In a new working paper on financial inclusion and fintech in CAREC, our staff discuss financial inclusion as an imperative to achieving economic growth in a globalized market, and as an essential element to accomplish important objectives, such as poverty alleviation, anti-corruption measures, employment, social equity, and wealth redistribution. It examines the potential of financial technology (Fintech) for accelerating financial inclusion level, and discusses prospects to widen the net of financial services in the CAREC region.
The paper provides that many CAREC member states lag behind in provision of services and infrastructure that are critical to increasing financial inclusion, and their digital adoption is among the lowest in the world.
The author provides best practices of the People’s Republic of China (PRC) and Kenya and suggests that elevating levels of trust in the banking and financial sector and bridging the access gap necessitates multi-faceted policy measures by the governments. The leadership role of the latter as a sovereign of last resort should be conspicuously seen to reinforce people’s trust in the financial products offered by the private sector. Targeted efforts on the part of the governments would help ensure equitable provision of financial services across gender, income groups, and age groups. Suggestions include that CAREC member state governments have to lead through policy responses that invest in quality digital infrastructure, enable regulatory environments, build trust in financial services providers by protecting consumers and optimizing their experience, and incentivize the private sector.