Author: Sadheshan Govender


Date: 17 January 2019

Digital Financial Services Improving Financial Inclusion


Positive developments can be achieved through building a more financially inclusive financial sector which serves a vital purpose, offering savings, credit, and payment products allowing for broad access to financial services to benefit poor people and other disadvantaged groups.

According to the Global Findex Database Report (2017) published earlier this year, the number of adults who have an account with a formal financial institution increased by 18% since 2011. However, a wide variation remains between gender, high and low-income economies, age differences and level of education. Globally, about 1.7 billion adults (56% women) remain unbanked. Developing economies account for a larger share of the unbanked sector with common reasons for not having an account included having too little money, cost, distance, lack of documentation and distrust in the financial system. Many adults in Africa use informal methods to save and borrow.

Domestic remittance payments are important as nearly half of adults are involved in such payments in Sub-Saharan Africa. In developing economies, 46% rely on an account regarding these transactions.

Mobile phones and the internet increasingly offer an alternative to debit and credit cards for making direct payments from an account as 51% of adults in developed economies made use of it in the past year compared to 19% in developing economies.

In developed economies, 55% reported saving using an account, while in developing economies 21% did. About 50% of adults globally borrowed money in the past year, with developed economies having a higher share relying on formal credit whereas developing economies borrowers are likely to turn to family or friends.

To ensure that digital financial services financially includes people, a well-developed payment system, good physical infrastructure, appropriate regulations, and vigorous consumer protection safeguards are required while also being tailored to the needs of disadvantaged groups such as women, poor and uneducated people

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