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Pathways to inclusive growth: financial inclusion at the bottom of the pyramid

Financial and social inclusion

The gap between the wealthy and poor around the world continues to grow. In order to reduce this gap, it is necessary to implement policies that will achieve inclusive growth through democratizing productivity. This means the extension of basic rights so that everyone can access and participate in vital networks of services and know-how which are indispensable enablers of increased productivity in modern economic production. This requires access to basic inputs such as electricity, healthcare and education; enabling inputs such as ICT networks, financial services and property rights; and complementary assets such as social capital, professional networks, knowledge and skill networks.

The gap between the wealthy and poor around the world continues to grow. In order to reduce this gap, it is necessary to implement policies that will achieve inclusive growth through democratizing productivity.

Many communities, often those at the base of the pyramid (BOP), are unable to access formal financial services. Even with literacy and education, people may have difficulties establishing trust and credibility, as well as having a lack of confidence and the ability to engage with financial institutions. However, with advances in telecommunications infrastructure and digital technology and the widespread use of mobile telephones in emerging economies, people are now able to use mobile wallets to enable the depositing and withdrawal of money with relative ease, as well as accessing digitally-enabled credit and insurance services.

Technological platforms such as M-Pesa in Kenya, EKO in India and BKash in Bangladesh provide low-cost transaction processing, typically serving clients who may have small-value accounts with irregular flows and would therefore not be highly sought-after customers for traditional banks. For this system to be maintained it is imperative that all technological elements are interconnected. EKO in India has its own technology platform, Simplibank to ensure that a basic mobile phone can be used to perform secure money transfers. It has also developed a business correspondent system to overcome the banking sector’s reliance on branch banking in rural areas. Such business correspondents are generally local retailers well acquainted with their customers, able to facilitate and record transactions and thereby complementing bank branches and mobile network operators.

Veriown Global in India provides an even more comprehensive ‘enabling’ platform for social and financial inclusion, particularly in rural areas. Crucially, Veriown provides cheap solar energy and therefore electricity (basic input) combined with internet and financial services (enabling ICT inputs) together in one platform. Thus, addressing both the gap in energy infrastructure and creating an ecosystem incorporating two other vital services, namely connectivity so that existing mobile phones can be recharged and thereby provide reliable internet access, together with microfinance to enable individuals and small businesses to buy Veriown’s electronic device and, hence, stimulate economic growth at the BOP.

Financial inclusion is inextricably linked with social inclusion. It has been shown that where training has been given in developing relationships to build social capital, communities have bonded to jointly invest in farming and fishing technology leading to greater productivity and enhanced income for all participants.

Social impact investing is a growth area involving companies and non-profit organisations. A case study whereby clean water was brought to 200,000 people in Cambodia, sustainably and at very low cost demonstrates just such as effective collaboration. Social Capital Ventures Development (SCVD) the social impact investor involved, embedded social capital in their planning. They developed a strong relationship with a water filtration company and strategic partnerships with rural community leaders, provided education in schools and hospitals, explained the governance and ownership as well as value and revenue distribution to the participating communities, and remained ‘visible’ and committed to the project, ensuring its success and sustainability.

The role of women is often vital in securing social and financial inclusion. They are often group anchors and influencers and the key element in social network bonding.

The role of women is often vital in securing social and financial inclusion. They are often group anchors and influencers and the key element in social network bonding. Case studies such as the Yangon Bakehouse social enterprise in Myanmar and Great Women in the Philippines, demonstrate that where women are trained in marketing and financial management and literacy as well as provided with vocational skills they can contribute to inclusive growth in their countries.


Inclusive Growth by Howard Thomas and Yuwa Hedrick-Wong, Emerald, 2019.

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