Barriers to Inclusive Capitalism

by Douglas Flint, Group Chairman, HSBC Holdings plc

What is the main barrier to achieving inclusive capitalism? Inclusive capitalism means ensuring that the widest possible population - of both people and firms - has access to the financial system.

The key barrier is that about half of the world's population - well over two billion working-age adults - still does not have any form of bank account. The challenge isn't confined to individuals: around 400 million MSMEs (micro, small and medium enterprises) have unmet financial needs.

Access to the financial system enables households to invest in goods, home improvements or education. Loans help businesses expand. Insurance helps them manage risk. Access to financial services also increases economic empowerment, particularly of women.

But we have to balance the goal of providing access to the largest possible number of people with the need for a safe system. In general, it is better to have people, companies and even countries inside the regular, and therefore regulated, financial system.

The political will exists to meet these challenges. National regulators, the IMF, the World Bank and the G20 are all considering ways and means of tackling the barriers that exclude individuals and businesses from the financial system.

The financial services industry also understands its obligation to take action. For 150 years HSBC has connected customers to opportunities, enabling businesses to thrive, economies to prosper, and helping people to realise their ambitions. Anything that expands opportunity, increases ambition and encourages entrepreneurship is fundamentally good for business.

We have the opportunity to strike a balance between a safe system and one that works to deliver inclusive capitalism. Policymakers, regulators and lenders of every kind all have a part to play in making this happen.

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