The financial services industry encompasses a wide range of economic entities that manage money. It includes everything from investment firms, credit unions and banks to retirement and insurance companies.
A healthy financial services sector helps people get the funds they need to buy homes, cars, education, and other items. It allows them to save for their future and safeguards their property and health through insurance. It provides millions with good-paying jobs, allowing them to build their own businesses or provide for their families.
The government also benefits from a healthy financial services sector. Through the money market and capital markets, it raises short-term funds to meet its revenue and expenditure needs. It can even raise long-term funding through the securities and foreign exchange market.
Investors also benefit from a healthy financial services sector. Private equity funds, venture capital providers and angel investors supply investment capital to small and medium-sized businesses in exchange for ownership stakes or profit participation. In addition, commercial banks offer loan financing for business expansion and acquisitions.
For many years, the global development community has debated how to best improve the lives of poor people through financial inclusion. In response to this debate, CGAP has developed a nuanced and clear impact narrative that highlights the potential pathways through which financial services can help poor people build resilience and seize opportunities.