Dissatisfaction Theory of Financial Inclusion

Abstract In explaining the cause of financial exclusion, dissatisfaction with the formal financial system stands out as a possible cause of financial exclusion according to the dissatisfaction theory of financial inclusion. This article revisits the dissatisfaction theory of financial inclusion and extends the theory by providing an elaborate discussion of (i) the relationship between customer dissatisfaction and financial inclusion using a grid; (ii) the sources of customer dissatisfaction; and (iii) ways to deal with customer dissatisfaction. The theory argues that previously banked adults who left the formal financial system and have become unbanked again can be brought back to the formal financial sector through persuasion if the element of dissatisfaction has been removed or resolved. The theory is significant because it explains one of the major reasons why people leave the formal financial system despite the availability of formal financial services and ease of access to financial services in the financial system.