8. Improving Access to Financial Services: Theory and Practice Around the Globe

Lack of access to formal financial services for poor segments of the society and its potential consequences is well documented. However, researchers argue that it is not only the poor that lack access to formal financial services, but limited access to financial services by non-poor entrepreneurs is likely to be even more important for growth and overall poverty reduction (Beck et al., Access to Financial Services: Measurement, Impact, and Policies. The World Bank Research Observer, 24 (1), 119–145 2009). We therefore broaden the definitional scope of financial inclusion to include poor as well as non-poor entrepreneurs. We then use systems thinking to present causal mapping of the organic relationships found in the development theories to locate financial inclusion as a development tool to materialize the quality of life in both the worlds. To improve the operationalization of our conceptualization, we take stock of the practices around the globe by reviewing the relevant literature and present our framework to address this issue.