This chapter provides an in-depth discussion of sustainable financial inclusion. Using the discourse analysis method, the chapter provides several definitions of sustainable financial inclusion and shows the importance and benefits of sustainable financial inclusion. The chapter also highlights the strategies to achieve sustainable financial inclusion and some challenges that may be experienced in the pursuit of sustainable financial inclusion. The implication of sustainable financial inclusion is that there will be increasing demand for agents of financial inclusion to not only seek profits but to also seek the preservation of society and the environment in their efforts to increase financial inclusion in rural and urban areas. The sustainable financial inclusion agenda will give banked adults an opportunity to pressure agents of financial inclusion to be sustainability oriented. This is a privilege that is non-existent in the mainstream financial inclusion agenda. This calls for a shift from the ‘mainstream financial inclusion' agenda to a ‘sustainable financial inclusion' agenda.
Top1. Introduction
Financial inclusion refers to access and use of affordable financial services (Fungáčová and Weill, 2015; Hendriks, 2019; Ozili, 2018; Dahiya and Kumar, 2020). Proponents of financial inclusion argue that financial inclusion will give everyone access to affordable financial services which they can use to improve their economic welfare (Demirgüç-Kunt and Singer, 2017; Ozili, 2020). Development economists consider financial inclusion to be an important strategy for achieving the sustainable development goals (see, for example, Chibba, 2009; Allen et al, 2014; Niaz, 2022; Valencia et al, 2021; Ozili, 2023a&b), because they believe that financial inclusion gives everyone access to essential financial services and will enable them to financially contribute to ongoing sustainability effort towards achieving the United Nations sustainable development goals (SDG) by 2030.
Most financial inclusion objectives are achieved using agents of financial inclusion (AFI) which may include commercial banks, microfinance institutions, Fintech companies, Bigtech companies and bank agents. Most agents of financial inclusion help to accelerate financial inclusion in exchange for a fee (Ozili, 2018; Wyman, 2017). These agents of financial inclusion (AFIs) need to do more than bring unbanked adults into the formal financial system in exchange for a fee (see, for example, Ozili, 2023a). They need to take into account environmental, social and governance (ESG) considerations in their financial inclusion efforts or strategies (Chitimira and Warikandwa, 2023; Arner, Buckley, Zetzsche and Veidt, 2020; Ozili, 2023b)1. This brings us to the issue of sustainable financial inclusion which calls for aligning financial inclusion with sustainability principles.
The demand for sustainability in financial inclusion is increasing among banked customers. Many banked adults are communicating how important it is for their financial institutions to support sustainability. Their demand for sustainability is shaping their choice of financial services provider, it influences which financial services they choose to patronize, it influences who they invest in services with, and it impacts their overall choices on where to access financial services. Because sustainability is valued by many banked adults, banked adults expect agents of financial inclusion (AFIs) to do better when it comes to protecting the environment. Therefore, it is important to incorporate sustainability principles in financial inclusion strategies. This paper discusses the concept of sustainable financial inclusion – a concept that integrates sustainability principles into financial inclusion strategies.
This study contributes to the sustainability literature (see, for example, Ozturk and Ullah, 2022; Kumar, Sharma, Rao, Lim and Mangla, 2022; Ozili, 2022; Setyowati, 2023; Sharma, Shrivastava, Rohatgi and Mishra, 2023). The study contributes to this literature by identifying an area of development that need to adopt the principles of sustainability. A notable area of development in this regard is financial inclusion. The study also contributes to the financial inclusion literature. Notable studies in this literature include Ozili (2018), Kara, Zhou and Zhou (2021), Ozili (2021), Kuada (2019), Koomson, Villano and Hadley (2020), Sahay et al (2020) and Feghali, Mora and Nassif (2021). The study contributes to the financial inclusion literature by examining the modifications that should be introduced into mainstream financial inclusion strategies. One of such modifications is to align financial inclusion with sustainability principles.