IMF chief calls on countries to promote fintech for financial inclusion

SHANGHAI - International Monetary Fund (IMF) Managing Director Kristalina Georgieva has called for the promotion of fintech on a global scale to accelerate financial inclusion for a better and more resilient post-pandemic world.

In her video address to the opening ceremony of the first INCLUSION Fintech Conference, which kicked off Thursday in Shanghai, the IMF chief said the second-quarter economic performance in China, and in many advanced economies, was better than anticipated.

However, according to Georgieva, the outlook for emerging markets and developing economies, other than China, remains "precarious." Across all countries, growth prospects are affected by "economic scarring," including job losses and higher inequality.

She emphasized the importance of financial inclusion to advance a fairer, faster, and smarter economic recovery.

"Seizing opportunities to improve financial access was already a priority for countries worldwide before the pandemic. But it is even more urgent now because groups that already lack access are being hit particularly hard by COVID-19," she noted.

Under such circumstances, the IMF chief said financial inclusion and fintech can help people connect to opportunities and prevent them from slipping into poverty.

Georgieva also pointed out that digital financial services enable governments to quickly expand social safety nets, help unemployed people with payments, stimulate consumption, and speed up their economic recovery. Also, fintech helps slow the spread of COVID-19 since it has made contactless and cashless transactions both popular and practical.

"Digital payment services are expanding into digital lending, developing cheaper and more efficient ways to extend credit to hard-to-reach borrowers," she said.

This statement mirrors the experience in China. According to data released in June by MYbank, an online private commercial bank under Chinese fintech firm Ant Group, in the past five years, technological development has greatly increased the availability of small loans totaling less than 1 million yuan ($147,000) to small and medium-sized enterprises (SMEs) in China.

More than 50 percent of all small shops nationwide currently have access to such loans, the data show.

In March, a program to assist contactless loans for SMEs, launched by the All-China Federation of Industry and Commerce and MYbank, was joined by 100 banks in China, providing contactless financial support for over 10 million small and micro business operators in three months.

In her video address, Georgieva also called on countries worldwide to provide support by investing in access to digital infrastructure and in people to improve financial and digital literacy. She further called on nations to address biases in data that exclude the most vulnerable.

The three-day fintech conference, with more than 40 online and offline sessions, will last until Saturday. Participants will join the event via video conference to share ideas on themes such as the global digital economy, innovative technology, digital finance, and technology for social good.