Financial inclusion of poor households

© GIZ/Martin Egbert

GIZ is committed to ensuring that everyone can use financial services. In many cases, this enables access to important goods such as clean water, education and electricity, and provides opportunities to lift people out of poverty.

In many developing countries, poor people have no access to financial services. Financial inclusion aims to change this. It means that households and microenterprises receive access to microloans and financial services from formal providers on fair and transparent terms. This includes savings schemes, payment systems and insurance.

These services are prerequisites for enabling people to build up reserves, make investments, transfer money and protect themselves against risk. They give them the means to pay for purchases, education and health care. Micro-entrepreneurs, in turn, are able to obtain the capital required to create jobs, income and prospects for the future.

In Uganda, GIZ works on behalf of the German Government, advising the financial sector on creating the conditions for financial inclusion. It supports the Bank of Uganda in establishing framework conditions and marketing channels for the microfinance sector. A newly established credit reporting agency enhances transparency. GIZ advises the Association of Microfinance Institutions of Uganda on defining standards for evaluating microfinance institutions. It provides courses to inform the population about financial products and about their rights and obligations vis-à-vis financial service providers.

GIZ is committed to adapting local financial systems to the needs of the people, thus creating financial prospects for the future and a way out of poverty. It works on several levels simultaneously in order to achieve the following objectives:

  • It advises central banks and ministries of finance on creating the political and legal frameworks for supporting and regulating the microfinance sector.
  • It improves the performance of training institutions, associations and service providers in the area of finance.
  • It advises financial service providers on business planning, product development, market expansion, human resource development, accounting and corporate governance.
  • It strives to improve consumer protection through regulation, standards and basic financial education.