Essay on financial inclusion: the case of informal savings groups

Abstract

This dissertation focuses on the financial inclusion of individuals in low-income countries. Financial inclusion covers a large range of services and tools such as savings, affordable credit, facilitated payment systems, and insurance. While achieving global financial inclusion is not in itself defined as a Sustainable Development Goal (SDG) by the United Nations, it is recognized as a necessary mean to reach those goals such as no poverty, zero hunger, good health and gender equality. Financial tools are key for individuals to empower themselves and reduce dependency on development support. In a world where international aid flows are more and more uncertain, and where repeated crisis, weather financial, climatic, pandemic- or conflict-related, heightened this uncertainty, improving self-reliance and resilience for vulnerable communities is key. It is in this perspective that I worked on those topics during the last three years, aiming to understand what tools can be levered to improve access to financial services and more importantly how to design those tools to address the needs of their target populations and enhance their impacts. The particular focus on savings groups spring from this idea that enhancing financial resilience and independence from donor’s money is the best way to empower individuals and to give them the keys to improve their livelihoods. Just like Ashe and Jagger Neilan (2014) claim in their book on savings groups: “As local communities take charge of the financial aspects of their lives, they gain the skills, confidence, and motivation to do more” and further citing Marcia Oddell (a promoter of savings groups in Nepal): “dependency is not empowering” (Ashe and Jagger Neilan, 2014, p. 1). I strongly believe that savings groups, based primarily on mutual aid and reciprocity between members, are powerful in creating new resources for their members, both financial and immaterial such as solidarity, confidence, and empowerment. This dissertation aims at putting this belief to test, and at better understanding what actually works, what does not, and in which conditions.