Date: 15 February 2021
Global Microscope 2020: The role of financial inclusion in the Covid-19 response
The Global Microscope assesses the enabling environment for financial inclusion across five categories and 55 countries. This year, regulators and policymakers have faced a number of challenges as a result of the economic crisis caused by the COVID-19 pandemic. In recognition of this, the Global Microscope report focuses on the role that financial inclusion has played in the crisis response, and on the policies that have made financial systems in 55 mid- and low-income countries more resilient and inclusive.
Extract from the introduction:
The global health crisis provoked by the COVID-19 pandemic shuttered large parts of the global economy as governments around the world imposed lockdowns to mitigate the spread of the virus. The economic consequences of these lockdowns have affected the poor disproportionately. According to the World Bank, the COVID-19 pandemic could push up to 100m people into extreme poverty. Almost half of the projected new poor will be in South Asia, and more than one-third will be in Sub-Saharan Africa. Unemployment has spiked, and billions of workers in the informal economy are struggling to earn a living.
Estimates from the first month of the crisis showed incomes for informal workers dropping by an average of 81% in Africa and the Americas.
As businesses around the world found themselves unable to trade and individuals found themselves unable to work, they sought savings, credit, government assistance and other financial tools to even out the shocks and persevere down the path to a new normal.
For those who are disconnected from the financial system and lack access to such tools, the way forward could be decidedly bleak. The 2020 Global Microscope explores the role that financial inclusion has played in policymakers’ crisis response, providing data on how the 55 countries included in the index have leveraged their financial infrastructures to support vulnerable individuals, small businesses and the financial providers that serve poor households.
The Global Microscope data assess the enabling environment for financial inclusion across five dimensions:
- Government and Policy support
- Stability and integrity regulation
- Products and outlets regulation
- Consumer protection
Note: The report can be downloaded from here