The Committee on Development Effectiveness met to consider the Independent Evaluation Group report Financial Inclusion—Lessons from World Bank Group Experience, Fiscal Years 2014–22 and the World Bank Group management response.

The committee welcomed the timely and relevant report in the context of the Evolution Roadmap discussions on partnerships, the Corporate Scorecard, and outcome orientation. It highlighted the importance of financial inclusion for low-income users of financial services—particularly microenterprises, poor households, women, and other excluded groups—wanting to expand economic options and opportunities. Members acknowledged that while there has been good progress globally toward achieving universal financial access in the past decade, about one-quarter of adults still do not have an account for financial transactions. They expressed broad support for the Independent Evaluation Group’s recommendations for the World Bank and the International Finance Corporation to (i) further encourage account use by underserved groups and support this more in their strategies and projects; (ii) design and implement more comprehensive approaches that address constraints in the enabling environment for digital financial services in favor of underserved and excluded groups; and (iii) collect outcome data across different underserved and excluded groups, initially on a pilot basis, to enhance learning on what works to increase the beneficial use of financial services for microenterprises, poor households, women, and other excluded groups.

Members commended the Bank Group’s substantial involvement in financial inclusion activities and encouraged management to expand these to vulnerable groups, including refugees, Indigenous peoples, and religious minorities, to promote access to financial services, create significant opportunities for economic growth, and empower individuals and communities to reduce vulnerabilities toward the eradication of poverty. They underscored the importance of financial and internet literacy, consumer protection, data privacy, and investments in digital network infrastructures, skills development, and platforms among key enablers. Some noted that despite a number of important financial inclusion achievements, information gaps remain regarding whether projects have improved beneficiary outcomes in terms of savings, consumption, income generation, job creation, and poverty alleviation. The committee emphasized the need for a single working definition of “excluded groups” applicable across the institution and considering specific contexts and markets. It underscored the importance of generating and collecting outcome data for these groups and inquired about the challenges as well as management’s plans to improve data generation and collection in the future. Members also underscored the importance of leveraging partnerships and more purposeful collaboration within the Bank Group and with other global actors, continuing to generate relevant knowledge and investments in public goods, ensuring greater transparency and replicability, and building the enabling environment to boost financial inclusion.

Members also inquired about any potential indications of the Bank Group’s financial inclusion interventions helping to formalize the informal sector. They took note of the empirical work of the Development Economics Vice Presidency and of development impact evaluation thus far on the informal sector. This work indicates that access to financial services can motivate formalization of the informal. Cognizant that regulations may disadvantage vulnerable groups, there was a request to have a discussion on the unintended impact of financial regulation.