Is Financial Inclusion a Proxy for Continuously Improving Living Conditions?

Abstract

One of the outstanding characteristics of the current stage of world capitalism is the ubiquitous presence of finance regulating forms of accumulation. This chapter article focuses on the debt of households. The ability to borrow within the limits of one´s own financial capacity may improve people´s living standards, allowing access to services that would otherwise be out of reach; and it may play a role in activating and supporting the economy. The narrative of financialisation contains the explicit assumption that financial inclusion leads to the realisation of borrowers’ human rights and that, in turn, an increasing volume of financial resources available to individuals and households is paralleled by the continuous improvement of their living conditions. There are two aspects that lead us to question that assumption. First, the fact that private debt can not only be the cause of human rights violations but also their consequence: poverty, inequality and States not ensuring the realisation of economic and social rights in a context of increasing financialisation of public goods push people into private debt. Second, the scale of over-indebtedness, abusive contractual terms and collection practices which become a burden and a threat for individuals or households, potentially quickly turn into a trap for many, putting the realisation of human rights in jeopardy.