Rural areas need financial education
Fraud concerns, lack of knowledge underpin rejection of mobile services
Financial education and fostering the financial capabilities of the public are important tasks to promote financial inclusion in China, according to academics and financial service professionals.
Financial fraud and misleading financial advertising are more prominent in China than in developed countries, and many Chinese citizens have relatively weak financial knowledge, said Bei Duoguang, president of the Chinese Academy of Financial Inclusion at Renmin University of China.
A recent report published by the academy shows that financial capabilities which are evaluated by indicators such as financial knowledge and skills — and the use of financial services — still have huge room for improvement in Zhejiang, an eastern coastal province of China.
The situation is even worse in less developed central and western China. Although access to finance has been greatly improved, inadequate financial capabilities have become a major element impeding the use of financial services and the enhancement of financial inclusion, according to Bei.
A survey conducted by Visa Inc and its partners found that of 3,010 rural households across 19 poverty-stricken counties in Jilin province, Heilongjiang province and the Inner Mongolia autonomous region, only about 11 percent have used mobile financial services, despite the fact that nearly 92 percent of the survey participants use mobile phones and nearly 50 percent of them use smartphones.
“Many people have rejected formal financial services due to their concerns about telecommunications fraud and lack of financial knowledge. Therefore, building the capabilities of various participants for financial inclusion is crucial to promoting its development,” said Iris Yue, financial inclusion and education program manager at Visa China.
During a meeting with its partners about financial inclusion on June 14, Visa announced that the company will offer scholarships to 100 policymakers, regulators, researchers and practitioners in this field. This will allow them to take a 12-week online course on digital finance and financial inclusion, jointly launched by the Chinese Academy of Financial Inclusion and the Digital Frontiers Institute. A new session of the course will start in August.
“Visa defines financial inclusion as something that enables individuals and merchants to access secure, convenient and affordable payments and other financial services and use them to meet everyday needs and long-term goals,” said Amina Tirana, senior director of government and partnerships, global financial inclusion, at Visa Inc, the global payments technology company.
Globally, about 1.7 billion adults remain unbanked — without an account at a financial institution or through a mobile money provider — according to the 2017 edition of the Global Findex database published by the World Bank.
In 2015, the World Bank and the International Finance Corporation committed to enabling 1 billion people to gain access to a transaction account by 2020 through targeted interventions. Visa committed to providing another 500 million individuals with first-time access to the payments system between 2015 and 2020.
“As of the end of December 2017, we had provided 281 million people around the world with first-time access (to the payments system),” Visa’s Tirana said.
Some 56 percent of those first-time payment accounts are going to women, which is important in terms of social impact and poverty alleviation; 46 percent are going to rural households; and 47 percent are reaching the lowerincome group, she said.
Many people have rejected formal financial services due to their concerns about telecommunications fraud ...”
Iris Yue, financial inclusion and education program manager at Visa China