Who is Financially Excluded in Africa?

There is a direct relationship between rates of poverty and financial exclusion. For those who live in poverty, almost 73% are excluded from financial services. Despite the impressive growth rates enjoyed in many African countries over the last two decades, it is imperative that all sections of society are financially included in order for that growth to be sustainable, and for it to lead to inclusive development.

Financial inclusion is vital for alleviating poverty and stimulating economic growth. But its benefits go far beyond: it can also help to eradicate famine, support health and wellbeing, ensure quality education, resolve gender inequality, safeguard pure water supplies, provide hygienic sanitation, supply affordable and clean energy, create employment opportunities, inspire innovation, secure infrastructure, and generate justice and peace for all.

Complete financial inclusion is a state in which all people have convenient access to a full suite of quality financial services including credit at affordable prices. Affordability for consumers includes access to more funds, personalized interest rates and lower administration costs.

African Women

Throughout Africa, women are much less likely to hold an account at a financial institution than men. However, it is widely acknowledged that the positive effects of broadening financial inclusion among women go far beyond benefiting the individual—it subsequently benefits their households, the wider community and, ultimately, men as well.

African Youth

Of all of the demographic groups in Africa, African youth are some of the most marginalized. According to a report by the UN, only 12% of those aged between 15 and 24 have a formal bank account. As Africa is the continent with the highest proportion and fastest growing population of young people, it is crucial that the financial exclusion of its youth is urgently addressed. In doing so, young people should be provided with the knowledge, skills and financial credit that will allow them to build a sustainable livelihood.

African Poor

Financial inclusion has been broadly recognized as a critical factor in reducing poverty and achieving inclusive economic growth. However, in every country in Africa it is the poorest that are the most financially excluded. With the wealthiest 20% of adults twice as likely to have a bank account as the poorest 20%, financial inclusion is strongly related to wealth. Financial exclusion also perpetuates poverty, as financially excluded individuals and SMEs are more likely to seek financial services such as loans through riskier, higher-interest sources. Ultimately, for both individuals and their businesses at the poorer end of African societies, being able to access financial services can contribute to investment in education, management of risks and a boost in economic growth.