Financial Inclusion in the People's Republic of China
This paper discusses the extent and nature of financial inclusion in the Peoples Republic of China (PRC) and the size and characteristics of the unbanked and under-banked market. It analyzes the effect of policy changes since 2005 on the inclusiveness of PRC's formal financial system. The paper states that policy changes in recent years in PRC have helped to commercialize the banking sector, increase banking service coverage, and the variety of appropriate, commercially viable loan products. However, basic banking services are not yet accessible to all. There is considerable potential for increasing the commercial provision of financial services to the previously excluded in PRC. Policy makers, financial institutions, and investors need comprehensive, high-quality market information to take full advantage of this potential. The paper makes recommendations in the areas of:
- Improving data and research;
- Understanding the needs of different market segments;
- Improving stakeholder comprehension of the nature, efficiency, and effectiveness of financial service providers that target the previously excluded;
- More in-depth analysis of policies, regulations, and supervision;
- Extensive exchange of knowledge on financial inclusion between Chinese stakeholders and the international community.
