UK researcher suggests the financial inclusion agenda is largely based on foundations of sand
Dr Philip Mader, a Research Fellow at the Institute of Development Studies (IDS) in the UK, has just released a very interesting paper looking at the rationale for financial inclusion. His analysis concludes that the increasingly popular financial inclusion agenda promoted by the World Bank, IMF, OECD, G20, and wilfully taken on board by the flailing microfinance movement in order to keep itself relevant and alive, is very largely based on mere assumption and wishful thinking; it is not based on solid empirical evidence. Mader analyses several criteria and finds that key texts have been misrepresented and distorted in order to come to the required conclusion that 'financial inclusion works for the poor'. Sadly, (but predictably?) papers by World Bank officials and their regular consultants are some of the worst offenders, arguing, for example, that the data show that financial sector development is good for growth, which seems reasonable, but they then add, apropos of nothing, that it is pro-poor as well, thus giving ammunition to the financial inclusionistas based on a falsehood. As Mader argues, the data could actually be read the opposite way - that more finance is need for larger enterprises and formal SMEs, and the supply reduced for informal micro-enterprsies and self-employment venues, which would be my view.
Sounds to me like powerful interests want to convince the poor that financial inclusion is being pursued in their interests, when the evidence does not actually show this. Might one factor be that global financial institutions realise that they can make a mint from selling expensive credit and other services to the poor under cover of 'helping the poor'? At least one prominent researcher in DC has reported his concerns along these lines:
Milford Bateman
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Posted by: milford bateman <milfordbateman@yahoo.com>
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