Gov’t senator wants more financial inclusion

SENATOR DR Dana Morris Dixon, minister with responsibility for digital and skills transformation, has called for the banking sector to address several key issues related to financial inclusion.

Among these are that only 30 per cent of Jamaicans are saving through a regulated financial institution, the use of electronic transactions and digital wallets being lower than what the government would have hoped for, and many businesses not having access to formal credit.

“This is an issue which needs to be addressed. It is a key area of financial inclusion where our small businesses, especially, do not have access to capital; it also points to the issue of trust. Trust is central to every thing that we do, and there are many people who do not trust financial institutions and financial products, and that is very central to everything that we have to do,” Dr Morris Dixon said on Tuesday.

She was speaking at an MC Systems webinar held under the theme ‘Financial Inclusion in Emerging Markets’ at the Jamaica National corporate office on Oxford Road.

“I know that in Jamaica, the use of electronic transactions is lower than what we would want, significantly lower than it is in more advanced countries; households lack suitable and accessible savings, affordable insurance and retirement products, and (people) struggle to be financially resilient,” Dr Morris Dixon said.

“And so, as MC Systems is building out systems and nice banking platforms, that issue of trust has to be embedded in everything that is developed and produced, so that the population will trust the technology and be more open to doing business with financial institutions,” she said.

“It’s about how we empower people and communities with the tools and resources that they need to really be a part of the economic systems, so it’s about opening doors for those who have been systematically left out and locked out of the financial mainstream,” Dr Morris Dixon added.

“If we think about financial inclusion, one way to start to think about it is in relation to the national financial inclusion strategy that was put out by the Bank of Jamaica. It highlighted four things that were impediments to financial inclusion. The key thing is understanding what are the impediments, what are the issues, so that we can actually have strategies to address those impediments. One was the reliance on cash,” she said.

The event aimed to offer insight from leading finance, technology and development experts on the current state of financial inclusion in Jamaica and emerging markets globally. It was also to show how innovative solutions are being implemented to bridge the financial gap and empower financial institutions and businesses in emerging markets.

Dr Morris Dixon highlighted that the matter of insurance coverage is also an area that needs to be addressed.

“Insurance is an area where too many individuals do not have adequate coverage, and it is something that allows you to preserve your wealth. When we have large parts of our population who do not have access to insurance products, that is an issue, and you hear it all the time. You hear older people especially, or even younger people say insurance costs are too high, which is a problem when a natural disaster comes,” she said.

The minister pointed to the impact of climate change on property loss and damage.

“The risk around natural disaster is increasing. What that means is that these insurance products are even more important. So when we do not have products or we do not have people accessing these products, it can have a debilitating effect on their ability to weather any kind of storm that will come ... and they will invariably come,” she stressed.

Dr Morris Dixon also called on persons offering business options to offer more online services. She wants purchasers who do not have credit cards to make payments, to put themselves in a position to get one, as the issue of payments are also central to the issue of inclusion.

“If we think about financial inclusion, one way to start to think about it is in relation to the national financial inclusion strategy that was put out by the Bank of Jamaica. It highlighted four things that were impediments to financial inclusion”