Financial Inclusion and Domestic Debt Mobilization in Developing/Underdeveloped Economies: Leveraging Banks, Sovereign Bond Investment Savings Accounts, and Microfinance

Developing and underdeveloped countries face dual challenges: large unbanked populations and limited domestic savings for government financing. This paper examines a policy model in which banks, leveraging microfinance channels, offer Sovereign Bond Investment Savings Accounts (SBISAs)-no-fee, simple, tax-incentivized savings instruments invested in government securities. By combining microfinance outreach, mobile banking, and government-backed incentives, the model expands financial inclusion while mobilizing domestic resources for sovereign debt. Simulation results, policy recommendations, and implementation strategies are discussed.