In 2018, 1.7 billion adults worldwide, nearly 1 adult out of 3, still live without basic financial transaction accounts.
For the 1.2 billion people who did open financial accounts between 2011 and 2018, the problem is that many do not actively use their account. For example, in India’s initiative of financial inclusion in the early 2010s, nearly 90percent of the 100 million accounts opened are dormant, unused, or closed.
These are some of the daunting statistics that pose key challenges for universal financial inclusion by 2020 set by the World Bank. The goal is clear: getting people to open and maintain financial accounts.
Why Financial Inclusion?
Before discussing the mechanics of reaching universal financial inclusion, particularly for impoverished people in developing countries, why the push for financial inclusion at all?
The World Bank has released several studies that closely link poverty reduction, economic growth, and access to digital or physical financial services. In particular, for developing countries, empowering small farmers, merchants, and villages through financial stability and services can significantly improve their livelihood and economic security.
Additionally, financial inclusion, particularly through less formal means such as through microfinance or rotating savings and credit associations, has a key role in reducing social inequality for rural, poorer populations and women in developing countries.
What Are The Solutions?
Particularly in Southeast Asian countries, such as Indonesia and the Philippines, digital solutions to financial inclusion prove most successful. For example, a financial company in the Philippines, PayMaya, has opened doors to people across the country to allow new, emerging payment methods using QR codes. WeChat pay have partnered with a variety of businesses and mom-and-pop styled stores.
This strategy has worked, in part, due to the prevalence of smartphones in Philippines. The number of mobile phone users in the Philippines reached 74.2 million (out of a population 108.2 million), around 70 percent of the country’s population. PayMaya has also utilized the network of local vendors and merchants in the Philippines, which makes their service convenient and credible to impoverished populations who trust local merchants they have been going to for years.
Success in Indonesia
Indonesia is another success story of digital financial inclusion. For example, by making their G2P programs digital, welfare recipients receive payments directly to their digital accounts, which demonstrates the power that technology can have in reducing transaction costs and increasing convenience for those in need. Indonesia also has the regulatory framework to house a thriving banking industry and network of mobile operators. Indonesia has identified that 119 million adults are still excluded from financial services, but that, 100 million out of the 119 are smartphone users. So, the continued path forward for financial inclusion in Indonesia will be increased digitization of financial services.
What Is The Future of Financial Inclusion?
The examples of Indonesia and the Philippines shed light on broader discussions about financial inclusion from governmental organizations like the World Bank and companies like the International Finance Corporation. The success of Indonesia’s and the Philippines’ financial inclusion depends on lowering regulatory barriers, making financial options attractive and convenient, especially to poorer populations, and establishing strong social networks throughout the country.
Significant Barriers
These are exactly the barriers to reaching the last 1.7 billion excluded people, who are predominantly in developing countries. These populations often do not have enough money to open a bank account, lack the financial literacy to maintain a bank account, or simply do not trust brick and mortar institutions that do not have particular incentives to penetrate rural markets. Less formal means, such as microfinance or rotating savings and credit associations (ROSCAs), are more attractive because these systems pool money between trusted individuals, often friends or family, and allow people to save and borrow smaller amounts of funds that would not be enough to open a bank account.
World Bank Efforts
The World Bank has targeted several categories to develop over the coming years, such as creating a regulatory environment to enable access to transaction accounts, drive government-based solutions and programs for transaction accounts, focus on the disadvantaged, such as rural families and women, and digitize payments. The World Bank has identified 25 priority countries where nearly 70 percent of all financially excluded people live worldwide and are on track to reach 1 billion opened accounts by 2020.
From a corporate standpoint, PayMaya shows that financial inclusion offers a new, emerging market for financial and fintech companies, who have an economic incentive and profit motive for tapping into developing countries and helping to improve access to financial services. Digital finance has the potential to reach over 1.6 billion new retail customers in developing countries, with potential profits from the aggregate market estimated to be an astounding $4.2 trillion.
With both political will and economic incentive, the way forward seems clear: invest in digital solutions that partner with local networks and that work to tailor to the preferences of poorer populations, who may have low financial literacy and may mistrust large, corporate institutions.
– Luke Kwong
Photo: Flickr
Beca 18: An Educational Program that Brings Hope
Lack of educational opportunity is one of the principal reasons why people may get stuck in the cycle of poverty. In many places, people are at least required to have a high-school level of education to get a minimum wage job. Most high-paying positions, however, expect people to have a college degree education, something that for many low-income Peruvians, is very hard to obtain.
In the year 2015, Peru ranked 64 out of 70 on the International Programme for Student Assessments: A standardized test that measures student’s performance on academics. The problems don’t lie within the lack of teachers or a good infrastructure; it lies within the fact that most Peruvians don’t have access to a decent education. Most of the most competitive schools and colleges are in major cities, and with usually high tuition costs.
This difference is prevalent in the countryside where some children have to walk for hours to go to school. In the Peruvian Andes, children are less likely to go beyond high-school education and much less pursue a college degree. As of the year 2017, only 16 percent of young adults were pursuing a college degree, principally because of the inability to pay the high tuition. Fortunately, a governmental program called Beca 18 (Scholarship 18) may soon change that.
The Story of Beca 18
Beca 18 is not the first program that has given scholarships to well-deserved students. The National Institute of Scholarships and Educational Loans, was founded in 1972 and lasted until 2007. While they did offer necessary scholarships and loan payments, they only centered in Lima. After 2007, the new Office of Scholarships and Educational Loan opened, with a more polished selection of students and with a clear focus on trying to reach scholars located on problematic areas of the country, but by all merit have achieved academic excellence.
The Office of Scholarships and Educational Loan worked until 2012, the year on which the former president Ollanta Humala “upgraded” it, becoming the National Program of Scholarships and Educational Loans, also known as Beca 18. The program works as an administrative unit of the Peruvian Ministry of Education with 24 regional offices, giving around 52 236 scholarships around 25 regions from 2012 to 2016. Most of the students that benefited were living in extreme poverty.
How the Program Works
The first thing that applicants have to know is if they meet all the appropriate requirements. For Beca 18, a student’s living conditions have to be below the poverty line, attending the last year of high school or have recently graduated and been on the honor roll. The Scholarship has other ramifications that cater to different students, like Beca Albergue, that centers around students that lived in foster care.
After meeting the requirements, the next step is applying to the National Exam, which can be done by just accessing the scholarships webpage during the call-up time, that happens around December each year. Each student needs to present their essential legal documentation; however, depending on what portion of Beca 18 the student is interested in they may submit additional paperwork. After taking the exam, hosted by many public and private schools around the country, each student receives guidance to get into their desired college. Once accepted, the process of applying for the Scholarship can begin, only students with satisfactory grades on both the National Exam and their college entrance exam, are granted the scholarships.
What Costs Are Covered
Depending on each of the holder’s family and economic situations, the scholarships cover the costs of the admissions exam, full tuition and other work materials, such as a laptop. If needed, the awards include accommodations, transportation, and pocket money. A private tutor is also an option but only for public universities, as privates often offer that service to its students. These, of course, help students that either came from the Andean of Rainforest Regions of the country or lived in an extreme poverty situation.
Famous Recipients
As mentioned before, Beca 18 is an excellent opportunity for many people that couldn’t afford higher education but had exceptional academic abilities. Like Omar Quispe, a recipient that now is a developer for ElectroPeru. He is currently working on a project that could bring good quality electricity to his native Huaylas, a district surrounded by extreme poverty. Another famous case is of Abel Rojas Pozo, that upon graduation started to help local guinea pig farmers spend their business. These efforts were to make his hometown one of the centers of guinea pig exports.
With an educated population, the chances of escaping poverty are higher. And like the recipients of Beca 18, they can use their new-found knowledge to help their families and their communities.
– Adriana Ruiz
Photo: Wapa
Helping Syrian Refugees After Arrival
The Syrian refugee crisis has been ongoing for more than eight years since the civil war that started in 2011. More than 5 million people have fled Syria, while many more were displaced within Syria itself. Externally, Lebanon, Turkey and Jordan have the highest proportion of Syrian refugees in the world. Since refugees often try to live in urban areas for better employment opportunities, they frequently struggle with financial resources and end up living below the poverty line. In response, domestic and international organizations are helping Syrian refugees after arriving in each of these three countries.
Lebanon
As of June 30, 2016, Lebanon had the most Syrian refugees relative to its population, which was about 173 refugees per 1,000 people, or a total of 1,035,700. Lebanon also hosts a high number of refugees compared to its GDP, equating to 20 refugees per $1 million in GDP. While Lebanon hosts a large number of refugees, it is struggling to provide for them. There are around a million Syrian refugees in Lebanon, 70 percent of whom live below the poverty line. These refugees often have little to no financial resources, which leads them to live in crowded homes with other families in more than 2,100 communities.
One organization helping Syrian refugees in the country is the Lebanese Association for Development and Communication (LADC), which emerged to help both Palestinian and Syrian refugees. Its projects range from community-based projects to aid projects with both local and more than 500 international volunteers helping to establish more than 6,500 beneficiaries. One of its projects was the Paradise Wall, a community art project to smooth the integration process between 120 Syrian and Lebanese children by asking them to work together creatively to produce a wall full of designs.
Turkey
Turkey hosts the largest number of registered Syrian refugees – currently at 3.3 million. Authorities claim that there are more than 3 million Syrian refugees, but that they have not registered. This is because they see Turkey as a transit country or fear deportation. The fear of deportation comes from the fact that Turkey offers temporary protection status to Syrians instead of internationally-recognized refugee status. This increases the likelihood of Turkey deporting the refugees while avoiding the risk of receiving international renouncement for doing so. Most refugees attempt to settle in urban areas in these countries, as opposed to refugee camps where only 8 percent of registered Syrian refugees live.
In Turkey, the UNCHR, EU and WHO have come together to fund the Association for Solidarity with Asylum Seekers and Migrants (ASAM), which is a multi-regional organization that does a wide variety of work to help Syrian refugees after arriving in Turkey. It has many projects ranging from legal counseling to psycho-social support for children through playful activities. One of its projects titled Women and Girls’ Safe Space emerged to offer training sessions on women’s reproductive health.
Jordan
Jordan is proportionally the second-largest host of the Syrian refugees, sheltering about 89 refugees per 1,000 inhabitants as of 2016. Fifty-one percent of these refugees are children and 4 percent are elderly, meaning that 55 percent are dependents who rely on the remaining 45 percent of adult, working-age Syrian refugees. Consequently, more than 80 percent of them live under the poverty line.
To deal with this, the Jordanian government has initialized formal processes to help them escape poverty. In 2017 alone, the country issued 46,000 work permits so that Syrian refugees work. Recently, in collaboration with UNHCR, the International Labor Organization (ILO) established an employment center, The Zaatari Office of Employment, in the biggest camp for Syrian refugees. By August 2017, around 800 refugees benefited from this center by registering official work permits in place of one-month leave permits.
While the Syrian refugee crisis is still ongoing, it is important to note that many are helping Syrian refugees to settle and integrate into their host societies. Many countries from all over the world are starting to resettle the refugees within their borders to lift off the burden of poverty and overcrowding in certain areas. People often recognize Lebanon, Jordan and Turkey for their willingness to take in large numbers of Syrian refugees, but this must not erase the work a variety of organizations are doing to help refugees after arriving in their new homes.
– Nergis Sefer
Photo: Flickr
Financial Inclusion Through Technology
For the 1.2 billion people who did open financial accounts between 2011 and 2018, the problem is that many do not actively use their account. For example, in India’s initiative of financial inclusion in the early 2010s, nearly 90percent of the 100 million accounts opened are dormant, unused, or closed.
These are some of the daunting statistics that pose key challenges for universal financial inclusion by 2020 set by the World Bank. The goal is clear: getting people to open and maintain financial accounts.
Why Financial Inclusion?
Before discussing the mechanics of reaching universal financial inclusion, particularly for impoverished people in developing countries, why the push for financial inclusion at all?
The World Bank has released several studies that closely link poverty reduction, economic growth, and access to digital or physical financial services. In particular, for developing countries, empowering small farmers, merchants, and villages through financial stability and services can significantly improve their livelihood and economic security.
Additionally, financial inclusion, particularly through less formal means such as through microfinance or rotating savings and credit associations, has a key role in reducing social inequality for rural, poorer populations and women in developing countries.
What Are The Solutions?
Particularly in Southeast Asian countries, such as Indonesia and the Philippines, digital solutions to financial inclusion prove most successful. For example, a financial company in the Philippines, PayMaya, has opened doors to people across the country to allow new, emerging payment methods using QR codes. WeChat pay have partnered with a variety of businesses and mom-and-pop styled stores.
This strategy has worked, in part, due to the prevalence of smartphones in Philippines. The number of mobile phone users in the Philippines reached 74.2 million (out of a population 108.2 million), around 70 percent of the country’s population. PayMaya has also utilized the network of local vendors and merchants in the Philippines, which makes their service convenient and credible to impoverished populations who trust local merchants they have been going to for years.
Success in Indonesia
Indonesia is another success story of digital financial inclusion. For example, by making their G2P programs digital, welfare recipients receive payments directly to their digital accounts, which demonstrates the power that technology can have in reducing transaction costs and increasing convenience for those in need. Indonesia also has the regulatory framework to house a thriving banking industry and network of mobile operators. Indonesia has identified that 119 million adults are still excluded from financial services, but that, 100 million out of the 119 are smartphone users. So, the continued path forward for financial inclusion in Indonesia will be increased digitization of financial services.
What Is The Future of Financial Inclusion?
The examples of Indonesia and the Philippines shed light on broader discussions about financial inclusion from governmental organizations like the World Bank and companies like the International Finance Corporation. The success of Indonesia’s and the Philippines’ financial inclusion depends on lowering regulatory barriers, making financial options attractive and convenient, especially to poorer populations, and establishing strong social networks throughout the country.
Significant Barriers
These are exactly the barriers to reaching the last 1.7 billion excluded people, who are predominantly in developing countries. These populations often do not have enough money to open a bank account, lack the financial literacy to maintain a bank account, or simply do not trust brick and mortar institutions that do not have particular incentives to penetrate rural markets. Less formal means, such as microfinance or rotating savings and credit associations (ROSCAs), are more attractive because these systems pool money between trusted individuals, often friends or family, and allow people to save and borrow smaller amounts of funds that would not be enough to open a bank account.
World Bank Efforts
The World Bank has targeted several categories to develop over the coming years, such as creating a regulatory environment to enable access to transaction accounts, drive government-based solutions and programs for transaction accounts, focus on the disadvantaged, such as rural families and women, and digitize payments. The World Bank has identified 25 priority countries where nearly 70 percent of all financially excluded people live worldwide and are on track to reach 1 billion opened accounts by 2020.
From a corporate standpoint, PayMaya shows that financial inclusion offers a new, emerging market for financial and fintech companies, who have an economic incentive and profit motive for tapping into developing countries and helping to improve access to financial services. Digital finance has the potential to reach over 1.6 billion new retail customers in developing countries, with potential profits from the aggregate market estimated to be an astounding $4.2 trillion.
With both political will and economic incentive, the way forward seems clear: invest in digital solutions that partner with local networks and that work to tailor to the preferences of poorer populations, who may have low financial literacy and may mistrust large, corporate institutions.
– Luke Kwong
Photo: Flickr
10 Facts About Child Labor in Mali
Mali, the eighth-largest country on the African continent, is home to approximately 18 million individuals, more than half of which are children. Historically, Mali has suffered economically due to excessive conflicts between multiple military coups and rebel groups. With 67 percent of the population under the age of 25, children have become the most vulnerable in a nation growing with violence and slavery. These 10 facts about child labor in Mali will detail the country’s history of child labor and how it is combatting it.
10 Facts About Child Labor in Mali
Mali continues to struggle as one of the world’s poorest nations. These 10 facts about child labor in Mali illustrate how extreme poverty has driven slavery within the nation. Despite numerous failed attempts to control child labor, Mali has seen some advancement in recent years.
– Danyella Wilder
Photo: Flickr
How Poverty Enforces Patriarchy Worldwide
While poverty and patriarchy may seem like separate issues, the two connect deeply. As long as poverty exists, women’s rights and livelihoods will suffer. Likewise, women’s oppression leads to their inability to contribute to the economy and prevents a family’s escape from cycles of poverty. Here are some examples from around the world of poverty and patriarchy reinforcing each other, and some ways humanitarian aid can improve these situations.
Microcredit in Bangladesh Has Left Millions of Women At High Risk For Domestic Violence
From the 1980s to the mid-2000s, people thought that micro-loans would be the future of international development. In Bangladesh, most of these loans went to women on the belief that women could handle money more responsibly than their male counterparts. They received a small amount of money to invest in materials to start a business and earn an independent livelihood in order to bring their families financial stability. Unfortunately, when these women were unsuccessful at lifting their families out of poverty and their families plunged into greater debt as a result of the loans, they often suffered spousal abuse. For other women, as soon as they received the money, the men and their families took it and used it, leaving them to pay off the loans by themselves. As a whole, micro-credit has not had the intended impact on the people of Bangladesh that the international community once hoped for, and rates of violence against women have climbed, increasing the correlation between poverty and patriarchy
Solution: Investing in women’s education will provide them with the knowledge they need to become financially independent and ensure greater legal protection for victims of domestic violence could greatly combat this issue.
Poverty As a Weapon Against Women in the Democratic Republic of the Congo
Sixty-one percent of women living in the Democratic Republic of the Congo live in poverty, compared to only fifty-one percent of men. This is because people have systematically excluded women from peace-building efforts in the country. Because there are no women’s voices at the decision-making table, countries set policies that prioritize men, often at women’s expense. Disturbingly, women’s rights activists in the country are often a target for violence. Many think that those who advocate for women-centered poverty-relief efforts are distracting from larger issues within the country.
Solution: Studies that researchers conducted in the Democratic Republic of the Congo demonstrate that in areas with high levels of poverty, there are high levels of violence against women. Providing food security, as well as funding institutions and organizations to empower women, are important steps in relieving both poverty and oppression in the DRC.
Time Poverty Makes it Nearly Impossible for Indian Women to Contribute to the Economy
In India, the average man works seven hours per day. Although women usually work for nine hours a day, the vast majority of their labor is unpaid housework and childminding. This means that they have little time to earn any outside wages, and therefore, remain financially dependent on the men in their families. The power dynamic that this situation creates is extremely dangerous. Women lose any agency they may have because they depend on their fathers, husbands or brothers for everything. This means that they have no power to go against their male relative’s wills. It also hurts the Indian economy, as women have little ability to contribute to it.
Solution: In rural India, women spend upwards of four hours each day gathering fuel and cleaning utensils to cook with. Providing them with solar or electric cookers could save them three hours of unpaid labor, giving them more time to do what they want to do or contribute to the economy as an untapped workforce.
These examples display just how poverty and patriarchy intertwine and push women and their families into poverty. If women could gain an education, receive food security or use alternative cooking equipment to limit labor, they might be able to improve their situation and lift themselves out of poverty.
– Gillian Buckley
Photo: Wikimedia
10 Facts About Hunger in Algeria
10 Facts About Hunger in Algeria
These 10 facts about hunger in Algeria illustrate that hunger is a problem that the country may overlook. At first glance, the country may appear to be doing well, however, the most impoverished Algerians suffer greatly from food insecurity. Thankfully, the country is making progress in combating this difficult problem, which means there is hope that Algeria will one day eliminate hunger.
– Gaurav Shetty
Photo: Flickr
Updated: July 12, 2024
10 Facts About Life Expectancy in Namibia
Namibia has continued to make large strides in many aspects of life, including life expectancy. Having suffered a history of colonization and oppression, Namibia struggled for years with political, social and cultural issues. However, as the country has begun to strengthen and mingle on a global level, it has and is continuing to make exceptional progress. These 10 facts about life expectancy in Namibia will bring attention to the country’s progress and highlight the necessary changes.
10 Facts About Life Expectancy in Namibia
Some have labeled Namibia one of the most promising countries in Africa because of its increasing social, cultural and economic status. One, however, cannot ignore that there is still a lot of room for progress, especially when looking at the less privileged groups in the country. These 10 facts about life expectancy in Namibia highlight all the good that has taken place and should pose some insight into the future.
– Samira Darwich
Photo: Flickr
Fighting Poverty Through Sustainable Energy in Africa
Pushing for Sustainability
Sustainable energy in Africa has seen significant boosts in recent years. One country making particularly significant strides in sustainable energy in Africa is Kenya. With a renewable energy rate of about 73 percent, Kenya is making efforts to retain sustainability. In fact, the largest wind farm in Africa just recently completed construction in Lake Turkana, Kenya. The facility has been under construction since 2014, and with a total of 365 wind turbines, it will mark a significant boost toward sustainable energy both in Kenya and in Africa as a whole.
In fact, Kenya is making an official, concerted effort towards becoming 100 percent green energy powered by 2020. Kenya’s president, Uhuru Kenyatta, has made clear his commitment to expanding renewable energy in Kenya and has gained support from other developed nations to help invest in those projects in Kenya. Investments have led to increases in wind, solar and hydroelectric power projects over the past 10 to 15 years, with many such facilities doubling in number. Reliance on low-emission geothermal energy has also risen sharply, with Kenya ranking ninth in the world in how much power it generates from geothermal energy.
Sustainable Energy and Fighting Poverty
Aside from being environmentally conscious, renewable energy facilities also markedly increase employment. More sustainable energy in Africa can help people out of poverty. Kenya’s pushes towards wind and solar energy have led to the direct employment of 10,000 workers. Not only that, but access to electricity from these projects has also allowed some 65,000 additional people to seek out and obtain jobs elsewhere, which they could not have found without the use of electricity. The number of workers employed in the sustainable energy sector is also expected to increase by 70 percent by 2022-2023. Similarly, in Nigeria, it is expected that sustainable energy will create 52,000 jobs by that same timeframe.
It is evident that sustainable energy in Africa will drive the future of countries like Kenya and Nigeria, and assist with uplifting people both directly via increased employment and indirectly due to expanded access to clean electricity. These industries will increase not only sustainable sources of energy, but will create a sustainable economy and a sustainable population that will not succumb to the negative impacts of unemployment and poverty.
– Jade Follette
Photo: Flickr
8 Facts About Education in Sierra Leone
Situated towards the bottom of the bulge on Africa’s west coast, Sierra Leone sits on top of one of the most concentrated gold and diamond deposits in the world. But the country’s history as a prime subject of colonialism’s horrors explains why it consistently ranks as one of the poorest in the world. Here are eight facts about education in Sierra Leone that help gage context for the country’s current state of affairs.
8 Facts About Education in Sierra Leone
Even with all these improvements, it must be noted that Sierra Leone still faces significant gender discrimination in its education system, as women are currently significantly underrepresented. For instance, in 2015, the male literacy rate almost doubled the female literacy rate for the population aged 15 or older.
However, hopefully, the trend of inclusion rooted in uniform equity being promoted by Bio will soon extend to all people, especially those historically excluded. His sentiment is echoed in his own words as he said during his campaign, “Education is a fundamental right for all Sierra Leoneans.”
– Liam Manion
Photo: Global Partnership
Top 10 Facts About Living Conditions in Tokelau
Tokelau, a country between Hawaii and New Zealand, consists of three coral atolls and is home to a population of approximately 1,500 inhabitants. Here are the top 10 facts about living conditions in Tokelau.
Top 10 Facts About Living Conditions in Tokelau
As a result of Tokelau’s diminutive size and remoteness, the people of Tokelau live in accordingly interdependent communities. Extreme tropical weather and the effects of rising sea levels present challenges to life in the atolls. As a result, Tokelau has implemented plans for sustainability and preventative measures for emergencies to combat these issues. Recent advances in public services facilitate efforts to modernize the nation. As demonstrated by the top 10 facts about living conditions in Tokelau, the country and its people plan only to prosper.
– Bhavya Girotra
Photo: Wikipedia Commons