Info & Resources

What is financial inclusion?

There is no one authoritative definition of financial inclusion but Transact defines financial inclusion as:

A state in which all people have access to appropriate, desired financial products and services in order to manage their money effectively. It is achieved by financial literacy and financial capability on the part of the consumer and access on the part of financial product, services and advice suppliers.

What is Financial Exclusion?

Transact defines ‘financial exclusion’ (the opposite to financial inclusion) as:

A state where individuals cannot access the financial products and services that they need.

People experiencing financial exclusion typically exhibit one or more of the following characteristics:

• A lack of key financial products such as a bank account, insurance, savings products and pensions and the financial services that come with them

• A reliance on alternative forms of credit such as doorstep lenders and pawnbrokers

'Financial capability' refers to people's skills in choosing appropriate financial products, using financial services and managing their money effectively.

For more information please read Financial Inclusion and Capability Explained - a briefing by Transact and the Resolution Foundation.

What is being done to promote financial inclusion?

There is an increasing amonut of activity from Government and private and the voluntary sectors to promote financial inclusion.

A number of reports have mapped private and voluntary sector work related to financial inclusion:

Short Changed is a guide for donors and funders interested in financial inclusion from New Philanthropy Capital, and provides a good overview for anyone interested in the financial inclusion sector. (2008)

Financial inclusion in the UK: Review of Policy & Practice from the Joseph Rowntree Foundation assesses the scope of current activity and make recommendatios for government and the financial services industry. (2008)

A Snaphot of financial inclusion policy and practice in the UK from New Policy Institute looks at activity in 5 key areas - a summary or full report are available (2007)

Transact works to share information across the financial inclusion sector. Please do send us anything to do with news, events, job adverts, reports, resources or updates which you think may be of interest to others. Email transact@toynbeehall.org.uk, and watch out for new developments!