Digital financial inclusion in South East Asia

• Main Authors: KOH, Francis, PHOON, Kok Fai, HA, Cao Duy
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2017
• Subjects: Financial inclusion; Financial services; Mobile network; South East Asia; Asian Studies; Corporate Finance; Finance and Financial Management; Technology and Innovation
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5920
• Institution: Singapore Management University

Bill Gates projected that, "By 2030, 2 billion people who don't have a bank account today will be storing money and making payment with their phones" as a mega trend of digital financial inclusion. This paper contributes to the literature on digital financial inclusion in surveying the current status of such inclusion in South East Asia. While there is no universally accepted definition nor measure of financial inclusion, the paper employs the G20 Financial Inclusion Indicators and the theoretical digital financial inclusion development pathway framework of Radcliffe and Voorhies (2012) to (a) survey the current financial inclusion status, (b) the effectiveness of government initiatives to deliver financial services and (c) examine possible development pathways for the South East Asian (SEA) nations towards financial inclusion.Our analysis of data from 2011 to 2014 from the Global Findex database finds wide differences in banking account penetration rate among adults, stage of development of banking sectors' infrastructure, and the use of banking-technology among the SEA nations. Resulting from the survey and our analysis of the initiators of core connectivity (being mainly the stage of economic development), we conclude that it is highly likely that digital financial inclusion in countries like Cambodia and Myanmar will be driven by mobile network operators, who would provide a full slate of financial services. On the other hand, the other SEA nations are projected to develop mobile banking services for the unbanked by the partnership of the banking and mobile network operators.