Indians’ access to mobile money jumps 17-fold in four years: IMF2 min read . Updated: 11 Nov 2020, 08:54 AM IST
- The number of Indians per thousand using digital financial services rose from 73 in 2015 to 1,265 in 2019
Financial innovation has in part led to a 17-fold jump in the number of adult Indians per thousand people having access to financial services offered by a mobile network or its partners from 73 in 2015 to 1,265 in 2019, the International Monetary Fund (IMF) said in its latest survey on financial access.
Mobile money refers to accessing financial services offered by a mobile network or its partners, and is distinct from accessing conventional bank accounts, or debit or credit card information, using a mobile phone.
“The progress made in getting people into the folds of the financial system, especially in low- and middle-income economies, has been made possible, in part, through innovations such as digital financial services, including mobile money," said IMF’s financial access survey for 2020 released on Monday.
The survey offers a pre-pandemic snapshot of financial inclusion.
In the sample set of economies chosen for the survey, India showed the sharpest increase in access to mobile money during the period.
Overall, access to and usage of financial services have deepened over time in low-and middle-income economies. The survey said that digital financial services, both mobile money, and mobile and internet banking, have two key features, including high market penetration and minimal physical contact to transact, which have supported undisrupted financial transactions during the pandemic.
In addition, countries across the globe enacted emergency measures to encourage the use of digital financial services, IMF said. These include transaction fee cuts and higher balance and transaction limits, the report added. A few countries also eased the know-your-customer requirements to encourage more people to start using digital financial services.
India has been using Aadhaar, no-frills bank accounts, low-cost life and health insurance schemes, and direct bank transfer of entitlements to promote financial inclusion over the last few years, while access to the internet and usage of mobile phones rose.
Some key economic and taxation policies, including the requirement for businesses to offer digital payment modes in certain cases, are geared towards the goal of a less-cash and more transparent economy, IMF added in its report.
India surpassed China in fintech investments in 2019 to become the third-most funded country behind the US and the UK, according to a report by FinTech Convergence Council, an arm of Internet and Mobile Association of India, and fintech research firm Medici Global Inc. Cumulative investments in India’s fintech between January 2016 and June 2020 touched $10 billion, the firms said in a recent report on the sector.
However, challenges of access remain, notably in the case of women and small- and medium-sized enterprises, the IMF report said. The survey suggested that improvement in closing the gender gap in financial access varied across countries with microfinance institutions playing an important role in lending to women in some economies.