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Financial Inclusion: A Key Social Policy Issue for a Cohesive Ireland
A recent study by Trinity College’s Policy Institute and funded by the Social Inclusion Division, Department of Social Protection, has highlighted the importance of financial inclusion in Ireland. The report, “Understanding and Combating Financial Exclusion and Overindebtedness in Ireland: A European Perspective,” emphasizes the need for a more inclusive financial sector to address poverty and social exclusion.
Access to Basic Banking Services
According to the study, every citizen needs access to basic banking services such as current accounts, debit cards, and credit facilities to lead a normal life. However, Ireland has one of the lowest levels of access to these services in Western Europe, with some individuals relying on moneylenders for credit and an increasing number facing overindebtedness.
Challenges and Recommendations
Financial inclusion is a complex issue that requires reconciling the interests of low and moderate-income people with those of banks. The study provides guidelines on how Ireland can promote financial inclusion by building on its current strengths while learning from experiences in other European countries.
- Make it compulsory to receive social benefits and wages through a bank account
- Provide basic banking services at no cost
- Cap charges for customers who break terms of their contracts
- Ensure alternative financial responses when consumer credit is not suitable
- Promote responsible lending practices by regulating prices and arrears management
Addressing Overindebtedness
The report recommends addressing overindebtedness through a personalized, comprehensive, and gradual approach involving:
- Commercial negotiations
- Amicable collective debt settlement procedures
- Judicial collective debt settlement procedures
Conclusion
Financial inclusion is a critical issue for Ireland, and this study provides valuable insights into how we can promote access to basic banking services and responsible credit practices. By addressing these issues, we can help reduce poverty and social exclusion, and create a more cohesive society.
About the Author
Dr. Georges Gloukoviezoff, the author of the report, specializes in financial inclusion and has been involved in numerous research projects at national and European levels. The report is the 26th publication in the Policy Institute’s Studies in Public Policy series, which aims to provide rigorous but accessible analyses of policy issues.