This report examines the concepts of financial literacy and capability as they are used in developing countries. Financial inclusion is about increasing the set of financial service options available so as to enhance the value of finance. The concept of financial capability seeks to capture the idea that their effective use will lead to improved wellbeing.

This report will present Sen’s capability approach and argue in favour of a well-being perspective on financial capability and inclusion. Additionally, the report considers how this capability-based approach to financial inclusion is in line with a broader perspective on financial decisions and money management evident in research of economic
anthropology and sociology.