Access to financial services deepens in low, middle income countries – IMF

Date:

By Folasade Akpan
Abuja, Nov. 9, 2020 The International Monetary Fund (IMF) says access to and usage of financial services has deepened over time in low and middle-income economies.

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The fund said this in a statement issued on Monday in Washington D.C., adding that it was contained in the recently released results of the eleventh annual Financial Access Survey (FAS).

According to the it, FAS provides a unique supply-side database on access to and use of financial services covering 189 jurisdictions with more than 100 series and historical data from 2004.

“The FAS data also allows policymakers to measure and track the progress made in financial access and benchmark it against that of peers,’’ it said.

IMF said that the 2020 round offered a pre-pandemic snapshot of the levels of financial access.

“The current round of FAS provides a pre-pandemic snapshot of the levels of financial access to both traditional and digital financial services.

“While the number of Automated Teller Machines (ATMs) per 100,000 adults has grown for the past few years, the number of commercial bank branches has remained relatively stable at the 2013 level.”

It said that these trends likely reflected the recent rise of non-branch retail agent outlets and digital financial services, mobile money, mobile and internet banking, which continued to play a significant role in advancing financial access, especially in low and middle-income countries.

It however said that notwithstanding the progress, challenges of access remained.

“Notably, women and Small and Medium-sized Enterprises (SME) have often been excluded from the financial system.

“Data from FAS suggests that progress made in closing the financial access gender gap varies across countries with microfinance institutions playing an important role in satisfying the unmet demands of financial services for women in some economies.”

The IMF said that lending to SMEs continued to be constrained.

The fund said that a financial access COVID-19 Policy Tracker was inaugurated to complement FAS data collection.

“The policy tracker aims at facilitating information exchange and peer learning among country authorities about the measures related to SME finance and greater use of digital financial services in the current pandemic context,’’ it said.

According to the IMF, social distancing measures in place during the COVID-19 pandemic are expected to significantly impact SMEs, which account for 90 per cent of businesses and 50 per cent of employment worldwide.

“In response, country authorities put in place measures to help SMEs weather the current pandemic.

“The measures documented by the policy tracker were classified into debt moratoriums, loan guarantees, lower interest rates, tax relief and financial assistance.’’

The fund however said that digital financial services provided opportunities in the pandemic context but also posed risks.

“Digital financial services, both mobile money and mobile and internet banking, have two key features – high market penetration and minimal physical contact to transact- that support undisrupted financial transactions during the current pandemic.

“In addition, country authorities across the globe have enacted emergency measures to encourage the use of digital financial services.

“These measures also documented in the policy tracker can be classified into four broad categories – Person-To-Person (P2P) transaction fee cuts, increased balance and transaction limits, easing of Know Your Customer (KYC) requirements and simplified transaction processes.”

The IMF said that the next round of FAS data collection scheduled to start in March 2021 might help provide useful insights on the impact of the COVID-19 pandemic on financial access and use.

Naija247news
Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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