The International Monetary Fund (IMF) has said deepening financial inclusion could spur economic growth of a country.
Chief economist of the IMF, Dr Filiz Unsal disclosed this on Wednesday while delivering a lecture titled: ‘Financial Inclusion Zooming In’ at the ongoing annual meetings of the IMF/World Bank in Bali, Indonesia.
She explained that the capacity of a country to encourage savings culture for its citizens and drive financial inclusion provides opportunity for people to better their lives.
She said low level of financial inclusion contributes greatly to income inequalities and disparity.
The economist also disclosed that only about 50 percent of poor in emerging markets and about 20 per cent in low-income countries have access to credits.
According to her, these set of people face various kinds of difficulties which include transaction costs and collateral requirements.
‘‘All of these have impacts on their productivity, their innovations and their capacities to produce which ultimately have impact on growth.
‘‘Because the poor cannot access credit, they have to rely on self-financing to start a business and when they start, they rely on themselves in the production,’’ she said.
Unsal also said limited access to credit and high interest rate remain major constraints to financial inclusion. She urged advanced economies in the world to learn from developing economies on how to drive financial inclusion.
Recall that the Central Bank of Nigeria, in collaboration with stakeholders, launched the National Financial Inclusion Strategy in October 2012; aimed at reducing financial exclusion rate to 20 per cent by 2020 from 46.3 per cent.