Financial Inclusion, Poverty Reduction and the Millennium Development Goals

Although the chosen and conventional approaches to tackling poverty and other millennium development goals (MDGs) are useful and necessary, they are not sufficient to address the challenge. Financial inclusion (FI) offers incremental and complementary solutions to tackle poverty, to promote inclusive development and to address the MDGs. This treatise is advanced in the following ways: (i) based on the FI-poverty reduction (PR)-MDG nexus, and supported by field research and related literature, the key pillars of FI are outlined; (ii) several international cases are discussed to extract lessons learned; and (iii) explanatory FI models are presented. Given the current global financial crisis, the need to scale-up FI efforts is now more imperative than at any other time in recent history. This paper also offers potentially useful approaches to planning, policy-making and programming in order to strengthen the FI-PR-MDG nexus.