Financial inclusion and Poverty reduction
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Date
2020
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Publisher
Aryan Digital Press
Abstract
Over time, it has been argued that economic growth is a powerful
instrument for poverty reduction, the improvement of the standard of
living and quality of life in developing countries. However, in recent
times, increasing economic growth has not been influencing poverty
reduction significantly and among other precarious development
indicators, especially in developing countries. And with the growing
number of extreme poverty resulting from lack of out-of-pocket among
low-income households, this had prompted the principle of financial
inclusion to become globally accepted due to poverty reduction role
play in society. It is on this note that this chapter reviews the importance
of financial inclusion on poverty reduction, the effect of financial
exclusion on poor, financial education and how financial institutions
can enhance financial inclusion to perform better poverty eradication
roles. Thus, it concludes that financial inclusion provides a low-income
household with affordable financial credit to jumpstart business which
generates income to improve the living standard thus reducing poverty.
It gives the household an opportunity to create values and use them to
provide basic needs such as education, health, and nutrition. It also
provides standby finance for health spending in case of health shocks
through insurance and health savings accounts.
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Keywords
Financial Inclusion, Poverty, Financial Exclusion