A cashless society puts Financial Inclusion at risk

Cash remains embedded in cultures around the world. When disaster or crises emerge, people trust cash as a store of value. Above all, it is a means of payment that can be used by absolutely anyone at any time.




Saving for the unexpected is sound advice for everyone. Money provides security, and if it’s protected, can lead to future prosperity. Having a bank account will help your savings grow, it’s convenient for paying bills and will keep your money safe from theft and fire.

But traditional financial services remain out of reach to 2 billion people around the world. There are many reasons for this Financial Exclusion, including poverty, access, distrust of banks and an urban/rural divide.


New financial initiatives should incorporate the use of cash

As developing nations look at ways to bring Financial Inclusion to all their citizens, they must remember the importance role that cash holds within financially excluded communities and new financial initiatives should also conserve and promote the use of cash.

Cash will, and should, remain a vital part of the transition from financial exclusion to financial inclusion. Most of the financially excluded are poor and reside in developing countries. By far, the greatest barrier to having a bank account most often cited by the financially excluded is a lack of sufficient funds. Other reasons include living in an underserved rural area, the inability to prove one’s identity and lack of financial literacy. Interestingly, although financial institutions have successfully increased the number of bank account holders in developing nations, a massive 25% of these accounts are unused. So this implies that having a bank account alone is not the solution.


Cash is the first step to Financial Inclusion

Cash is universal and, therefore, cannot be ignored in financial inclusion efforts going forward. It is accepted everywhere and can be used by anyone, regardless of ethnicity, age or socioeconomic background. Despite the huge growth in digital payment systems, cash persists.

Financial inclusion is not about going ‘cashless’ but about increasing the ways in which people can use cash. Rather than drawing a line between the ‘haves’ with access to digital payments and the ‘have-nots’ whose don’t; innovative cash-friendly programs will boost inclusion by building upon the things that these communities know and trust best. Even when money is sent electronically, it is most often converted into cash.

Cash is the first step to Financial Inclusion. Attempts to replace cash with digital payment systems will create a new ‘monetary divide’ and ultimately fail. Cash and digital systems should operate as complementary tools in the fight for a better quality of life for developing economies.


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