Chapter 22: Financial inclusion and microfinance
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This chapter delivers an empirically informed critical engagement with financial inclusion. It questions whether or not access to financial services constitutes an urgent universal human need, and probes for evidence regarding the potential benefits and harms of financial inclusion. The authors discuss different approaches to understanding and defining financial inclusion, and then look at the history of microfinance, the intervention at the heart of financial inclusion efforts in developing countries. The authors then examine the empirical evidence for and against poverty impacts and women’s empowerment resulting from financial inclusion, which they find is inconclusive, and they find even weaker evidence and logic for financial inclusion driving macroeconomic development. Discussing the broader politics of financial inclusion, the authors highlight how it is implicated in a broader financialization of development, which inserts market logics into non-market spaces and enables new forms of accumulation, without necessarily producing developmental impacts. They warn about the emerging connection of financial inclusion activities with behaviourist thinking, which might blame poor people for being (or staying) poor. In conclusion, the value of financial inclusion, as an intervention governed by the unequal rules and power relations of financial systems, remains ambiguous.

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