The Financial Inclusion Landscape in the Asia-Pacific Region

Abstract

Financial inclusion is a multidimensional concept and countries have chosen diverse methods of enhancing financial inclusion with varying degrees of results. The heterogeneity of financial inclusion is particularly striking in the Asia-Pacific region as member countries range from those that are at the cutting edge of financial technology to others that are aiming to provide access to basic financial services. The wide disparity is not only inter-country but also intra-country. The focus of this paper is to take stock of the current state of financial inclusion in the Asia-Pacific region by highlighting twelve stylized facts about the state of financial inclusion in these countries. The paper finds that the state of financial inclusion depends on several factors, but a holistic approach calibrated to specific country conditions may lead to greater financial inclusion.

Financial inclusion dynamics in Southeast Asia: An empirical investigation on three countries

“…The VIP is still below average globally in inclusion, raising the question of how effective national plans are in attaining broader access. Efforts to advance inclusion in the VIP have caught the attention in the literature of the field (Aviles, Sitorus, & Trujillo Tejada, 2019;Do et al, 2020;Jahan et al, 2019;Llanto, 2015;Yoshino & Morgan, 2016), as the VIP has launched plans to strengthen literacy, capacity, regulation, and access.…”

“…The VIP is highly dominated by microfinance and informal financial service providers (Jahan et al, 2019). Informal finance segments include credit unions, interpersonal borrowing, private money houses, pawnshops, microcredits, and cooperatives.…”

“…Most countries have experienced significant growth in financial inclusion, as reported in Demirguc-Kunt, Klapper, Singer, Ansar, and Hess (2018). Nevertheless, countries like Vietnam, Indonesia, and the Philippines (VIP) still have a large number of underserved people with critical gaps among individuals (Jahan, De, Jamaludin, Sodsriwiboon, & Sullivan, 2019), more significantly in Vietnam (Vo et al, 2020) and the Philippines. The paradox is that banks and other financial entities in Southeast Asia are liquid and profitable.…”

“…The large rural populations in Vietnam (63% in 2019), Indonesia (45%), and the Philippines (53%) are of particular interest in the literature of financial inclusion. Malaysia, Singapore, and Thailand (regional partners in Southeast Asia) are excluded from this study as they enjoy broader financial access (Jahan et al, 2019;OECD, 2018), they have lower financial gaps (Grohmann, Klühs, & Menkhoff, 2018), they have a smaller population, they have lower rates of economic growth and have different demographic structures.…”

Market Costs and Financing Options for Grassland Carbon Sequestration: Empirical and Modelling Evidence From Qinghai, China

“…Financing these investments through loans is likely only feasible if public subsidies are made available to reduce interest rates, which is similar to findings by (Pan et al, 2021). Additionally, it may require that conditions for access to credit finance are significantly revised to remove barriers due to collateral requirements and short repayment periods that are common requirements for rural finance (Jahan et al, 2019). Elsewhere in Asia, degradation driven by overgrazing may be widespread but not so severe (e.g., Densambuu et al, 2018).…”