The APEC Economic Policy Report 2024 (AEPR 2024) on Structural Reform and Financial Inclusion aims to promote structural reforms that support financial inclusion, which is a crucial component of sustainable, resilient, and inclusive economic growth. The report presents both demand-side and supply-side issues in financial access, focusing on implementing structural reforms to facilitate equitable access to and use of financial services for all. Expanding financial inclusion requires a well-planned and carefully considered process.
Although APEC economies have made progress in increasing financial inclusion, with 84% of the regional population having financial accounts or mobile money accounts, there remains a need to further expand financial access to ensure comprehensive coverage across all population groups. Key approaches include promoting competition and innovation in the financial sector, developing financial literacy among the public, and establishing appropriate practices to support proper usage. Structural reforms can play a crucial role in expanding quality and equitable financial access for all. The report contains the following key elements:
(1) Financial inclusion is vital for economic growth by enabling greater participation of individuals and businesses in economic activities. However, distributing financial services to reach low-income groups and reduce inequality is key, particularly through digital financial development to increase financial access opportunities for disadvantaged and marginalized populations.
(2) Financial inclusion helps enhance economic potential for groups with untapped economic potential by empowering these groups to manage finances efficiently, save and prepare for emergencies, and facilitate access to appropriate credit, which benefits entrepreneurs. It also helps reduce inequality and supports the transition of informal businesses into the formal economy.(3) Financial inclusion in the APEC region where APEC member economies have worked to increase financial access through developing financial products tailored to specific group needs, providing such products through government financial institutions or government-initiated programs to expand financial access. Additionally, digital payment systems and digital banking play important roles in increasing financial access and enhancing opportunities for accessing other financial services.
The report also presents policy recommendations, which can be summarized as follows:
(1) Expanding quality and equitable financial access to create an inclusive and sustainable economy through eliminating structural barriers and facilitating financial access, such as maintaining financial sector stability, reducing costs of financial access, prioritizing MSMEs in financial access, and promoting digital innovation in the financial sector.
(2) Creating comprehensive financial inclusion through eliminating structural barriers to financial access, reducing procedures and facilitating financial access, and prioritizing the specific needs of groups with untapped economic potential.
(3) Promoting utilization of financial services by focusing on enhancing financial literacy and supporting business opportunities for entrepreneurship.
Read the full document at: https://www.apec.org/publications/2024/11/2024-apec-economic-policy-report
Strategy and International Cooperation Coordination Division
Office of the National Economic and Social Development Council