The need to promote financial health has become particularly evident amidst the financial and economic impact caused by the COVID-19 pandemic. This global crisis has exposed not only the vulnerability of those who are excluded from the financial system but also the need to ensure that those who are included can actually benefit from using financial services. These developments demonstrate a need to work toward financial health in the context of promoting financial inclusion.
But what, exactly, do we mean by financial health? How do we measure an individual’s financial well-being? And how can we promote financial health at a policy level? With these questions in mind, H.M. Queen Máxima of the Netherlands, in her capacity as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), recently launched a Financial Health Working Group. This group of leaders from financial and development sectors will work together to develop a shared vision and direction for how the UNSGSA and her partners can advocate for key decision makers to use the lens of financial health to look at outcomes, instead of only access and usage of financial services.
The members of the group represent a wide range of organizations and companies, which include the Centre for Financial Regulation & Inclusion (Cenfri), Financial Health Network (FHN), MetLife Foundation, Aspen Institute, Commonwealth Bank of Australia (CBA), United Nations Capital Development Fund (UNCDF), Bankable Frontier Associates (BFA), Consultative Group to Assist the Poor (CGAP), ING Global, Development Bank of Latin America, Mastercard, and the World Bank Group.
During the group’s inaugural meeting, held virtually on December 15, members and Office of the UNSGSA staff agreed to collaboratively work toward developing a shared vision of what financial health means and how to measure it. They also discussed how to raise the profile of financial health as a policy concern and enhance the implementation of financial health initiatives around the world.
Future topics for discussion will include how to promote financial health at a policy level, lessons learned from the pandemic, financial innovations that support financial health, and the relationship between financial health and financial inclusion. Through these discussions, which will incorporate a variety of perspectives from policymakers, financial services providers, donors, and development experts, the working group aims to make recommendations for key advocacy messages and set actionable goals to incorporate financial health into national and global development agendas, including the UN Sustainable Development Goals (SDGs).