Theories of Financial Inclusion

23 Pages Posted: 26 Feb 2020 Last revised: 7 Sep 2021

Date Written: January 1, 2020


This article presents several theories of financial inclusion. Financial inclusion is defined as the availability of, and the ease of access to, basic formal financial services to all members of the population. Financial inclusion means that individuals and businesses have access to useful and affordable formal financial services that meet their needs in a responsible and sustainable way. Financial inclusion practices vary from country to country, and there is need to identify the underlying principles that explain the observed variation in financial inclusion practices. These set of principles are called theories. Financial inclusion theories are explanations for observed financial inclusion practices. This study shows that the ideas and perspectives on financial inclusion can be grouped into theories to facilitate meaningful discussions in the literature. The identified theories of financial inclusion are the public good theory, dissatisfaction theory, vulnerable group theory, systems theory, community echelon theory, public service theory, special agent theory, collaborative intervention theory, financial literacy theory, private money theory, public money theory and the intervention fund theory. The financial inclusion theories identified in this paper are useful to researchers, academics, policy makers and practitioners. The resulting contribution to theory development is useful to the problem-solving process in the global financial inclusion agenda.

Keywords: financial inclusion, theory, financial institutions, financial access, access to finance, dissatisfaction theory, vulnerable group, systems theory, community echelon, public service, special agent, financial literacy, collaborative intervention, intervention fund, households

JEL Classification: G00, G21, O16

Suggested Citation

Ozili, Peterson K, Theories of Financial Inclusion (January 1, 2020). Available at SSRN: or

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