Small but mighty: CGAP and the future of financial inclusion

By Greta Bull


After six years leading CGAP, it is time for me to move on. As many of CGAP’s partners know, I am leaving to take up a new role at the Bill & Melinda Gates Foundation focused on women’s economic empowerment — an exciting area that will allow me to apply the many lessons I’ve learned from 15 years in the inclusive finance space to an entirely new set of challenges.


Photo: CGAP

I write this from just outside of Cape Town, as South Africa enters a new round of COVID-19 restrictions. This latest lockdown serves as a sobering reminder that we are nowhere near the end of this pandemic. For me, it also creates some space to reflect on the changes that have taken place in my six years at CGAP and, particularly, how the pandemic will shape the future for all of us.


So I’d like to take this opportunity, in my last CGAP leadership essay, to share some thoughts with you on the post-pandemic future of financial inclusion.

Let’s start with the damage this pandemic has had on the lives of the poor…

At the end of 2019, the world was experiencing the longest period of sustained growth and improvement in human welfare in history. From 1999 to 2019, the number of people living in extreme poverty worldwide fell by over a billion, and global growth prospects looked strong heading into the 2020s. But, as we all now know, there was trouble brewing in the form of a novel coronavirus.


I can remember being at a meeting in Paris in February of 2020, listening to a podcast about the impact of COVID-19 in Wuhan, and only then beginning to understand that it might have anything to do with my life. It turns out, my flight home from Paris was the last time I got on an airplane to cross an international border until I came to South Africa several weeks ago.


That tiny virus has changed the lives of every person on the planet in profound ways. And that impact will reverberate in emerging markets for many years to come.


We know that the COVID crisis is having a devastating impact on emerging markets and will likely continue to do so until the pandemic is fully under control, which may take several years. The World Bank’s latest estimate is that as many as 97 million people fell back into extreme poverty in 2020. This is an enormous setback. COVID-19 will wipe out five years of progress toward ending extreme poverty. Just to give you a sense of how severe this crisis is, take a look at the chart below. It shows an estimate from our colleagues in the Poverty Global Practice at the World Bank of the steady progress we have made in reducing extreme poverty since 1992. Each of the bars below the line represents the number of people who moved out of poverty that year. Numbers above the line are the people who fell back into poverty. Although the 2020 number in the chart below has been adjusted slightly downwards in the Bank’s most recent projections, 2020 still dwarfs any prior setbacks.

Annual Change in the Number of Extreme Poor: 1992-2020

Source: CGAP | Lakner et al. (2020) (updated) | PovcalNet | Global Economic Prospects

As is well documented by now, the impact of the pandemic is being felt disproportionately by women. Analysis by McKinsey, based on data from the United States and India, suggests that women were 1.8 times more likely than men to have lost a job due to the pandemic. And more recent analysis by the World Bank suggests that job recovery for women has been considerably slower than that for men. We are also seeing this pattern play out in small business. A survey by the World Bank found that women were significantly more likely than men to close a business as a result of the crisis. Latin America, South Asia and Sub-Saharan Africa all experienced both high levels of firm closure and significant gender gaps. There are many potential reasons for this, but high among them are women’s overrepresentation in sectors most affected by the crisis, disproportionate caregiving responsibilities, and social norms that prioritize men as breadwinners over women when work is scarce.

Business Closure by Gender (Regional Breakdown)

Source: CGAP