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Despite three decades of innovation in financial services for the poor and an unprecedented global expansion in access, the potential of finance to reduce poverty, foster entrepreneurship and improve well-being has yet to be fully realized.
The challenge is to design financial products that meet the needs of low-income populations while ensuring the sustainability of financial providers. Government loans for the poor often meet with high default rates, while insurance products encounter very low take-up. Despite the promise and popularity of microfinance, recent studies have shown that the standard microloan fails to significantly reduce poverty and the most recent numbers show a first-ever decline in the number of microfinance borrowers globally. After decades of invention and investment in the sector, half the world’s adult population – and 77% of those living on less than $2 a day – still are without a single account with a formal financial institution.
Rethinking Financial Inclusion: Smart Design for Policy and Practice, Harvard Kennedy School's newest Executive Education program, will explore frontier issues in finance for the poor and address challenges faced by both low and high-income countries. The program will combine an evidence-based approach to understanding the market for finance and client needs with theoretical insights on how to design financial products to meet those needs.
Convening strategic thinkers from the public, private, and nonprofit sectors, the program will provide a conceptual framework for policy and product design, enabling participants to: