Remittance plays a very crucial part in financial inclusion. Ideally, financial inclusion means having access to a savings or cheque account with a local bank.
So in essence, we can safely say that anyone who does not have a bank account is not financially included.
What exactly is financial inclusion?
It is basically the delivery of banking services at an affordable cost to the disadvantaged and low income groups.
In order to understand this better, let us look at the impacts of financial exclusion which include:
- Loss of consumers: This will impact small businesses negatively.
- Increased unemployment
- General decline in investments.
- Social exclusion.
How does remittance play a role in financial inclusion?
In simple terms remittance allows people who ordinarily do not have access to banking services to actually go into a bank with just their ID document and collect or send money.
So, although the banking system sometimes marginalises the already marginalised, remittance makes available the banking and payment services to the entire population without discrimination.