Safeguarding Financial Inclusion During Crises: Lessons for Policymaking

Systemic crises have well-known impacts on financial stability and economic growth but can also reverse hard-won gains in terms of financial inclusion. This working paper calls for intentionality when calibrating the crises response to ensure that it reaches the most vulnerable. It offers guidance to financial safety-net authorities on designing crisis response measures that both restore stability and safeguard financial inclusion.

The study draws on empirical analysis across 58 countries and microdata from over 300,000 individuals. It also includes surveys conducted among central banks as well as reviews of real-world case studies from Indonesia, Lebanon, the Philippines, and Thailand. Three key findings from this research are as follows:

• Strategic use of the policy toolkit will support inclusion.
• Action before a crisis unfolds will enable containment of financial distress without undermining inclusion goals.
• Broad-based macroeconomic or sectoral policies are generally ineffective in improving financial inclusion among the most excluded populations.