide highlights four promising ways
forward for policies and interventions that aim to include the poorest faster than would otherwise be the
case – by linking informal and formal financial services, linking social protection with financial services,
making maximum use of the digital revolution and promoting weather-based insurance. The guide does
not cover credit and microfinance, on which there is already an ample literature, and where the evidence
on impacts on the poor is mixed.
A brief analysis of panel household survey and other data tells us formal financial services (savings and
insurance) – other than mobile phone-based payments – do not feature strongly in escaping poverty,
or sustaining escapes. The overwhelming result is that chronically poor people and other poor or
vulnerable people either do not have access to or do not use these formal financial services. There is
thus a long way to go to financial inclusion that makes a direct impact on the eradication of poverty. The
poor are increasingly making use of mobile phone-based payments systems to send and receive
remittances, on the other hand, and this has a positive impact on resilience. Microfinance has taught
us that credit can help people escape poverty or prevent them falling into poverty, but does not always
do so – and that credit can also ‘kill’. And that specific measures are needed to bring the poorest people
to a position where they can make good use of credit. These mixed findings have led to today’s much
more rounded policy interest in financial services as a whole.
The guide highlights four promising avenues for financial services initiatives to include the poorest
people. The evidence on the first three of these suggests the promise is real; on the fourth there is
potential but still much to prove.