Asia Needs More Access to Financial Services to Grow

IMF Blog, September 18, 2018

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Expanding access to financial services in Asia will raise growth, and reduce poverty and inequality.
Financial inclusion enables people and companies to open checking accounts or establish lines of credit, improving borrowing, savings, and spending management.

Despite rising use of ATMs and mobile banking, wide disparities in access and usage of financial services persist across Asia.
Gaps are especially large between rich and poor, rural and urban populations, and men and women.
Example: In India, only about 52 percent of male adults from the poorest income group have a bank account, compared to 80 percent from the highest income group.
Geography, financial sector structure, and policies also contribute to the banked/unbanked gap.
In lower-income countries like Myanmar and Nepal, less than 40 percent of households have a bank account.
The fintech gap between rural and urban areas in Asia is one of the world’s largest.

If all Asian countries with poor access improved to the level of Thailand, poverty in the region could fall by about 4 percent or around 20 million people.
Expanding access to financial services to the level of Singapore could reduce measured income inequality by as much as 10-20 percentage points from the current level of 30-43 percent.
If Lao PDR reached Thailand’s level of financial inclusion, income inequality would drop by five percentage points—reaching a level not observed since 2002.
Financial inclusion can improve the effectiveness of macroeconomic policies by increasing the efficiency of public spending (for example, enabling governments to send transfers and payments directly to personal and business accounts), potentially freeing resources for pro-growth social spending.

Fintech can spread financial services more broadly and effectively because of cost savings and improved accessibility.
China: 61 percent of the population made digital payments in 2017, accounting for 55 percent of total mobile payments in the region.
Other countries using fintech include Bangladesh, Cambodia, Indonesia, and Malaysia.
The region is a major center for mobile money service providers and users, second only to Sub-Saharan Africa.
Pacific Island countries such as Fiji, Samoa, Solomon Islands, and Tonga increasingly use mobile technology to access basic financial services, helping to bypass infrastructure and geographic barriers to traditional banking.

There is no one-size-fits-all policy; countries need country-specific combinations of policies that balance fostering innovation and maintaining financial stability.
Encourage social experimentation and public-private partnerships (examples: microfinance in Bangladesh; mobile payment growth) to deepen and expand access.
Continue reforms to reduce the cost of financial services and encourage integration of the unbanked into the financial sector.
Design and price financial service products appropriately for widespread usage, especially for low-income populations (example: Samoa’s National Financial Inclusion Strategy).
Learn from both large and small countries’ experiences to identify the right set of policies for each country.

Source: Asia Needs More Access to Financial Services to Grow (IMF blog post, September 18, 2018)

亚洲需要进一步普及金融服务来促进增长; IMF blog; 2018 年9 月18 日
- 亚洲需要进一步普及金融服务来促进增长; IMF blog; 2018 年9 月18 日 (Markdown version)
- 亚洲需要进一步普及金融服务来促进增长; IMF blog; 2018 年9 月18 日 (PDF)
アジア経済が成長するためには、金融サービスへのアクセスを拡大する必要がある
- アジア経済が成長するためには、金融サービスへのアクセスを拡大する必要がある (Markdown version)
- アジア経済が成長するためには、金融サービスへのアクセスを拡大する必要がある (PDF)