Financial exclusion is the inability of individuals, households or groups to access financial services in an appropriate form. Financial exclusion is either a cause or a consequence of social exclusion, or both. Access to financial services is essential for citizens to be economically and socially integrated in today's society. It is also a requirement for employment, economic growth, poverty reduction and social inclusion.
Financially are excluded people with low income, part of a household with no wage earner, with less education, part of an ethnic minority, with migrant background, very old or very young, or women, are more likely to be financially excluded than others.
Several factors are considered major causes of financial exclusion in European countries:
Market responses: A quick adaptation of the market to society’s needs can take place: e.g. the introduction of basic bank accounts in European countries, partnerships between banks and other organizations to reach a wider range of people, bank’s own charters and ground rules regarding the provision of their services (such as in Belgium, France, Germany and the United Kingdom).
Regulatory responses: On the governmental side, the fight against financial exclusion is included in the National Strategic Reports on Social Protection and Social Inclusion elaborated by each country within the EU framework (e.g. access to a bank account). Some regulatory responses still need to be implemented (e.g. simplified soft loans, face-to-face counselling, or reinforcement services for debtor advice and guidance).
Source: Financial services provision and prevention of financial exclusion, European Financial Inclusion Network (EFIN).
To find out more, visit: