S’pore, Japan lead AsPac in progress toward financial inclusion progress toward financial inclusion

MANILA, Philippines - MasterCard unveiled a new global report, “A Progressive Approach to Financial Inclusion” that explores the progress of 30 developed and developing countries, including eight countries within the Asia Pacific region: Indonesia, Bangladesh, Philippines, India, Malaysia, China, Japan and Singapore, have made in enabling access to and driving usage of different financial products.

Half the world’s adult population lacks the basic financial tools people use to save for a rainy day, borrow money on reasonable terms, or get insurance for an unforeseen event, the report said.

Countries that successfully expand financial inclusion can build a foundation of economic growth that is both inclusive and sustainable, it added. 

In the Asia Pacific region, Japan and Singapore are leading the way in financial inclusion progression, but the adoption-usage gap is large among countries like China and Malaysia in their progression toward financial inclusion.

The financial inclusion gap noted in the report highlights the need for greater innovation, public-private partnership and consumer education to achieve inclusion. The study also redefines access and usage to better reflect the true state of financial inclusion, and demonstrates three principles for accelerating progress: Payments are the optimal entry point globally, and beyond payments a country’s progress depends on local factors; driving usage of available tools needs to be a priority; and solutions must be tailored to address a country’s current state of financial inclusion.

Measuring access has traditionally focused simply on availability of financial tools, but in the digital age of widely available and distributed platforms such as mobile money/banking, this is becoming less relevant.

“A Progressive Approach to Financial Inclusion” focuses on people’s adoption, or ownership, of a product as the definition of access. Similarly, measuring usage has previously been measured by determining if a product is used at all, but this report focuses on the degree to which a product is used to more accurately reflect the amount of benefit derived.

“While markets such as Japan and Singapore are advancing fast, we also have markets like Indonesia, Bangladesh and India that are in the initial stages of their financial inclusion progression. In a region as diverse as Asia, innovation, partnerships and education are crucial in order to close the gap between access and usage of financial services and products, and to realize the benefits of financial inclusion,” said T.V. Seshadri, group executive, Global Products and Solutions, Asia Pacific, MasterCard.