When Inclusion Becomes a Warning Signal
The subject here is the relationship between financial inclusion—especially the expansion of credit to new borrowers—and financial-system stability. The practical question is not whether inclusion is good or bad. It is when the form and context of inclusion change what it tells us: when wider access is opening useful opportunities, and when rapid borrower growth is arriving alongside a credit boom that may precede financial distress.
That question matters because the world is experiencing a genuine inclusion success. The World Bank’s Global Findex Database 2025 records how adults use financial services, phones, and the internet, while an IMF working paper examines what happens when the borrower base expands quickly. One source shows the reach and lived use of finance; the other asks whether a particular pattern of credit expansion can serve as an early warning. Together, they offer a way to examine inclusion without reducing it to either a development slogan or a source of fear.
The development success is real—but it is not the whole story
Financial accounts have become much more common. In 2024, 79 percent of adults worldwide had an account at a bank or similar financial institution, with a mobile-money provider, or with both. That was up from 51 percent in 2011. In low- and middle-income economies, account ownership reached 75 percent. Mobile phones and mobile-money platforms helped drive the change by making it possible to offer payments and savings services beyond the reach of a traditional branch.
The scale of digital connectivity explains why this matters. The 2025 Findex survey found that 86 percent of adults worldwide owned a mobile phone, including 84 percent in low- and middle-income economies. A phone can reduce the distance to a financial service, allow an account holder to receive or send money, and make small, frequent deposits more practical. In Sub-Saharan Africa, 40 percent of adults had a mobile-money account in 2024; in Latin America and the Caribbean, the share was 37 percent. These are not merely technology statistics. They describe the infrastructure through which people can save, receive payments, manage a shock, or obtain credit.
The benefits are concrete. An account can store money more securely than cash kept at home, create a record of transactions, and make payments faster or cheaper. Mobile services can let a person save in small amounts without travelling to a bank. They can also support loan disbursements and repayments. This is why the warning-signal question must be framed carefully. A concern about financial instability should not erase the fact that reaching people who were previously expensive or difficult to serve is itself a major development achievement.
But the aggregate success hides a large unfinished problem. About 1.3 billion adults worldwide still lacked an account in 2024. In low- and middle-income economies, poorer adults were less likely than wealthier adults to have accounts, and women remained less likely than men to do so. A person may own a phone but lack a SIM registered in their own name, reliable internet, an affordable smartphone, identification, or the confidence to use an account independently. Inclusion can expand while its benefits remain distributed unevenly.
The diagram is a map of relationships, not a claim that every account becomes a loan or that every concurrent boom becomes a crisis. Its purpose is to keep separate layers visible: the conditions that enable access, the uses that make access economically meaningful, the growth of the borrower pool, and the outcomes that may reveal either resilience or strain.
Five different things hide under the word “inclusion”
The first distinction is between access and use. Owning an account says that a person has a channel through which money can be stored or payments can be made. It does not say how often the account is used, what it costs, whether it helps the owner cope with a shock, or whether the owner understands its terms.
The second distinction is between financial uses. In low- and middle-income economies, 55 percent of adults reported saving in the previous year, and 40 percent saved formally through an account. Digital payments reached 62 percent of all adults and 82 percent of account owners. Borrowing looked different: 59 percent borrowed in some form, but only 24 percent borrowed formally from a bank or similar institution, through a credit card, or through a mobile-money provider. Formal saving, digital payments, and formal borrowing therefore should not be treated as interchangeable signs of progress.
Credit requires particular care because the survey does not observe everything that determines whether a loan is helpful or dangerous. It records whether someone borrowed, but not the amount, interest rate, duration, collateral, repayment burden, or whether the person took on more debt than they could sustain. A higher formal-borrowing rate might reflect productive investment, emergency consumption smoothing, or expensive short-term credit. Without the terms, the same headline can support very different interpretations.
The third distinction is between use and financial health. The World Bank defines financial health through four abilities: meeting needs and obligations, pursuing goals, coping with financial shocks, and feeling confident about one’s financial life. By that standard, account ownership is an important means, not the final result. In 2024, 56 percent of adults in low- and middle-income economies could obtain emergency money without much difficulty, but only 34 percent could cover more than two months of expenses if they lost their main income source. Monthly expenses and medical costs were the most common sources of financial worry.
These figures do not mean that accounts failed. They show why inclusion should be judged against the conditions people face. A useful account can make saving easier and payments safer, yet a poorly designed credit product can add a fixed repayment obligation to a household that has little buffer. A digital channel can reduce the cost of reaching a borrower, yet the same speed can make it easier to extend credit before a lender has adequate information about repayment capacity.
The fourth distinction is between the growth of the borrower base and the growth of credit to existing borrowers. The IMF paper calls the former “credit inclusion”: an expansion in the number of people or loan accounts connected to commercial-bank credit. That is the extensive margin—more borrowers entering the system. Aggregate credit growth can instead reflect larger balances for borrowers who were already inside it, the intensive margin. The two can move together, but they do not mean the same thing.
Why context changes the meaning of borrower growth
The IMF evidence focuses on what happens when these two forms of expansion meet. Its working paper uses a country panel and asks whether rapid credit inclusion is more likely to precede financial distress when the economy is already experiencing a credit boom. The central result is conditional: rapid credit inclusion on its own does not usually signal future instability, but it becomes much more informative when it coincides with rapid growth in aggregate credit.
That finding is a more precise claim than “financial inclusion causes crises.” It says that the surrounding state of the credit system changes the meaning of the same movement in the borrower base. Outside a broad credit boom, bringing more people into formal credit may improve diversification or give households and firms useful access to finance. Inside a boom, the same rapid expansion may indicate that lending standards are loosening, that lenders are reaching progressively riskier borrowers, or that an asset-price upswing is inflating collateral values. Those are possible mechanisms, not all-established conclusions of the study.
The distinction also changes the practical question. Instead of asking whether policymakers should promote inclusion, they should ask what is expanding, how quickly, for whom, and under what credit conditions. If account ownership is rising because mobile services make small savings deposits and payments easier, the main task may be to preserve affordability, reliability, and consumer protection. If the number of new borrowers is accelerating while private credit is already far above its normal trend, the appropriate response is more investigative: examine underwriting, repayment terms, concentration, nonperforming loans, and the buffers available to households and banks.
The evidence has limits that make this judgment more disciplined, not less useful. The Global Findex is a demand-side survey of about 145,000 adults in 141 economies conducted in 2024. It provides broad information about reported behavior and experience, but it does not explain why a country’s figures changed. The IMF study uses more frequent, narrower data on borrowers, loan accounts, private credit, and stability outcomes, but its results are predictive associations. Neither source, by itself, gives a real-time causal diagnosis of a country’s lending system.
That is the foundation for the rest of this series. It will first examine the infrastructure that makes inclusion scale, then the ways people use accounts and the gaps that remain. It will then reconstruct the IMF’s definitions and evidence, interpret why the interaction between borrower growth and a credit boom matters, and ask what additional safeguards are needed before a statistical signal becomes a policy response. The goal is not to choose between inclusion and stability. It is to learn how to pursue the first without ignoring the conditions that can put the second at risk.