EC/FI 375 - Microfinance, Economic Development, and Financial Inclusion
Financial inclusion is one of the main channels for enabling individuals to achieve full economic and social participation. In recent years, developing countries have experienced strong gains in financial inclusion. This is mainly due to the growing role of the financial inclusion sector (which is generally referred to as “microfinance”) and the advent of digital financial services (DFS). For example, in 2021 33% of adults in Sub-Saharan Africa had a mobile money account, compared to a world average of 10%.
The main objective of this course is to introduce students to the importance of and tools necessary for promoting financial inclusion in developing countries. It will also familiarize them with how the microfinance sector has contributed to financial inclusion since its inception. The first part of the course investigates the relationship between finance and economic development and clarifies which subjects are excluded from formal financial systems and how they manage their finances. The second part of the course addresses the microfinance industry, including its players, the products and services offered, and its main innovations (e.g., mobile money and banking). The course also highlights the dark sides of microfinance such as over-indebtedness and the debt trap.