Publication: Financial Inclusion: Lessons from World Bank Group Experience, Fiscal Years 2014–22
Loading...
Files
675 downloads
177 downloads
40 downloads
Date
2023-08-28
ISSN
Published
2023-08-28
Author(s)
Editor(s)
Abstract
This evaluation explores how and with what effect the World Bank Group has supported financial inclusion for the microenterprises, poor households, women, and other excluded groups. Financial inclusion is defined as the use of financial services by individuals and firms. It encompasses financial access—owning an account—and the use of financial services. There has been an impressive growth in account ownership globally, from 55% of adults in 2014 to 71% in 2021, although usage is more limited as some accounts are inactive. Critically, both financial access and the use of financial services remain major challenges for microenterprises, poor households, women, and other excluded groups. The objective of the evaluation is to assess whether the Bank Group has been doing the right things and whether it has been doing things right on financial inclusion. The evaluation captures lessons from the World Bank’s experience supporting financial inclusion for microenterprises, poor households, women, and other excluded groups and updates a 2015 financial inclusion evaluation. The evaluation includes a retrospective look at the drive for universal financial access and examines progress and challenges in women’s access to financial services. The evaluation also assesses the Bank Group’s support for digital financial services as vehicles for financial inclusion. Finally, the report examines the World Bank’s response to COVID-19 as it relates to financial inclusion. The evaluation proposes three recommendations: (i) The World Bank and IFC should further encourage account use by underserved groups, including women and rural poor people, and emphasize this more in their strategies and projects. (ii) The World Bank and IFC should design and implement more comprehensive approaches that address constraints in the enabling environment for DFS to reach underserved and excluded groups. (iii) To enhance learning on what works to increase the beneficial use of financial services at the MPWEG, the World Bank and IFC should collect outcome data across different underserved and excluded groups, initially on a pilot basis.
Link to Data Set
Citation
“Independent Evaluation Group. 2023. Financial Inclusion: Lessons from World Bank Group Experience, Fiscal Years 2014–22. © World Bank Group. http://hdl.handle.net/10986/40282 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Financial Inclusion - A Foothold on the Ladder toward Prosperity?(World Bank, Washington, DC, 2015-06-29)Access to financial services has long been believed to lift people out of poverty by allowing them to seize economic opportunities and increase their welfare. Despite rapid progress of 700 million people gaining access to formal financial services, 2 billion remain excluded. Financial inclusion -- access by poor families and microenterprises to financial services -- has been an objective of the World Bank Group for a long time, reaffirmed in 2013 by President Jim Kim’s commitment to the Universal Access Goal by 2020. This evaluation examines the relevance and effectiveness of seven years (FY07-13) of World Bank Group support to financial inclusion and its impact on the poor. It found that the World Bank Group contributed significantly to progress in financial inclusion globally and in client countries. It has “reached” a substantial share of the microfinance industry. Its support is strategically aligned with countries’ needs, focusing primarily on countries with low inclusion rates and addressing development priorities. The Bank Group has also contributed to the sustainability of microfinance services. Yet the Bank Group’s approach to identify and tackle constraints to financial inclusion at the country level is not sufficiently comprehensive. This is of particular concern for areas that are not subject to prudential regulations, like mobile money and rural savings and credit cooperatives. Even though the Bank Group was able to leverage its impact through international partnerships, these bear costs and risks and often lack results frameworks. But most importantly, the commitment to the Universal Access Goal and the resulting “push” for enabling access to financial services through transaction accounts may create a bias for driving up sheer access numbers. This may be problematic for several reasons: (i) access does not necessarily lead to inclusion, given high dormancy rates of newly created accounts; (ii) the link between access to finance and poverty alleviation is neither certain nor well understood, given the evidence that, in spite of modest benefits, the promise of microfinance pulling millions out of poverty has not been fulfilled; and (iii) current trends suggest one billion people may still lack access by 2020. These remaining financially excluded will increasingly be broadly distributed across many countries and predominantly in rural areas. Providing access to them is likely to require subsidization. Striking a balance between the costs and benefits of universal inclusion and weighing these against the cost and benefits of other competing development priorities will be essential.Publication Annual Review of Development Effectiveness 2006 : Getting Results(Washington, DC: World Bank, 2006)This Annual Review of Development Effectiveness (ARDE) brings together evaluative evidence from the recent work of the Independent Evaluation Group of the World Bank to address three questions surrounding this results chain in countries, with a particular focus on the Bank's role in the chain: (a) how effectively has economic growth translated into poverty reduction in Bank-assisted countries, and what factors have affected these results? (b) what factors have led to high-quality results in areas that deliver services to the poor? (c) what measures help raise the accountability of public institutions responsible for delivering and sustaining results? The report identifies features that characterize the country experiences and assistance programs that have delivered results: (1) effective programs have a twofold focus: they emphasize both the ingredients of growth and the measures that help the poor share in the growth process; (2) they build on a realistic and well-informed assessment of the political commitment and capacity of the recipient to deliver results, and they emphasize coalition and capacity building to help attain results; (3) they combine sustained engagement with clear intermediate milestones; and (4) they emphasize improved transparency and local control of public institutions, factors that spur these institutions to deliver results.Publication Lessons from World Bank Group Responses to Past Financial Crises(World Bank, Washington, DC, 2009)A worldwide financial crisis of enormous magnitude continues to unfold rapidly. Unlike other crises in recent decades, the current episode is rooted in industrial countries' financial systems and is affecting low-income and middle-income countries (MICs) alike. Defaults on securitized sub-prime mortgages as a real estate market bubble burst led to failures or near-failures of several large financial institutions and a collapse of inter-bank and commercial paper markets. A tightening of credit, combined with declining consumer confidence, has brought on worldwide recession with growing unemployment, and many fear that the downturn will be severe and protracted. At the same time, the rapidly multiplying signs of contraction are prompting strong responses, including fiscal stimulus packages and reductions in benchmark lending rates, on the part of several of the affected developed countries. The Bank Group is well placed to help mitigate the impact of the current crisis with financing and advisory services, and its clients are already requesting increased support. A rapid, high-quality response that combines financial and advisory support can do much to ease the inevitable ramifications of the crisis. Lessons from evaluations of previous Bank Group responses to past crises can help inform the response to the current crisis in order to increase its effectiveness.Publication Improving Effectiveness and Outcomes for the Poor in Health, Nutrition, and Population : An Evaluation of World Bank Group Support since 1997(Washington, DC: World Bank, 2009)This evaluation aims to inform the implementation of the most recent the World Bank and International Finance Corporation (IFC) health, nutrition, and population (HNP) strategies to enhance the effectiveness of future support. It covers the period since fiscal year 1997 and is based on desk reviews of the portfolio, background studies, and field visits. The evaluation of the HNP support of the World Bank focuses on the effectiveness of policy dialogue, analytic work, and lending at the country level, while that of IFC focuses on the performance of health investments and advisory services before and after its 2002 health strategy. The themes it covers are drawn from the two strategies and the approaches adopted by international donors in the past decade. Independent Evaluation Group (IEG) has previously evaluated several aspects of the Bank's HNP support. IFC's support for the health sector has never been fully evaluated. Many lessons have been learned over the past decade about the successes and pitfalls of support for health reform: First, the failure to assess fully the political economy of reform and to prepare a proactive plan to address it can considerably diminish prospects for success. Political risks, the interests of key stakeholders, and the risk of complexity- issues the evaluation case studies found to be critical are often neglected in risk analysis in project appraisal documents for health reform projects. Second, reforms based on careful prior analytic work hold a greater chance of success, but analytic work does not ensure success. Third, the sequencing of reforms can improve political feasibility, reduce complexity, ensure that adequate capacity is in place, and facilitate learning. When implementation is flagging, the Bank can help preserve reform momentum with complementary programmatic lending through the Ministry of Finance, as it did in Peru and the Kyrgyz Republic. Finally, monitoring and evaluation are critical in health reform projects-to demonstrate the impact of pilot reforms to garner political support, but also because many reforms cannot work without a well-functioning management information system.Publication Inclusive Growth(World Bank, Washington, DC, 2018-10-04)Globally, although growth has lifted millions out of poverty, in many countries growth has existed in parallel with rising inequality and groups of people being left behind. Social discontent arising from the lack of inclusiveness of the growth process has sometimes led to conflicts and violence. Anchored on growth, inclusion, and sustainability, the 2013 World Bank Group Strategy promotes inclusive growth by pursuing the twin goals of eliminating absolute poverty and boosting shared prosperity. Reflecting strong concerns for equity, it embraces policies that enhance equality of opportunity and remove barriers against the often-excluded. The Independent Evaluation Group (IEG) has conducted many evaluations that have assessed World Bank Group interventions in various dimensions of growth, inclusion, and sustainability. This report extracts findings and distills lessons from all relevant IEG evaluations completed between FY09 and FY18 to shed light on the nature and results of the Bank Group’s support in key areas of inclusive growth.
Users also downloaded
Showing related downloaded files
Publication World Bank Annual Report 2024(Washington, DC: World Bank, 2024-10-25)This annual report, which covers the period from July 1, 2023, to June 30, 2024, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.Publication The Day After Tomorrow : A Handbook on the Future of Economic Policy in the Developing World(World Bank, 2010)Development economists are paid to look into the future. They ask not only how things work today, but also how a new policy, program, or project will make them work tomorrow. They view the world and history as a learning process, past and present are just inputs into thinking about what's coming. It is that appetite for a vision of the future that led us to invite some 40 development economists, most of them from the World Bank's poverty reduction and economic management network, an epicenter of the profession, to tell us what they see on the horizon of their technical disciplines and of their geographic areas of specialization. The timing could not be better. The 2008-09 global financial crises shook the ground under the conventional wisdom that had been held as true for decades. From what the role of governments should be in markets to which countries will be the engines of the world's economy, from what people need to leave poverty to what businesses need to stay competitive, it is all up for reexamination. This synthesis provides an account of what the author heard. It is not meant to be comprehensive. Instead, it picks from each chapter what is new, what is likely to change, and what will be different in the future.Publication Promoting Social Cohesion through Education : Case Studies and Tools for Using Textbooks and Curricula(Washington, DC: World Bank, 2006)Since 2003, the Civic Engagement, Empowerment, and Respect for Diversity (CEERD) program of the World Bank Institute has included a program on Education and Respect for Diversity. The program consists of a series of initiatives to promote tolerance and respect for diversity through curriculum and textbook reform and pre- and in-service teacher training. To date it has focused on ways in which Bank-financed programs can help education systems to address the needs of all students and to promote social cohesion. Activities have included information dissemination, through workshops and papers, as well as financing for pilot programs in Colombia, the Lao People's Democratic Republic, Nigeria, Romania, and Sri Lanka. These pilots are designed to put in place strategies that can be scaled up either in the pilot country or in other programs.Publication Social Dimensions of Climate Change : Equity and Vulnerability in a Warming World(World Bank, 2010)Climate change is widely acknowledged as foremost among the formidable challenges facing the international community in the 21st century. It poses challenges to fundamental elements of our understanding of appropriate goals for social and economic policy, such as the connection of prosperity, growth, equity, and sustainable development. This volume seeks to establish an agenda for research and action built on an enhanced understanding of the relationship between climate change and the key social dimensions of vulnerability, social justice, and equity. The volume is organized as follows. This introductory chapter first sets the scene by framing climate change as an issue of social justice at multiple levels, and by highlighting equity and vulnerability as the central organizing themes of an agenda on the social dimensions of climate change. Chapter two leads off with a review of existing theories and frameworks for understanding vulnerability, drawing out implications for pro-poor climate policy. Understanding the multilayered causal structure of vulnerability then can assist in identifying entry points for pro-poor climate policy at multiple levels. Building on such analytical approaches, chapters three and four, respectively, consider the implications of climate change for armed conflict and for migration. Those chapters are followed by a discussion of two of the most important social cleavages that characterize distinct forms of vulnerability to climate change and climate action: gender (chapter five) and ethnicity or indigenous identity (chapter six), in the latter case, focusing on the role of indigenous knowledge in crafting climate response measures in the Latin American and Caribbean region. Chapter seven highlights the important mediating role of local institutions in achieving more equitable, pro-poor outcomes from efforts to support adaptation to climate change. Chapter eight examines the implications of climate change for agrarian societies living in dry-land areas of the developing world, and chapter nine does the same for those living in urban centers. Chapter ten considers the role of social policy instruments in supporting pro-poor adaptation to climate change; and it argues for a focus on 'no-regrets' options that integrate adaptation with existing development approaches, albeit with modifications to take better account of the ways in which climate variables interact with other drivers of vulnerability. Finally, chapter eleven turns to the implications of climate policy and action for forest areas and forest people.Publication Green Public Procurement(World Bank, Washington, DC, 2021-11-04)This report provides an overview of international experience in the implementation of Green Public Procurement (GPP). It focuses on the institutional framework that is needed to support the mainstreaming of GPP practices across government. The intention is to equip practitioners with a broad understanding of the issues they need to consider in the design and implementation of GPP reforms. The report draws on a wide range of country examples. It provides links to handbooks and tools for practitioners.