Access to financial services is essential in our lives and is stated as a right under the European Pillar of Social Rights. However, financial exclusion remains a massive problem in Europe. Vulnerable groups of people who lack the financial means, documentation, or the capabilities to access financial goods are most at risk of exclusion. In fact, according to a World Bank report, 75% of unbanked people live in poverty. Some of the vulnerable groups affected by financial exclusion include overindebted, homeless, (long-term) unemployed, elderly, migrants, Roma, and prison inmates, among others.
With the Corona outbreak, the situation has worsened for many people already financially excluded or living with debt before, as they are not adequately covered by a social safety net. Achieving financial inclusion means opening access and appropriate use of mainstream financial products needed to live in a society to all people, enabling full social participation and the achievement of social cohesion. Thus, it must be promoted and protected at European level, as it is key to reducing poverty and boosting prosperity.
This report aims to outline some of the main barriers to accessing financial services for marginalised groups and identifying key financial inclusion elements. Equally, it reflects on the widened income gaps and the danger of increasing inequalities due to COVID-19, focusing on our members’ role and experience in addressing these topics on the ground. Finally, some policy recommendations are proposed.
For more information, please read the full report.