Financial inclusion is commonly presented as being of key instrumental value in delivering the Sustainable Development Goals. But it is not simply an ethically neutral tool to provide entrepreneurial capital, smooth consumption or provide an alternative delivery mechanism for public goods.
Rather, it represents a particular macroeconomic view on how development can be achieved; a particular political view that the poor’s route to achieving access to essential public goods should be a financialised one; and a philosophical view that assumes that the offer of credit to the poor should place respect for their autonomous choice ahead of a duty of care owed them.
In this panel, Philip Mader, Research Fellow at the Institute of Development Studies will be presenting his research on ‘Digital Financial Inclusion And The Crusade Against Cash: Empowerment Or Disempowerment For The Poor?’. This research relates to his recent paper ‘Card Crusaders, Cash Infidels and the Holy Grails of Digital Financial Inclusion’.
This paper analyses the turn toward financial inclusion in general, and digital money and the end of cash in particular, in development policy. It examines the profit-oriented logics at work and raises critical questions about the moral crusade being waged over digitalising poor people’s money. It begins with a discussion of why financial inclusion has displaced microfinance on global development agendas, and has introduced new practices and players to the space of poverty finance.
It shows how financial inclusion brings a modified theory of change, with financial intermediation rather than income generation now being seen as crucial to poverty alleviation, and explains the particular emphasis on promoting cashless payment systems in the name of inclusion.
As becomes evident, powerful actor coalitions (card crusaders) seek the end of cash and the full digitalisation of poor people’s money in pursuit of three holy grails: to capitalise on everyday transaction costs, to seek and analyse big data generated by the poor, and to exert greater governmental power over poor people’s money. This draws into doubt the prospect of empowerment through financial inclusion.
Chair: Lesley Sherratt, King’s College London