Financial inclusion is often seen as a goal in the work we do with vulnerable and excluded communities. Being included in the financial system of your country comes with various benefits that most of us take for granted. Some of the benefits include:

1. A step towards equality and agency
2. Enables people to manage and save their money
3. Provides opportunities to access micro-financing which can lead to better long term prospects
4. Improves the ability to handle uncertainties that require ad hoc and unexpected payments or ‘financial shocks’
5. It can help drive economic growth

The above list can be disagreed about or added to, however it is hard to argue that there are no benefits to financial inclusion. However, financial inclusion often is held up as the end goal, while the other side of it is not spoken enough about. And no, I am not talking about the negative sides of financial inclusion like debt, predatory financial instruments, and the like. While those are true and definitely risks, in this case I am talking about financial literacy.

Financial inclusion without financial literacy is irresponsible. Understanding how to live wisely in the financial world must be a fundamental aspect of inclusion. Without it, the negative risks of financial inclusion will gobble people out. The financial system has no care for people, however when used well the financial system can enable agency and huge benefits.

Financial literacy is like the foundation of a house. Without it, the house will collapse. However, you can’t live in the foundations, so you need the house too. It’s another chicken and egg scenario and we need both literacy and inclusion. It’s time to start emphasising literacy more, we can’t just assume it will happen with inclusion. It won’t. We must be intentional.

The choice is up to us.

Photo by Fabian Blank