The access to credit is a fundamental human right

Four years ago, I shared a post on LinkedIn where I asserted that financial inclusion should be a fundamental human right. Years later, I still think so. Let me tell you why.

My argument stems from the fact that if someone is excluded from the financial system, it adversely impacts their access to opportunities and ultimately, their chance at survival. People can die from being excluded. It might sound overly dramatic to some but it’s what it is. I don’t believe that financial inclusion and access to credit are privileges that should be reserved for a select few; they’re rights everyone should have for a fair chance at a decent life.

Access to credit is a life and death determinant.

Let’s talk about human rights …

The basic decency of being human is enshrined in certain rights, yes? We know this, even without them being codified. But living with consciousness of these rights—not murdering anyone, treating people with respect, etc.— is basically what sets us apart from animals. And even to a certain extent, some animals treat themselves well. If you notice that the higher the animal is in the chain in terms of what we perceive as intelligence, the better they seem to treat themselves. 

Throughout history, from the ancient Greeks, Romans and Egyptians, to the modern world that we live in, the respect for basic human rights is what really creates a cohesive and organized civilization and once those rights start getting trampled on, what you see is a disintegration of society.

The United Nations, in the Universal Declaration of Human Rights (UDHR), defined certain fundamental human rights which include the right to life and liberty, freedom from slavery and torture, freedom of opinion and expression, the right to work and education, and many others. Everyone is entitled to these rights, without discrimination. And if we take a closer look at it, when a person breaks certain laws, they violate these rights e.g. if you kill someone, you take away their right to life, etc.

But as the world evolves, the conversation about what constitutes harm to others is becoming more nuanced. So it means that you may not need to kill someone by inflicting physical harm on them but if you take away their ability to operate and restrict them in some non-physical way, you can still be responsible for their death. 

For example, if you were hurt and I took away any means for you to contact emergency services and you died, would it be accurate to say I caused your death? Yes. But did I touch you? No.

In some western countries, emergency numbers are typically programmed to work even when your phone is without a network or even if you don’t have an active call plan. So if a hacker cuts off access to 911, resulting in any deaths, such a person could easily be prosecuted for murder or manslaughter. That’s how sacrosanct the right to life is.

What do human rights have to do with financial inclusion?

In the world we live in today, without access to financial services and credit, it’s quite difficult, almost impossible even, for the average person to lead a good life. That’s the truth. I share my views about this quite often and I know I’m not crazy for thinking this. 

Kumar (2014) built on Muhammad Yunus’ position to assert that if poverty is the absence of all human rights, then it means there is a case for considering access to finance or credit as a human right. This author also submitted that access to adequate and affordable finance has been recognized as an effective tool to realize the objective of inclusive economic growth yet, finance has rarely been connected to the robust discourse on human rights issues. I agree.

Think of it like the hierarchy of needs for the times we live in. It’s all interwoven. At the basic level, you have the infrastructure,then on top of that, you have telecommunications and financial services and finally, access to a decent life.

Take a look at the countries we call successful. The countries we all want to emigrate to sometimes, the ones in OECD with high rankings in human development, even though access to credit and financial inclusion may not be explicitly defined as rights and key drivers of their prosperity and high quality of life, it’s implied. In a way, one might even argue that the recognized human rights support a justification for financial inclusion to be accepted as a fundamental right.

A place like the UK doesn’t even have a written constitution, but the laws are still there, silently doing their job. Similarly, in the developed nations, financial inclusion and access to credit are a given. It’s not something you can take away—it’s woven into the very fabric of their society; just as easily as the rights to life or freedom of expression and all other expectations that make us human and set us apart from animals..

This issue is similar to how climate change issues have always been there but now it’s in the limelight and it’s got everyone’s paying attention. This is the level of seriousness and attention with which people having access to basic financial services and credit as a fundamental human right, should also be treated. This is even more crucial for the less developed countries than the developed ones.

We need to make it clear for everyone. Defining access to financial services and credit as a basic right elevates it to a level of consciousness where people understand that it’s not a privilege; it’s crucial for anyone to have a meaningful life. Leaders and regulators need to understand that you shouldn’t play with financial inclusion the same way you don’t play with healthcare.

People also need to know that this is their right and make demands.This isn’t about entitlement, it’s about what people deserve. On the flip side, people also need to recognize what they owe in return. Just like you have a right to free speech but a responsibility not to spread lies or incite violence; having access to financial services and credit comes with a responsibility to meet your financial obligations and pay back your loans. 

Basic vs. elective financial services

In moving from the theoretical to the practical aspect of this; a few details will need to be sorted out. Enforcing financial inclusion as a basic right isn’t as simple as just giving everyone access to every financial service/product ever created. Obviously, we’d have to determine what’s essential for a meaningful life without overdoing it.

This can be a slippery slope. But at the minimum, people should have the basics covered; they should be able to open and operate bank accounts without restriction; have access to basic savings products; be assured of privacy where their transactions are concerned, and have access to insurance to protect them in the face of unforeseen challenges that affect their lives or livelihoods. We can then consider everything else as elective services that can be reserved for those interested or those considered to be eligible.

I should also explicitly state that credit is a must .. duh. People should have access to credit with a reasonable debt-to-income ratio (DTI) where only about 35% of their income goes to servicing their debts so it doesn’t overstretch their finances. There has to be a line between throwing people a lifeline when they’re drowning and throwing them an anchor. 

Adopting these rights means that people should be able to trust the financial institutions and service providers that deliver these solutions to keep their money safe. These institutions need to have assets to guarantee that customers are protected and the regulators have to ensure that no bad guys or fraudsters are there to cart away with their savings.

I’m not clairvoyant but trust me when I say if we can crack this, life will become so much easier for everyone.