Financial inclusion helps fight poverty because it

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Financial inclusion helps fight poverty because it reduces income and consumption volatility. This, in turn, allows people to make better decisions that ultimately help shift their income curves up. It’s this shifting of the curve where we need to focus our efforts. After all, financial inclusion is not an end in itself – it is simply a means to an end: a more inclusive world with opportunities for all. In this sense, financial inclusion is the catalyst that helps ensure people can access a more sustainable livelihood, can withstand economic shocks such as unforeseen illnesses requiring medical treatment, have the tools to understand their financial health and are able to transact securely and seamlessly without being subject to the perils of cash. It is these forces that will shift the curve and steepen the growth trajectory for both individuals and economies. The report concludes that a slowdown in overall poverty reduction makes it unlikely the World Bank’s 2030 targets will be met. What’s your reaction to this and what implications does it have for the role of the private sector and partnerships for achieving zero poverty?
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Payal: Partnerships are key. We talk a lot about private-public partnerships in international development – partnerships that bring together the private sector with governments and civil society. Those are critical because all players bring different assets, knowledge sets and capabilities to the table. “...the model of partnership that hasn't been so loudly championed but which is absolutely going to be catalytic when eliminating poverty is the private- private partnership.” Payal Dalal VICE PRESIDENT, GLOBAL PROGRAMS From our perspective, the model of partnership that hasn’t been so loudly championed but which is absolutely going to be catalytic when eliminating poverty is the private-private partnership. When two companies get together to address a social problem, magic happens. I am not being hyperbolic. They not only bring unique core competencies that can complement each other beautifully, they also try to address the sustainability of the intervention. To succeed, we need to build sustainable models to address inclusive growth and shared prosperity. We are really excited about our partnership with Unilever, which aims to grow micro and small businesses within Unilever’s supply chain. In Kenya, we have partnered with Unilever and KCB Group to use transaction history with the supplier as a proxy for a credit score, helping duka (shop) owners access credit. The finance is paired with training to maximize adoption and responsible usage.
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Arturo: We also need to look at the interplay of all the variables keeping people in poverty. The report is clear, poverty is not just about a lack of income.; poverty is a multidimensional economic reality and it’s when these dimensions begin to interact with one another that the sources of exclusion begin to add up for people in vulnerable situations. For example, people in
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  • Summer '16
  • EMMANUEL
  • Poverty, President Jim Yong Kim

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