Financial Inclusion in the Europe and Central Asia Region : Recent Trends and a Research Agenda
Financial inclusion can help promote development. Inclusive financial systems allow people to invest in their education and health, save for retirement, capitalize on business opportunities, and confront shocks. In the Europe and Central Asia regio...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/707191556125156873/Financial-Inclusion-in-the-Europe-and-Central-Asia-Region-Recent-Trends-and-a-Research-Agenda http://hdl.handle.net/10986/31585 |
| Summary: | Financial inclusion can help promote
development. Inclusive financial systems allow people to
invest in their education and health, save for retirement,
capitalize on business opportunities, and confront shocks.
In the Europe and Central Asia region, there is great
variation in financial inclusion. In the euro area, most
adults already own an account. Account ownership -- which is
the first step of entry into the formal financial system has
increased in the developing countries in the region, to 65
percent of the adult population from 45 percent in 2011.
Tajikistan, Armenia, Moldova, the Kyrgyz Republic, and
Georgia are among the countries that have seen the greatest
increases globally, despite starting from a very low base.
These experiences underline the potential role of digital
payments in driving financial inclusion. Nevertheless,
almost 30 percent of unbanked adults report lack of trust in
banks as a barrier, which is nearly double the developing
country average. And in some countries, gender and income
gaps in account ownership remain significant. For example,
the gender gap is close to 30 percentage points in Turkey,
which is three times the average gap in developing
countries. And in Romania, the gap between richest 60
percent of the population and poorest 40 percent is 33
percentage points, which is more than twice the average gap
in developing countries. But there are many opportunities to
increase account ownership. Over 80 percent of the unbanked
have a mobile phone, and simply moving public sector pension
payments into accounts would reduce the number of unbanked
adults in the region by up to 20 million, including 8
million in the Russian Federation alone. Given the
heterogeneity of experiences, there are ample opportunities
for countries in the region to learn from each other, which
lays out a rich research and operational agenda going forward. |
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