The role of government in financial inclusion is seen as essential
Experts call for ‘down-to-earth’ efforts to improve national system
China should support all market players striving to improve financial inclusion to explore more cooperation models, which uphold laws and regulatory compliance, control risk and promote business sustainability, in areas of business, technology, data and infrastructure through methods such as regulatory sandboxes and implementing pilot programs in local areas, experts said.
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs and are provided in a responsible and sustainable manner, according to the World Bank.
After years of development, China’s financial inclusion system has shown characteristics such as diversified market entities, high correlation and deep integration. Market players have evolved from small loan companies to a diversified organizational system in which traditional financial institutions and emerging market entities engage in healthy competition and cooperation, said Shan Qiang, Party Secretary of the National Internet Finance Association of China.
In the next step, the country should scale up the initiative and creativity of all market players in this area and support them in building a more robust and balanced financial inclusion ecosystem, a said Shan at the 2022 China International Forum for Financial Inclusion in Beijing recently. .
There is also a need for the country to strengthen regulation of the conduct of market participants, improve transparency in the financial inclusion market, and enhance consumer protection through measures such as information disclosure, risk alerts and ethical reviews, he said.
Wu Xiaoqiu, co-chairman of the board of trustees of the Chinese Academy of Financial Inclusion at Renmin University of China and former vice president of the university, said financial inclusion is part of a number of indicators of China’s financial modernization, which is a basic element of Chinese modernization.
A financial system that ignores the needs of micro and small businesses as well as the demand for wealth management services from low- and middle-income people can hardly be considered modernized finance, Wu said.
China should forge ahead in a down-to-earth manner with effective quality improvement and reasonable quantity increase in terms of financial inclusion, in line with global requirements in pursuit of high-quality development by the country, said Liu Feng, general secretary. of the Chinese Banking Association.
With the accelerated industrialization, urbanization and agricultural modernization of the country in recent years, hundreds of millions of people have moved from rural areas to cities. They have become new urban residents – people who live in a city permanently but have not yet obtained a local hukou, an official document certifying that the holder is a legal resident of a particular area, or those who have obtained a local hukou within the past three years. years.
Currently, there are about 300 million new urban residents on the Chinese mainland, accounting for more than 20% of the mainland’s population.
Strengthening financial services for new urban residents has practical importance for maintaining stable economic performance and promoting growth. The banking sector has focused on consolidating and improving the effects of financial inclusion. During the process of integrating into urban life, new urban residents will have strong and diversified demand for financial services, which will provide huge opportunities for banking institutions to develop new businesses, Liu said.
Experts and officials also highlighted the importance of promoting high-quality financial inclusion development to help small businesses build resilience in the face of difficult times.
Lin Jingping, deputy director of the financial work bureau of the Taizhou municipal government, said that in order to reduce the level of information asymmetry between banks and small businesses, a credit information sharing platform has was created in Taizhou, Zhejiang province, collecting 433 million pieces. credit information from over 790,000 market entities from over 30 government departments and providing this information to banks free of charge.
The platform has allowed banks to offer loans to small businesses in a more targeted way, Lin said.
As of the end of the third quarter, the loan balance for micro and small enterprises that have a total credit line of up to 10 million yuan ($1.42 million) per borrower reached 23.16 trillion yuan in China. , up 24.6% year-on-year. year, according to the People’s Bank of China, the central bank.
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