Also available in: Tiếng Việt
It’s nighttime and the streets are bustling in Vietnam’s cities and towns. Buoyed by years of strong growth, the country has a burgeoning middle class with purchasing power to sustain restaurants and cafes, full and open late into the night, busy retailers and a high penetration of mobile phones – more than one per person. The economy, however, continues to run on cash and a majority of adults still don’t have formal financial services such as a basic transaction account. Moving to a “non-cash” system is a priority for the government to increase efficiency, promote business and economic development and reduce poverty including in remote rural areas where traditional financial providers have difficulty reaching.
Since 2016 the State Bank of Vietnam, the country’s central bank, has been partnering with the World Bank Group on a comprehensive approach to financial inclusion which will result in a national financial inclusion strategy. While still in development, several key elements of the strategy are clear: a focus on digital finance including shifts in government payments to digital products and platforms; providing financial services to rural and agricultural communities and ethnic minorities, where growth has lagged and poverty rates are above the national average; and strengthening consumer protection and financial education so that the next generation of consumers are prepared for a modern financial marketplace.
Last month, I traveled to Mexico to attend the launch of the country’s national financial inclusion policy.
The launch was an important milestone for the country, since just 44% of adults have access to a financial account, according to Mexico’s latest national survey on financial inclusion. The policy outlines a vision of how to extend access to formal financial services to the unbanked half of the population, and provides a roadmap for how to get there.
Worldwide, there are 2 billion unbanked adults and the international development community considers financial inclusion necessary to reducing poverty and boosting shared prosperity.
Mexico accounts for 2.6% of that global number. The country is also among the 25 countries the World Bank Group and partners have prioritized in the Universal Financial Access by 2020 initiative. The goal of this initiative is to enable access to a transaction account to store money, and send and receive payments by adults who are not a part of the formal financial system.
Financial products must be adapted to women’s needs, like enabling them to open their own account or improving their financial literacy. Photograph: World Bank Photo Collection
Two billion people worldwide still lack access to regulated financial services. Despite significant progress and the increased technical and financial resources devoted to financial inclusion, much work remains ahead.
There is broad consensus that access to a transaction account can help people better manage their life and plan for emergencies.
But financial access and the underlying financial infrastructure taken for granted in rich countries, such as savings accounts, debit cards or credit as well as the payment systems on which they operate, still aren’t available to many people in developing countries. This past September, I participated in the Global Policy Forum of the Alliance for Financial Inclusion (AFI) held in Mozambique. This annual meeting convened policymakers, the private sector and other stakeholders to assume new commitments, discuss best practices and agree on the way forward.