Economic growth and
development requires that a large part of the population is involved in
economic activities as well as financially included.
For this to be effective,
the population must access financial services and products which ensure
that
households and businesses irrespective of income levels have access
to and can effectively use the appropriate financial facilities they
need to improve their lives and further their savings and investments.
When the population gets
access to finance, deposits increase and banks will have enough deposits
and through credit creation which makes money available for lending
increases economic activities.
Financial inclusion should
provide access to finances and other financial products to business and
individuals so that they make use of them and these should be provided
in a way that they are sustainable.
The benefits of financial inclusion are far reaching and when sustained they lead to community progress.
Financial inclusion enables
in the reduction of the gap between rich and poor population. In the
current scenario financial institutions are the robust pillars of
progress, economic growth and development of the economies.
Making day-to-day
transactions possible and keeping records of purchases and sales of
daily transactions. When different people access funds different
transactions shall be created therefore there shall be need to keep
records for those transactions and this will help those owners of the
business invest in assets and grow their business thus creating jobs for
different stakeholders.
Through financial inclusion many people will access funds to invest in their future through education of their families.
Financial inclusion through
access to accounts and other financial products, savings, mobile money
systems and payment systems enables potential and empowers men, women
and whole communities.
This, in turn, promotes
investment within the community provides jobs and in reality shows that
employment boosts status, income and ones outlook on life.
Collectively this helps to
invigorate economies. It also promotes equality both within the
community and within families thus reducing the gap between the rich and
the poor through poverty reduction.
When people get access to
financial facilities they are capable of obtaining credit facilities to
facilitate their economic activities. Also with credit the population
become capable of running activities that lead them to investments and
savings.
Furthermore, with financial
inclusion people become capable of securing funds to carry out insurance
activities like medical, life insurance for families and for
businesses. With availability of finances people are capable of insuring
their industrial, agricultural outputs and also insurance for other
businesses.
To achieve the element of
financial inclusion in different societies, the public should be
encouraged to invest in small and medium enterprises (SMEs) because this
is the economic sector where most of the population would be accounted
for and that large part of the population that has reached the age of
work get involved in economic activities.
Though there is need for
financial inclusion, in most developing economies there are limitations
that hamper accessibility to finances. Elements like limited finances,
high illiteracy rate, and remoteness of a big part of the population
also high interest rates limit financial inclusion.
Therefore there is need to
further educate populations about money management facts, how to
increase their savings and investments. Also creation of awareness to
the population when and where funds can be accessed and further
infrastructure development.
The writer is an accountant based in Kigali, Rwanda.
No comments :
Post a Comment