Are you financially excluded?

Do you receive your salary in your bank account? Do you have insurance for your car or your property? Do you have a mortgage or a credit card? If you answered yes to any of these questions, that means that you are most probably ‘financially included’. However, this is certainly not the case for everyone across the EU.

On November 20, the annual convention of the European Platform Against Poverty and Social Exclusion (EPAP) held a workshop on financial inclusion, which Social Platform and our member Eurodiaconia participated in.

We learned five key elements of financial inclusion:

  1. Financial inclusion is about creating access for all to quality financial services at the right time, in the right way and at the right affordable cost.
  2. Over-indebtedness needs to be addresses through policies, not by individuals. Commission research shows that macroeconomic policy, poverty and unemployment play larger roles in over-indebtedness than personal reasons.
  3. Over-indebtedness is linked to the overselling of services, rather than over-borrowing of services. This is why financial education is important not only for the beneficiaries of financial services, but also for the organisations offering financial services so that they do not sell their services to people who do not need them or are not suited to them.
  4. Many civil society organisations are working with the consequences of financial exclusion and over-indebtedness, and have made proposals to address the issue structurally, at its roots. They should therefore be involved at EU and national level, in partnership with financial institutions and public authorities, to establish measures and pathways to prevent and tackle financial exclusion and over-indebtedness.
  5. In order to avoid pushing vulnerable people further into debt and exclusion, debt should be restructured and existing practices regulated. The European Commission should encourage member states to develop their regulation of this issue. It should also support interest-free grants to NGOs to practice social debt restructuring.