Responsible Finance Forum

Beyond Financial Inclusion – Financial Health as a Global Framework

Tanya Ladha, Kaitlin Asrow, Sarah Parker, Elisabeth Rhyne and Sonja Kelly

Individuals all around the world strive to improve their financial lives. They spend, save, borrow, and plan, working to grow their assets and protect their resources, in the pursuit of improved financial health. A relatively new term in the financial inclusion community, financial health is a model for assessing how well one’s daily financial systems help build resilience from shocks and create opportunities to pursue one’s dreams. Whether rural or urban, in ountries both developed and developing, individuals share a common aspiration for financial health.

In 2015, the Center for Financial Services Innovation (CFSI) created the framework and definition of financial health, originally designed for use and applicability in the United States. Employing an outcomes based approach, CFSI created indicators to help consumers and providers measure and improve financial health. This framework created a definition of success beyond financial literacy or capability, and access or use of products. Having deep expertise in the global financial inclusion arena, the CFSI framework resonated with the Bill & Melinda Gates Foundation and the question was raised –
Could an outcomes based financial health framework translate into a developing world context?

Over the course of 2016, CFSI, in collaboration with the Center for Financial Inclusion at Accion (CFI) and Dalberg’s Design Impact Group (DIG), evaluated hypotheses, conducted research, convened thought-leaders, and tested assumptions, all for the purpose of determining the validity of financial health as a core concept internationally. Teams worked to understand the necessary adaptations such a model would require across borders, as well as the opportunities and use cases for such a framework.

This report presents results of these efforts, finding that the core financial health framework resonates with consumers, practitioners, providers, and funders both in the U.S. and in the developing world. While the core financial health framework translates across borders, there are important distinctions and constraints that influenced the creation of the indicators. Within a developing world context, there are factors exogenous to one’s own behaviors that have critical impact on one’s financial life. While exogenous factors are important in the U.S., we found them to be uniquely important in the developing world.