Designing Government Policies to Expand Financial Inclusion: Evidence from Around the World

Half of the world’s adult population is excluded from using even the most basic formal financial services, despite the large potential benefits (Chaia et al., 2009; Demirguc-Kunt and Klapper, 2012). This paper discusses some common reasons behind not having a formal account and reviews regulatory policies introduced to remove the physical, bureaucratic, financial, and trust barriers to the use of formal accounts. We summarize some public and private sector product innovations designed to expand financial inclusion—defined here narrowly as the ownership and use of formal financial accounts—particularly for the poor.