Financial Health

One can be financially included, but not financially healthy.

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What is Financial Health?

Financial health is a state of being in which people can meet current needs, absorb financial shocks, and pursue financial goals. It not only encapsulates the objective, tangible aspects of financial lives, but also captures emotional aspects intricately linked to well-being. Financially healthy people feel secure about their finances.

Financial Health Outcomes


Financial security is the ability to meet current and ongoing commitments, including basic needs and planned expenses such as food, rent, bills, debt payments, and health care. It also includes expenses earmarked for the future, such as saving for old age, and higher education costs.


Financial freedom represents a financial condition beyond financial security. It is also more subjective than financial security as it emphasizes individual financial goals and things one values.


The ability to feel in control of one’s finances, with no or limited financial distress. Financial control is a subjective measure of financial health because the feeling of ‘being in control’ or stressing can vary for individuals and households, despite similar financial conditions.


Financial resilience is the ability to respond to and recover from shocks. This addresses the ability to manage unexpected or adverse events, such as car breakdowns, job loss or sudden health emergencies.

Why Financial Health?

Financial health goes several steps beyond inclusion and access

Access to financial services is the start of a pathway towards better financial outcomes, but it is not the end of the journey. Being financially included does not imply that people have the ability and agency to manage day-to-day expenses, save for financial emergencies, and have control of their financial life.

Financial health starts by diagnosing people’s financial conditions to identify what drives or inhibits growth in their financial lives. Consequently, financial health offers solutions to policymakers, businesses, practitioners, and innovators that impact people’s immediate as well as external environment. As a result, financial systems adapt to people’s context providing them with tools to unlock financial goals.

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Financial health is the guiding star for financially stable and resilient economies

Measuring financial health can help accelerate customer-centricity, rationalise financial behavior, enhance savings, increase work productivity, and boost shareholder value. It serves as a multi-faceted tool for policymakers and businesses alike.

By using a combination of transaction and consumer data, financial health measures can inform economic policies, financial regulations, and business strategies to build financially stable and resilient societies. This nuanced alternative measure also offers intermediate outcomes to realization of the SDGs.

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Financial health shifts the spotlight from product to people

Financial services can be a power-booster for people on their journey of financial health. However, if not designed or delivered appropriately– and for that matter used suitably–financial services could have a significant negative impact on people’s financial health.

The lens of financial health outcomes, however, allows people to take stock of their resources, examine their limitations and unbox their capacities. Combined with financial tools, this internal appraisal makes way for adoption of healthy financial behaviours that help improve financial outcomes.

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Financial Health is anchored in individual and institutional context

From individual characteristics, such as financial capability and psychological biases, to broader socio-economic factors like gender and social norms, availability of work and social safety nets—these all influence the financial health of people.

This context-led understanding paves way for design of customer-centric policies, business strategies, financial products and consumer-protection mechanisms that improve financial outcomes for individuals and institutions at play.

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How we progress on the journey of financial health

Building coalition for an inclusive, systems-led change

The UNCDF-Centre for Financial Health is a convening platform that brings together global and local stakeholders in the public and private domains to form a coalition. The coalition aims to build financially resilient and stable economies, especially in LDCs by strengthening the financial health evidence and narrative.

The Centre facilitates a common platform for policymakers, businesses and practitioners to design relevant tools, services and infrastructure that advances financial lives of all, with a focus on low-and-moderate-income population.

Generating evidence through experiments and partnerships

We engage with low-and-moderate income populations across regions while maintaining a “test and learn” culture to build evidence and learn through cross-country collaboration on financial health. Our Living Labs tackle on-ground challenges by creating the infrastructure for stakeholders to design and refine solutions, scale-up those that work and mobilise an ecosystem for sustained action.

Using data and measurement to aid design

Tracking financial health of populations and generating insights on people’s behaviours is key to designing policy or regulatory tools that aid achievement of SDGs, sustaining a growing financial sector and crafting consumer-centric strategies.

Our global financial health dashboard provides country-specific data that enables monitoring of global progress on financial health and make cross-country comparisons to identify areas of policy priority.

Data from our research provides design insights to develop relevant metrics for defining, measuring, and tracking financial health in different context. It further aids policy and business strategies in improving financial health for people.

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What’s in it for the private sector, policymakers and development community?

Policymakers & Regulators

For governments and public institutions, financial health is a key objective reflected in their broader mandates to ensure the safety, productivity and welfare of their citizens. A financial health lens is useful to formulate and enforce financial policies and regulations and drive public initiatives such as responsible financial education, customer protection, job security and social safety mechanisms that improve the financial health of individuals and communities.

Financial Service Providers

For financial institutions, fintechs and others developing financial solutions for customers, financial health is a fresh lens with which to examine people's needs and goals, and whether interventions are in fact improving their lives. This kind of approach has both a social and commercial benefit, allowing organizations to build more financially healthy customers, and as a result, the financial health of their institutions.

Donors & Development Partners

For the development community that has been focused on impacting customers' lives through financial inclusion or the provision of affordable financial services, the financial health approach can offer a larger and more comprehensive perspective to measure, create and sustain impact. A financial health lens is needed to revisit and recast our efforts with financial inclusion, and to understand what products, in what bundles and in what settings, contribute to the financial health of customers.