Poverty Outreach and Reduction

Poverty outreach and reduction is at the core of financial inclusion, as 2.5 billion people lack access to formal financial services. Access to a range of financial services can help poor people save, plan for the future, handle crises, and manage their complex financial lives. Access to financial services alone does not reduce poverty, but it plays a significant role.

Few financial institutions have systems in place to measure poverty outreach, although there are several social performance management tools used by microfinance institutions that help them target poor customers and measure changes in the poverty level of those they serve. At the macro level, data, such those collected in the World Bank's Global Findex database, help to measure progress toward financial inclusion and the impact it has on overall poverty reduction.

A man in his shop. Photo by Probal Rashid, 2014 CGAP Photo Contest.