The Future of Financial Inclusion

This essay celebrates, as a Festschrift, the anniversaries of three Luxembourg institutions active in furthering inclusive finance: the 30 years' anniversary of the nongovernmental Appui au développement autonome (ADA), the 10 years' anniversary of the Inclusive Finance Network, and the 10 years' anniversary of the academic ADA Chair in Financial Law (inclusive finance) at the University of Luxembourg. We discuss the past, the present and the future of financial inclusion in developing economies, considering the actors, technologies, financial and regulatory tools of financial inclusion. We find that financial inclusion policies face three fundamental questions: (1) how to build financial inclusion?, (2) how to measure financial inclusion?, and (3) which impacts does financial inclusion create? The essay summarizes the state of knowledge so far, and reveals the barriers that prevent consistent answers to these fundamental questions. Only if the different actors - regulators, financial institutions, investors, NGOs, academia, international organizations (UN, IMF, AFI) and development banks - interact, with a view to peer learning and respect for local optima, we will be able to answer these questions and determine the path for a successful financial inclusion policy approach worldwide, to the benefit of millions of vulnerable and financially excluded people globally.