Seven Essential Guiding Principles to Boost Financial Inclusion Laid Out in New Report
Wednesday, April 6, 2016
Seven guiding principles to help countries increase financial inclusion were set out in a report released today by the Committee on Payments and Market Infrastructures (CPMI) and the World Bank Group. The Payment aspects of financial inclusion report builds on a document that underwent public consultation in late 2015 and seeks to tackle barriers to the adoption and usage of transaction accounts, which sit at the heart of retail payment services.
A transaction account is an essential financial service that can serve as a gateway to other financial services such as savings, credit and insurance. However, nearly 40% of the world’s adult population – about 2 billion people – still have no account with a bank or authorised non-bank servicer provider.
In addition to outlining principles to help countries advance financial inclusion, the report suggests possible key actions, including providing basic accounts at little or no cost, stepping up efforts to increase financial literacy, and leveraging large-volume payment programmes, such as government payments, by adopting electronic payment services. Financial inclusion efforts are beneficial not only for those who will become financially included, but also for the national payments infrastructure and, ultimately, the economy.
The seven guiding principles are: (i) commitment from public and private sector organisations; (ii) a robust legal and regulatory framework underpinning financial inclusion; (iii) safe, efficient and widely reachable financial and ICT infrastructures; (iv) transaction accounts and payment product offerings that effectively meet a broad range of transaction needs; (v) availability of a broad network of access points and interoperable access channels; (vi) effective awareness and financial literacy efforts; and (vii) the leveraging of large-volume and recurrent payment streams, including remittances, to advance financial inclusion objectives.
The CPMI and the World Bank Group believe that the guidance developed in this report will be essential to helping central banks and other stakeholders achieve effective financial access and broader financial inclusion. Given that safe, efficient and accessible retail payment systems and services are critical for greater financial inclusion, the report will be instrumental in supporting the goal of achieving Universal Financial Access by 2020.
Source: Press Release (link opens in a new window)