Ms: heba hassan +249906850429Financial Exclusion
financial exclusion can be defined as the unavailability of banking services to people with low or non income. It is believed to be one factor preventing poor people leave out poverty.
The basic financial services mean:
Deposit accounts Savings accounts.Money transfers.Financial consultancy services.The financing (credit).Insurance services.
. The deposit account is the necessary condition for obtaining the other financial services and products.
Another believe is that, the financial exclusion leads- in the long run- to the social exclusion represented in the exclusion from enjoying services affects the quality of living standard such as education, health and residence.
2\ financial exclusion formsBanking ExclusionSavings Exclusion:Credit exclusionInsurance exclusion:
Banking ExclusionIt is the inability to access banking services. The most prominent aspect is the inability to obtain a deposit account (current account)
This is reflected in the following negative aspects:
Inability to repay through checks.
Lack of access to financial transfers (salary, pension and transfers to others)
Exclusion from loans and financing.
In terms of the depthThe unbankedThe partially bankedThe fully banked
2-Savings ExclusionLack of money for saving because of the income low-standard.Unfamiliarity with putting savings in the banks.Lack of dealing with banks either because of bad experiences or wrong pre-judgments towards banks.
3-Credit exclusionCredit or loans are important financial tools facilitating the possibility of obtaining goods and services that cost more than the available income such as, furniture, cars, buildings, machines and others.
The credit exclusion may cause social exclusion in one of the following forms:
Inferiority and self-underestimation feeling in comparison with other society's individuals
Continuous failure to meet the family expenses through the income sources then entering into over-indebtedness as a result of resorting to non official financing sources and it over-charging the cost of funding leading its customers to indebtedness debt's empty circle
In depthCredit excludedInappropriately servedAppropriately served:
In the modern societies, some of insurance services have to some extent become compulsory such as cars and retirement insurance while there are other optional services such as health insurance
So the degree and depth of the insurance exclusion is determined by the existence and expansion of the official sector in the society.
the dimension of the financial exclusionThe majority of the population does not obtain the basic financial services offered by the official main financial institutions.
Only a few numbers of populations obtain the basic financial services from the official financial institutions under inappropriate terms or unsuitable quantities (quantity and quality low standard).
The official financial sector institutions offering the basic financial services to the minority are not permanent
reasons of the financial exclusionSupply sideThe private sectorThe nonexistence of official financial institutions near the poor people in the rural areas
In the cases where the poor have the chance to reach the official financial institutions, they fail to benefit from the services and products offered by these institutions because it does not match the requirements of the low income
The States governments' failure to deliver the financial service to the poor and the low-income citizens either through its institutions
Demand side In the cases where the poor have the chance to access the official financial institutions, they fail to benefit from the services and products offered by these institutions because it does not match the requirements of the low-income customers'
The States governments' failure to deliver the financial service
It means all the arrangements and procedures taken by the State to guarantee the society's individuals the following
access to the basic financial services offered by the official financial systemOn the other hand, the access to this goal (Full financial inclusion) leads to achieve what is known as financial inclusiveness which became the purpose all the world's societies seek.
financial inclusion indicatorsFinancial depth indicator:Financial availability indicatorFinancial usage indicator