Investment and financial inclusion

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Before equitable distribution of income can occur, it must be generated with the use of investment which may be difficult in particular in Least Developed Countries and fragile environments. For growth to benefit all population through equal opportunities, growth has to be sustainable, or inclusive: the opportunities – jobs, access to finance etc. – are accessible and benefit all income groups in the society.

Financial inclusion means that all individuals and businesses have access to useful and affordable financial products and services that meet their needs. However, in the world today, there is a highly unequal access to financial services. One third of adults, 1.7 billion people, are still outside the financial system. This has great implications on their ability to manage day-to-day life, handle economic risks, or invest in productive activities. How could donors support local banks to bridge the unequal gap of financial services? And how could investments in local financial institutions ensure that services are inclusive?