Greater access to financial services is a key enabler to of many of the Sustainable Development Goals.
In 2015, the UNSGSA decided that financial inclusion be recognized and embedded it in the agreement, not as an end itself but as a powerful enabler of development progress.
The Global Goals are strongly marked by a broad recognition of the importance of financial inclusion—starting with the agreement’s preamble (“We will adopt policies which increase productive capacities, productivity and productive employment; financial inclusion; [and] sustainable agriculture.”).
Of the 17 goals, 7 feature specific language on financial inclusion:
Prioritizing financial services does not take away resources from other key priorities set through the SDGs – financial inclusion helps create the conditions that ultimately bring many of the SDGs within reach:
SDG 1 – A lack of access to basic financial services makes it difficult for the poor to take control of their economic lives. When people are included in the financial system, they are better able to climb out of poverty by investing in business or education.
SDG 2 – A lack of access to credit and insurance prevents farmers from making investments that could increase crop yields and strengthen food security
SDG 3 – Financial services like medical insurance can provide a formal channel for mitigating the risks of health emergencies – burden of medical costs rests on poor people
SDG 5 – Financial services help women assert their economic power, which is key to promoting gender equality. Financial inclusion of women can create gender equality by giving them greater control over their finances.
SDG 8 – When poor people are excluded from the formal financial system, the foundations of shared economic growth are weak – effective financial systems can mobilize savings to finance productive economic ventures and improve the probability of successful innovations
SDG 9 – Access to financial services, particularly credit, is likely to allow more businesses to be started and allow existing firms to expand their services by enabling greater investment in inventory, labour, and other means of production
SDG 10 – By providing a foundation for equitable growth and improving the lives of the poor, financial inclusion helps reduce inequality and the likelihood of social turmoil.
However PFIP’s 3 workstreams contribute to the achieving four other goals:
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