Financial inclusion washing
| Date | 30 August 2022 |
| Pages | 1140-1149 |
| DOI | https://doi.org/10.1108/JFC-07-2022-0159 |
| Published date | 30 August 2022 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Peterson K. Ozili |
Financial inclusion washing
Peterson K. Ozili
Central Bank of Nigeria, Abuja, Nigeria
Abstract
Purpose –Financial inclusion washing has not beenconsidered to be a crime although it should be. This
paper aims to present a discussion aboutfinancial inclusion washing. It was argued that financial inclusion
washing is the deliberate or unintentional use of exaggerated claims or misleading claims to describe an
entity’scommitment to increase the level of financial inclusion.
Design/methodology/approach –This paper usedthe conceptual discourse analysis methodology.
Findings –This paper showed thatmany entities are at risk of practicing financial inclusion washingsuch
as international developmentorganizations, aid organizations, governmentagencies, central banks, financial
institutions, financial inclusion support groups and associations, among others. This paper alsohighlighted
the manifestations, motivationsand consequences of financial inclusion washing. This paper also identified
ways throughwhich entities can avoid financial inclusion washing.
Originality/value –The literature has not examined how exaggerated claims about financial inclusion
efforts misleadpeople.
Keywords Financial inclusion washing, Financial inclusion, Formal accounts, Banked adults,
Access to finance, Exaggerated claims, Crime
Paper type Viewpoint
1. Introduction
This paper presents a discussion about financial inclusion washing. Financial inclusion is
the provision of basic formal financialservices to all members of society. Financial inclusion
involves bringing unbanked adults into the formal financial sector so that they can have
access to formal financial services whichthey can use to improve their welfare (Ozili, 2021a;
Chen and Yuan, 2021, etc.). Financial inclusionensures that everyone has access to financial
services. Once access to formal financial services is granted and guaranteed, banked adults
will be able to use available formal financial services, such as loans, deposits and savings
products, to improve theirwelfare.
Although many scholars agree that financial inclusion plays an important role in
improving welfare in society (Allen et al.,2016;Ozili, 2020;Arun and Kamath, 2015;
Markose et al.,2022, etc.), some scholars have raised concerns about the way agents of
financial inclusion carryout their financial inclusion activities (see, for example, Mader,
2018;Ozili, 2021b;Lopez and Winkler, 2018;Ozili, 2022). Scholars point out that agents of
financial inclusion charge high transaction costs that discourage poor people from joining
and remaining in the formal financial sector. Other scholars argue that agents of financial
inclusion are seeking to make profit off poor people, which is exploitative in nature. Some
scholars have also raised concernsthat agents of financial inclusion are achieving financial
inclusion through the financialization of poverty (Mader, 2018). A more important concern,
which is the focus of this paper, is that the agents of financial inclusion may misrepresent
their support for financialinclusion or mislead people into believing that they are promoting
financial inclusionwhen they are not doing so.
The above concerns show that, although financial inclusion is a fairly reasonable idea
from a development and welfare perspective, it can have negative consequences when it is
JFC
30,5
1140
Journalof Financial Crime
Vol.30 No. 5, 2023
pp. 1140-1149
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2022-0159
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
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