It is my pleasure to welcome you to this virtual training to be led by Home Credit, one of AFI’s Public Private Dialogue (PPD) regional partners. A special welcome to members of SARFII and South-East Asia who are joining us in this training, as this topic is equally relevant for them.
Acknowledge PPD Partner Today’s training is being led by Home Credit, a global consumer finance provider that became a regional PPD partner in October 2020. The partnership with Home Credit was established to help advance financial inclusion in Central and Eastern Europe and Central Asia through systematic knowledge sharing with financial policymakers and regulators across the region and beyond. We welcome them to deliver their first training for AFI members.
The partnership with Home Credit focuses on financial literacy, consumer protection, the digitization of consumer finance, cross-border remittances and emerging risks of Digital Financial Services (DFS), which represent some of the strengths of Home Credit as a provider of consumer finance in the region. And this matches well with the demand we have for training on these topics from many of AFI’s members.
The training focuses on promoting digital financial literacy to support digital innovation. This topic is particularly relevant to our members in the region whose financial inclusion strategies leverage the use of DFS to accelerate access to finance by financially excluded individuals. In line with global trends, the region has seen growth in the uptake of DFS, particularly during the period of the COVID-19 pandemic. The 2021 Global Findex Report highlighted that Europe and Central Asia region witnessed a significant rise in digital payments, with 74 percent of adults making or receiving digital
payments in the past year, up from 60 percent in 20171. This growth came on the back of emerging digital innovations which facilitated instant payments, including cross-border remittances. In comparison, South Asia reported a financial inclusion rate of 68 percent in the same period, which was below the 71 percent average for developing countries.
In spite of the commendable growth in uptake of DFS in most jurisdictions in the two regions, there is still a notable digital divide. In Europe and Central Asia there is a notable digital divide by education level, with only 52 percent of adults with primary education or less making or receiving digital payments compared to 79 percent of those with secondary education or more. This is a considerable gap of 27 percentage points, which needs to be addressed in order to encourage the uptake and use of formal financial services in this segment. In the case of South Asia a significant gender disparity in digital payments was reported, with countries such as India and Sri Lanka reporting gender gaps as high as 12 percent and 17 percent, respectively. The Global Findex Database highlights that a significant barrier to financial inclusion in Europe and Central Asia, is distrust of the financial system. About one-third of adults in the region who don’t have bank accounts mentioned distrust as their main reason for not having one, significantly higher than the developing country average of 23 percent.
Dear Participants, the promotion of digital financial literacy amongst the vulnerable groups is critical to addressing the digital divide. This training program is designed to enable you to appreciate the critical role of digital financial literacy in enhancing adoption of digital innovations. We hope you will learn from Home Credit and its partners on the different approaches to digital financial literacy implemented in different jurisdictions in the region. These include case studies on a financial education application deployed by Bank of Georgia for users of financial products below the age of 18. The sessions will also discuss a financial literacy program developed for women and girls in India.
Participants will also learn about the use of behavioral economics and fintech solutions to develop digital financial literacy programs which enhance both the reach and efficiency of financial education using customer information and interactivity. This approach has been developed by Home Credit in collaboration with the University of Singapore in an effort to customized digital financial literacy programs for its consumers.
Dear Participants, in line with AFI’s commitment to supporting policymakers and regulators to build capacity in different areas of financial inclusion policy, I wish to highlight that AFI has introduced online courses to complement its existing portfolio of capacity building services. The online courses cover several topics in financial inclusion including, financial inclusion strategy, financing women-led MSMEs, inclusive green finance, crisis responses and inclusive financial integrity. The courses are self-paced, practical and user-friendly offering financial inclusion policymakers an opportunity to shore up their knowledge of financial inclusion policy. I urge all participants to take the opportunity to complement virtual and in-person capacity building events with these online courses.
Dear participants, as I conclude, thank again to Home Credit and the speakers lined up for sharing their experiences in the region. It is my hope that AFI members will benefit from the extensive experience of Home Credit and its partners in delivering digital financial literacy programs to vulnerable groups. I encourage all participants to engage with the panel of distinguished speakers, to gain deeper understanding of the different approaches to financial literacy, which can be adapted to suit your country context.