This article has been written by Ms. Madhumita Barik a final year LLM student of Adamas University.

ABSTRACT: 

The Technology Facilitation Mechanism will consist of an online platform calling for full and equal access to formal financial services for all, a collaborative multi-stakeholder forum on science, technology, and innovation for the sustainable development goals, and an inter-agency task team on science, technology, and innovation for the sustainable development goals, all of which are based on multi-stakeholder collaboration between Member States, civil society, the private sector, the scientific community, and other stakeholders. In compliance with national goals and laws, member states will establish or evaluate their financial inclusion strategies after consulting with pertinent stakeholders. They will also think about making financial inclusion a policy goal in financial regulation. While traditional commercial banks would only be able to target the non-poor and rich clientele, cooperatives are able to serve the moderate, vulnerable, and portion of the extreme poor through their microfinance services. Financial institutions that reach members who would otherwise be excluded from traditional loans and savings schemes, such as the poor, those living in remote areas, indigenous people, women, and youth, through a variety of financial services, such as credit unions and cooperatives, thus offer comparative advantages.

KEYWORDS: United Nation, Financial Inclusion, Banking, Promoting Access, Sustainable Development.

INTRODUCTION:

Financial knowledge, which is essential for social inclusion, and many people’s access to financial services are still lacking, particularly for women. Anybody who can utilize financial services has access to a broad range of high-quality financial services, which increases their financial capabilities. This is known as financial access. Financial inclusion is acknowledged by the UN as being essential to both sustainable development and the fight against poverty. The availability and accessibility of financial services to all societal segments especially those who are historically marginalized or underserved is referred to as financial inclusion. This include having access to credit, banking, insurance, and more financial resources. Encouraging financial inclusion is in line with a number of Sustainable Development Goals (SDGs), including the elimination of poverty, gender parity, and economic expansion. Financial inclusion is the provision of a wide range of financial services by several reliable and long-lasting organizations to all people at a fair price. The goal of inclusive finance is to improve financial services accessibility for small, medium-sized and microbusinesses as well as people. Access to financial services may significantly contribute to social and economic development in underdeveloped nations by strengthening financial sectors and domestic resource mobilization. With women’s role in food production and household budgeting, a greater emphasis on women’s specific financial demands can have a significant influence.

The following are important facets of the UN’s work to advance financial inclusion:

1. Worldwide Undertakings: The UN backs a number of international programs that advance financial inclusion. For example, the Better Than Cash Alliance is a collaboration between corporations, governments, and international organizations, such as the UN, aimed at hastening the transition from cash to electronic payments.
2. Sustainable Development Goals and Financial Inclusion: Numerous SDGs are closely related to financial inclusion. Particularly pertinent are Goals 1 (No Poverty), 5 (Gender Equality), and 8 (Decent Work and Economic Growth). Financial services accessibility advances gender equality by giving women access to the workforce and boosts overall economic growth while enabling individuals and communities to escape poverty.
3. Advocacy and Awareness: On a national and worldwide scale, the UN supports laws that advance financial inclusion. It aims to increase understanding of the value of financial inclusion as a means of promoting economic growth and reducing poverty.
4. Building Capacity: To help emerging nations fortify their financial institutions and systems, the UN supports capacity building initiatives. To strengthen the capacities of governments, financial regulators, and service providers, this entails providing training and technical support.
5. Data Gathering and Research: To comprehend the difficulties and possibilities associated with financial inclusion, the UN gathers data and conducts research. The creation of successful policies and programs is aided by this knowledge.
6. Partnerships: To develop alliances that can support financial inclusion programs, the UN works with governments, financial institutions, the commercial sector, and civil society. The emphasis on public-private cooperation is generally placed on utilizing the advantages of both industries.
7. Technology & Innovation: One of the most important tactics for advancing financial inclusion is to welcome technical breakthroughs. The UN is in favour of using cutting-edge approaches to increase access to financial resources, such as digital financial services and mobile banking.
8. Financial Inclusion for Women : The UN specifically emphasizes gender equality in the context of inclusive finance for women. In an effort to close the gender gap in financial services, initiatives are created to address the particular difficulties women may have while attempting to access banking and other financial resources.
9. Policy Guidance: The UN advises its member nations on how to foster an atmosphere that facilitates financial inclusion. This contains suggestions for financial literacy initiatives, regulatory frameworks, and tactics to encourage banking service accessibility, particularly for disadvantaged and vulnerable groups.
10. Global Findex Database: Projects such as the Global Findex Database are supported by the UN, especially through the World Bank. This database offers thorough information on financial inclusion, including global savings, borrowing, and risk management practices. The information acquired assists decision-makers in improving financial inclusion.
11. Public-Private Partnerships: To promote financial inclusion, the UN promotes public-private partnerships because it understands the value of cooperation. In order to jointly strive for inclusive financial systems, these partnerships bring together governments, financial institutions, non-profits, and the business sector.
12. Technology and Innovation: To increase financial inclusion, the UN is in favour of using technology and innovation. To reach people in isolated or underserved locations, this involves pushing finch solutions, mobile banking, and digital financial services.
13. Human Rights Perspective: According to the UN, financial inclusion is a human right, stressing that having access to financial services is necessary for people to fully engage in society and the economy.

CONCEPT OF INCLUSIVE FINANCE: The Financing for Development Office collaborates with Her Majesty Queen Maxima of the Netherlands, the Special Advocate for Inclusive Finance for Development (UNSGSA), to emphasize the significance of financial inclusion in relation to the Financing for Development procedure. The global community’s efforts to broaden financial inclusion have produced impressive results. Between 2011 and 2014, the global population with an account increased by 700 million. The percentage of adults worldwide with an account is now 62%, up from 51% in 2011. There were 2.5 billion adult unbanked people three years ago. Currently, 2 billion adult people do not have an account. This indicates a 20 percent reduction. Member states are urged under the 2015 Addis Ababa Action Agenda to keep advancing financial inclusion. Countries concur to take financial inclusion into account as a policy goal in financial regulation. A number of initiatives are included in the Agenda with the goal of improving MSMEs’ access to financing, including the utilization of development banks and cutting-edge tools. It also recognizes the significance of strong regulatory frameworks focused on risk for all forms of financial intermediation. It also points out that rules alter incentives, which may have an effect on funding for sustainable development. The Agenda requires nations to make sure that their regulatory and policy frameworks encourage balanced financial inclusion and financial market stability. On December 15, 2015, the General Assembly passed a resolution emphasizing the need for “full and equal access to formal financial services for all,” building on the Addis Agenda.

                                                     More than merely granting access to conventional banking services is involved in financial inclusion. It’s a much expansive idea that centres on giving people the resources and information they need to make wise financial decisions. Fundamentally, the goal of financial inclusion is to guarantee that no one is left behind in the quickly changing financial environment. The provision of fundamental banking services is one of the essential elements of financial inclusion. People who have access to checking and savings accounts as well as other banking services may safely save their money, conduct transactions, and compile a financial history. The availability and use of a broad variety of reasonably priced financial services is referred to as financial inclusion. These services include digital payment systems, credit, insurance, and basic banking amenities. In order to attain genuine financial inclusion, it is imperative to tackle the fundamental elements impeding people from obtaining and employing these services. Encouraging financial education and literacy is another essential component of financial inclusion. A large number of people, particularly those from underrepresented groups, lack the information and abilities needed to make wise financial decisions. Financial inclusion projects may enable people to grasp concepts like investing, saving, and budgeting by offering financial education programs and tools. Achieving financial inclusion is significantly aided by digital financial services. The development of technology has made mobile banking and digital payment systems more comfortable and accessible. Even in places with no physical banking infrastructure, these platforms enable people to monitor their money remotely, get credit, and carry out financial transactions.

CONCLUSION: In order to support, encourage, and facilitate global initiatives to advance financial inclusion, the UN is essential. The UN’s efforts, which acknowledge the value of financial resources and banking access, help to build a more equitable and sustainable global economy. The United Nations’ comprehensive strategy for advancing financial inclusion and access to banks and resources is linked to its main objectives of sustainable development. The United Nations aims to establish a global financial environment that is more inclusive and fair by tackling economic, social, and human rights issues. The UN’s dedication to advancing financial inclusion and access to banks and resources is a reflection of its comprehensive grasp of its effects on economic development, gender equality, and poverty. By means of a blend of policy assistance, capacity building, data-driven insights, advocacy, and cooperative alliances, the UN endeavours to establish a global financial ecosystem that is both inclusive and sustainable, therefore benefiting a varied range of populations and facilitating the attainment of the Sustainable Development Goals.

Reference:

1. This article is published in

https://www.un.org/esa/ffd/topics/inclusive-local-finance/inclusive-finance.html

1. This article is published in 

https://www.un.org/development/desa/socialperspectiveondevelopment/issues/financial-inclusion.html

1. This article is published in 

https://www.worldbank.org/en/topic/financialinclusion/overview

1. This article is published in

https://www.graygroupintl.com/blog/financial-inclusion