Financial Exclusion Essay Example | Topics and Well Written Essays - 1500 words

Financial Exclusion - Essay ExampleNow while no bank advertises that it leave behind non extend its banking facilities to mothers on welfare , there are various barriers which would typify that. The in enumerate level of that person may be so low that banking guidelines would not permit giving them recognize facilities . They may not have any lay outed credit because they pay everything in cash, or they may even have bad credit , because they just may not have given as well as much thought to payment on time and they just pay when they have the money. Or only when they may not just know , how the monetary and credit system works.So a trusted group of the great unwashed are excluded from the financial system , so how is this bad and most importantly , how does this resultant you and me After all we are not a socialist or a communist solid ground where everybody should have plan of attack to everything and we besides we already know that system has failed. This is not ab out trying to establish a socialist welfare companionship. There are real damaging consequences to a modern acquit market economy from lack of financial inclusion of a certain group of concourse. First of all a whole group of volume have been excluded from the mainstream economy , that cannot be good for the economy. The people themselves will enter a vicious cycle of paying high interest rates for credit and since these people are already in varying degrees of poverty it just pushes them further into it. Finally poverty breeds dissymmetry , violence and crime. The inner cities, slums and ghettos all of this in common that they consist of financially excluded people and are genteelness ground of poverty and crime.But should Financial Institutions take the burden of providing credit facilities to people who do not meet their credit guidelines Dont they have a responsibility to make sound investment decisions on behalf of their shareholders certainly they do. In fact the current sub prime crisis may not have happened if a hardly a(prenominal) banks had behaved in a prudent manner in lending. You cannot and should not lend to the unlendable. But understand this , these people already borrow money , they pay a very heavy interest for it. So the banks moldiness design products to capture this market rather than asking this group of people to meet their existing guidelines which may be difficult , if not impossible. If Bangladesh can have a successful micro loan platform with Grameen bank , why could U.K. which has a much smaller problem with financial exclusion not come up with solutions. Indeed An interesting feature which emerges from the international practice is that the more developed a society is, the greater is the thrust on empowerment of thecommon person and low-income groups. In U.K The first review of the problems of financial exclusion in 1999 stimulated both debate and development. The government set out its strategy, Promoting financial inclus ion, in 2004, identifying three priority areas - access to banking, access to affordable credit, and access to free face-to-face money advice for people who are financially excluded. UB or Universal banking was setup partly because of this effort , this opened up access to bank accounts at post offices. And this was a very good idea , because bank may expression