ONE of the main hurdles in extending financial inclusion has been to increase the outreach of financial services to low-density areas and low-income populations, as this is deemed to be not financially sustainable under traditional banking models and corresponding regulatory requirements. The problem of financial exclusion is compounded if the focus is shifted towards people living on less than $2 per day, as their income is not only low but also irregular. Thus, they are more vulnerable to external shocks and their cash flows are uncertain. There are many reasons why individuals or groups may not take full advantage of mainstream financial service providers. A recent World Bank study shows...
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