FDC Convenes Policy Dialogue on Progressing Financial Inclusion in an Age of Disruption
On 9 September 2020, FDC, in partnership with the Asian Development Bank Institute and the Bank of Papua New Guinea, hosted the 10th annual Asia-Pacific Financial Inclusion Forum (APFIF). The Forum, which is a policy initiative of APEC, brought together senior finance officials representing 16 economies across the region as well as over 20 industry experts to discuss specific actions policymakers and regulators can take to expand the reach of financial services to the underserved.
With a focus on financial inclusion as an enabler of inclusive growth, especially for those at the base of the economy, the dialogue featured a series of case studies from several leading institutions and government agencies which provided practical examples of innovative solutions for progressing financial inclusion targets in an era that is facing disruptions from rapid advancements in digital technology as well as the economic impact of the covid-19 pandemic.
The dialogue centred on three themes which capture some of the most pressing needs for financial inclusion to have an impact and opportunities for stakeholders to cooperate on meeting these challenges.
The role of microfinance in enhancing opportunity and resilience in response to Covid-19
The economic and financial impacts flowing from lockdowns to curb the spread of Covid-19 have been severe in most Asia-Pacific economies, with substantial declines in the incomes of people at the base of the economy, many of whom rely on microfinance to manage their household or microenterprise cash flows. Forum participants shared emerging lessons from the experiences of different economies and potential opportunities for governments, as part of the recovery process, to support microfinance providers as effective contributors to economic development.
Making digital financial services work for the base of the economy
The digital revolution and its potential to transform access and use of financial products and services by the unserved and underserved has become more important now as a result of the Covid-19 pandemic. However, as the availability of digital financial services (DFS) continues to grow, the expansion and adoption of DFS among those at the base of the economy remains slow. Case studies shared by Forum participants examined the role of government in enhancing the DFS environment for enterprises at the base of the economy and enabling the unbanked to recognise DFS as a compelling service in meeting their needs.
Enabling financial inclusion through e-commerce
E-commerce is a growing feature of local retail ecosystems throughout Asia-Pacific. Supported by new convenient and affordable transaction options enabled through internet-based platforms and mobile money, e-commerce is a significant driver in the use of digital financial products and services. Forum participants shared insights on the challenges associated with generating demand for digital financial products and services for microenterprises and those at the base of the economy and highlighted examples which demonstrate the opportunity for policymakers and regulators to create an enabling environment for innovative e-commerce solutions for micro entrepreneurs.
A full report exploring each of these themes in greater detail, including the case studies presented by Forum participants and the recommendations developed for policymakers and regulators, will be published in the coming weeks and available of the FDC website.