RESTRICTED
S/FIN/W/88
14 November 2014
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Committee on Trade in Financial Services  Original: English
 
 
 
FINANCIAL INCLUSION AND THE GATS 
NOTE BY THE SECRETARIAT1 
This Note has been prepared at the request of the Committee on Trade in Financial Services, to 
serve as background information for discussions on the trade-related aspects of financial inclusion. 
 
_______________ 
  
 
                                               
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to thei r rights and obligations under the WTO. S/FIN/W/88 
 
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  Table of Contents 
1   INTROD UCTION  .......................................................................................................... 3  
2   THE DEFINITION OF FINANCIAL IN CLUSION .............................................................. 4  
3   THE MEASUREMENT OF FINANCIAL IN CLUSION .......................................................... 6  
4   FINANCIAL INCLUS ION STRATEGIES .......................................................................... 8  
5   POLICIES AND REGULATIONS TO  PROMOTE FINANCIA L INCLUSION ........................ 10  
5.1.1   Consumer  protection .............................................................................................. 10 
5.1.2   Financ ial educ ation ................................................................................................ 11 
5.1.3   Branchless banking, including mobile  banking (and other financial services) ................... 11 
5.1.4   The role of post offices ........................................................................................... 15 
5.1.5   Direct St ate interv entions ....................................................................................... 16 
5.1.6   Public sector banks ................................................................................................ 19 
5.1.7   Financial infras tructure de velopment ........................................................................ 20 
6   THE ROLE OF  THE GATS ............................................................................................. 22  
7   CONC LUSION............................................................................................................. 25  
REFERENCES .................................................................................................................. 2 6 
ANNEXES ........................................................................................................................ 29  
TABLE A1. FINANCIAL INCLUSION AROUND THE WORLD (2011) – SELECTED 
INDICATORS. ................................................................................................................. 2 9 
TABLE A2. FINANCIAL INCLUSION IN DIFFERENT REGIONS (2011) – SELECTED 
INDICATORS .................................................................................................................. 3 8 
TABLE A3. FINANCIAL INCLUSION IN DIFFERENT INCOME GROUPS 
WORLDWIDE (2011) – SELE CTED INDICATORS ............................................................. 39  
TABLE A4. MAJOR ASPECTS OF  DISCLOSURE REGIMES IN SELECTED COUNTRIES ......... 39  
TABLE A5. AGENT BANKING RE GULATION AND IMPACT ................................................ 41  
 
 
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1  INTRODUCTION 
1.1.  Over the last decade, financial inclusion has become a public policy priority around the world, 
and has moved up the reform agenda both at the international and national levels. The increased 
emphasis on financial inclusion reflects a growing realization of its implications for reducing 
poverty and boosting prosperity.2  
1.2.  Several international initiatives have emerged over the last years. The Alliance for Financial 
Inclusion (AFI), for example, was founded in 2008 as the first global knowledge sharing network 
on financial inclusion. AFI is currently composed of central banks and other financial regulatory institutions from more than 90 developing countri es. In 2009, AFI issued the Maya Declaration, a 
set of commitments by developing and emerging country governments in four major areas of 
financial inclusion (Box 1). The Declaration has been endorsed by more than 90 developing and 
emerging economies (representing over 75% of the world's unbanked population).
3 In addition, 
since the 2011 AFI's Global Policy Forum, a number of regional cooperation initiatives have also 
emerged in the context of AFI, such as the Africa Mobile Financial Services Policy Initiative (AMPI), 
launched in 2012.  
Box 1. Commitments under the Maya Declaration 
 
A. Putting in place a financial inclusion policy that creates an enabling environment for cost 
effective access to financial services that makes full use of appropriate innovative technology and 
substantially lowers the unit cost of financial services; 
 
B. Implementing a sound and proportional regula tory framework that achieves the complementary 
goals of financial inclusion, financial stability, and financial integrity; 
 
C. Recognizing consumer protection and empowerment as key pillars of financial inclusion efforts 
to ensure that all people are included in their country’s financial sector; and 
 
D. Making evidence-based financial inclusion policy a priority by collecting and analysing 
comprehensive data, tracking the changing profile of financial inclusion, and producing comparable 
indicators in the network. 
Source: Text of the Maya Declaration, available at http://www.afi-
global.org/sites/default/files/publications/2014_maya_declaration_progress_report_final_low_res.pdf . 
1.3.  The involvement of the Gr oup of Twenty (G-20) has provided further momentum to the 
financial inclusion agenda. In 2009, the G-20 made the topic one of its pillars at the Pittsburgh Summit. The following year, the G-20's Financial Inclusion Experts Group (FIEG) released its nine 
"Principles for Innovative Financial Inclusion", intended to "form the basis of a concrete and 
pragmatic action plan for improving access to financial services amongst the poor" (Box 2). At the G20 Summit in Seoul (November 2010), the leaders of the G20 endorsed a concrete Financial 
Inclusion Action Plan.
 4 Subsequently, the G-20 leaders announced the establishment of the Global 
Partnership for Financial Inclusion (GPFI), an inclusive platform for all G-20 and interested non-G 20 countries and relevant stakeholders to carry out work on financial inclusion, including 
implementation of the G20 Financial Inclusion Action  Plan. The GPFI work is carried out by the so-
called 'implementing partners', namely the Alliance for Financial Inclusion (AFI), the Consultative Group to Assist the Poor (CGAP), the International Finance Corporation (IFC), the Organisation for Economic Co-operation and Development (OECD) and the World Bank.  
1.4.  The issue of financial inclusion has not been alien to the United Nations either. In May 2013, 
the UN Secretary-General’s High-Level Panel of  Eminent Persons on the Post-2015 Development 
                                               
2 For a recent survey and discussion  of the impact of financial inclusion on economic development, see 
Cull et al. (2014) and World Bank (2013a).  
3 See http://www.afi-global.org/maya-declaration-afi-member-commitment-financial-inclusion . 
4 See the G-20 Seoul Summit Leaders' Declaration (11-12 November 2010), available at 
http://www.g20.utoronto.ca/summits/2010seoul.html . S/FIN/W/88 
 
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  Agenda presented its recommendations for the post-2015 UN Development Goals, which included 
universal access to financial services as a critical enabler for job creation and equitable growth.5  
Box 2. G-20 Principles for i nnovative financial inclusion 
 
1. Leadership: Cultivate a broad-based government commitment to financial inclusion to help 
alleviate poverty. 
 
2. Diversity: Implement policy approaches that  promote competition and provide market-based 
incentives for delivery of sustainable financial access and use of a broad range of affordable 
services (savings, credit, payments and transfers,  insurance) as well as a diversity of service 
providers. 
 
3. Innovation: Promote technological and institutional innovation as a means to expand financial 
system access and use, including by addressing infrastructure weaknesses. 
 
4. Protection: Encourage a comprehensive approach to consumer protection that recognises the 
roles of government, providers and consumers. 
 
5. Empowerment: Develop financial literacy and financial capability. 
 
6. Co-operation: Create an institutional environment with clear lines of accountability and co-
ordination within government; and encourage partnerships and direct consultation across 
government, business and other stakeholders. 
 
7. Knowledge: Use improved data to make evidence-based policy, measure progress, and consider 
an incremental ‘test and learn’ approach acceptable to both regulator and service provider. 
 
8. Proportionality: Build a policy and regulatory fr amework that is proportionate with the risks and 
benefits involved in such innovative products and services and is based on an understanding of the 
gaps and barriers in existing regulation. 
 
9. Framework: Consider the following in the regulatory framework, reflecting international 
standards, national circumstances and support for a competitive landscape: an appropriate, 
flexible, risk-based anti-money laundering and combating the financing of terrorism (AML/CFT) 
regime; conditions for the use of agents as a customer interface; a clear regulatory regime for 
electronically stored value; and market-based incentives to achieve the long-term goal of broad 
interoperability and interconnection. 
Source: http://www.afi-global.org /sites/default/files/a fi%20g20%20principles.pdf . 
1.5.  All these initiatives have given rise to a profuse literature over the last few years.6 The 
purpose of this Note is not to replicate that literature but to discuss financial inclusion from a trade policy perspective, addressing also the role that the GATS may play in that regard. In order to 
frame that discussion in the appropriate contex t, some necessary background on fundamental 
issues related to financial inclusion will be provided. The Note is organized as follows. The next section briefly discusses the definition of financial inclusion, and its relationship with other concepts, such as access to finance. Section 3 focuses on measurement and presents a snapshot 
of financial inclusion across the world. Section 4 provides an overview of strategies and policies 
pursued by governments with a view to achieving further financial inclusion. Section 5 discusses the role that the GATS and trade negotiations may play in support of financial inclusion initiatives. 
The final section concludes. 
2  THE DEFINITION OF FINANCIAL INCLUSION 2.1.  The term financial inclusion has acquired a multitude of meanings. According to the World 
Bank, financial inclusion is "the proportion of individuals and firms that use financial services."
7 
                                               
5 United Nations (2013). 
6 For example, the latest issue of the World Bank's Global Financial Development Report, issued at the 
end of last year, focused entirely on financial inclusion. See World Bank (2013a).  
7 World Bank (2013a), chapter 1. S/FIN/W/88 
 
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  The Centre for Financial Inclusion (CFI) defines it as "a state in which all people who can use them 
have access to a suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the clients. Financial services are delivered by a range of providers, most of them private, to a financially capable clientele."
8 The Consultative Group to Assist the Poor 
(CGAP) defines financial inclusion as a situation in which "households and business have access 
and can effectively use appropriate financial services. Such services must be provided responsibly and sustainably in a well regulated environment."
9 
2.2.  The United Nations has focused instead on the concept of "inclusive finance", i.e. a 
continuum of financial institutions that, together, offer appropriate products and services to all segments of the population. Inclusive financ e would be characterized by: (a) access at a 
reasonable cost of all households and enterprises to the range of financial services for which they 
are "bankable", including savings, short and long-term credit, leasing and factoring, mortgages, 
insurance, pensions, payments, local money transfers and international remittances; (b) sound institutions, guided by appropriate internal  management systems, industry performance 
standards, and performance monitoring by the market, as well as by sound prudential regulation 
where required; (c) financial and institutional sustainability as a means of providing access to financial services over time; and (d) multiple providers of financial services, wherever feasible, so 
as to bring cost-effective and a wide variety of alternatives to customers (which could include any 
number of combinations of sound private, non-profit and public providers).
10 
2.3.  A distinction is usually drawn between access to and use of financial services, the former 
being primarily about the supply of services, whereas the latter is basically determined by 
demand.11 Some individuals and firms may choose not to use financial services, even if available 
at reasonable prices, either because they already have some indirect access through someone else's bank account, or because of cultural or religious reasons. In such situations, the non-use is 
driven by lack of demand.
12 Some individuals and firms may be involuntarily excluded from the 
use of financial services for different reasons. For example, some may be "unbankable" from the 
perspective of commercial financial institutions and markets because of insufficient income or 
excessive lending risk. In this case, lack of us e may not be caused by market or government 
failure. Others may be involuntarily excluded because of various forms of discrimination; deficiencies in the contractual and information frameworks; unavailability of financial services and products adapted to specific customer groups; price barriers due to market imperfections; and 
inadequate regulation.  
2.4.  Even though it is possible to distinguish be tween use of and access to financial services, both 
concepts are closely related and policy makers tend to adopt a broad definition of financial 
inclusion that combines both aspects
13 or that focus, instead, on its various components, namely 
access to financial services, use of financial services, quality of financial services, and the impact of financial services in terms of welfare improvement.
14 Others even consider that financial 
inclusion is composed of the availability and use of financial services and products, as well as 
financial capability, i.e. the ability to make informed financial decisions.15 In fact, financial inclusion 
is a complex and multi-dimensional phenomenon.16 In that sense, the AFI has agreed on three 
main dimensions of financial inclusion: access, usage and quality (Table 1). 
                                               
8 CFI (2013), chapter 1. 
9 See http://www.cgap.org/topics/financial-inclusion . The Consultative Group to Assist the Poor is a 
global partnership of 34 leading organi zations that seek to advance financial inclusion. Housed at the World 
Bank, CGAP develops innovative solutions through prac tical research and active engagement with financial 
service providers, policy makers, and funders to enable approaches at scale.  
10 United Nations (2006), chapter 1, p. 17. 
11 World Bank (2013a), chapter 1. 
12 Financial literacy can still improve awareness and generate demand. Also, non-use for religious 
reasons can eventually be addressed by allowing the entry of financial institutions that offer specialized products, as in the case  of Islamic finance. 
13 For example, for the Reserve Bank of India, "financi al inclusion, broadly defi ned, refers to universal 
access to a wide range of financial services at a reasonable cost". See Vijaya Bhaskar (2013). 
14 See Rarawa (2014) for the definition of financial inclusion in the Solomon Islands.  
15 Deb and Kubzansky, 2012. 
16 International Finance Corporation (2011). S/FIN/W/88 
 
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  Table 1. Dimensions of Financial Inclusion 
Access Availability of formal, regulated financial services: physical proximity, affordability. 
Usage Actual usage of financial services and products: regularity, frequency, du ration of time used. 
Quality  Products are well tailored to client needs. A ppropriate segmentation to  develop products for 
all income levels. 
Source: Triki and Faye (2013). 
2.5.  These three dimensions of financial inclusion have provided the underpinning for data 
collection and measurement. Although it is generally recognized that efforts to promote financial 
inclusion should strive to improve all three dimensions simultaneously, when setting priorities for measurement, a number of countries are now gathering information sequentially, assessing access 
first, usage second, and examining quality third. This is often because in most countries, data on 
the level of service provision is more easily obtained than data on usage and quality.
17  
2.6.  In what follows, this Note will take a broad approach, looking into both use of and access to 
financial services, and the initiatives, policies and regulations directed at encouraging demand 
and/or expanding the supply of financial services  among those layers of population in need.  
3  THE MEASUREMENT OF FINANCIAL INCLUSION 3.1.  Until recently, financial inclusion used to be measured by reference to density indicators, 
such as the number of bank branches or automati c teller machines (ATMs) per capita. Much of this 
information on the provider's side of financial inclusion is now collected as part of the World Bank's Financial Access Survey, which has annual data for 187 jurisdictions from 2001 to 2011. While 
these indicators have made it possible to obtain basic provider-side information on the use of 
financial services, relatively little was known until recently about the global reach of the financial sector, that is, the extent of financial inclusion and the degree to which various population 
segments were excluded from formal financial sy stems. This gap in data has now been addressed 
with the release of the Global Financial Inclusion (Global Findex) Database, built by the World Bank, in cooperation with the Bill and Melinda Gates Foundation and Gallup, Inc.
18 
3.2.  Global Findex provides a new set of indicators that measure how adults (aged 15 years and 
above) in 148 economies save, borrow, make payments, and manage risk. The data are based on 
a survey of more than 150,000 nationally repr esentative and randomly selected adults in 
148 economies, covering over 97% of the world's adult population during the 2011 calendar year. 
The results of this first survey were launched in April 2012. The 2014 Global Findex database - 
based on another 150,000 interviews - will update the 2011 indicators and also include an extended module on payments, providing in-depth da ta on individuals' payments activities related 
to domestic remittances, government-to-person transfers, wages, formal obligations, and mobile 
payments. The 2014 Global Findex database is scheduled to be released in April 2015. The Global Financial Development Database, also developed by the World Bank, contains additional variables, 
such as cross-country indicators on the access of firms to securities markets. 
3.3.  The Financial Access Survey (FAS) by the IMF is another important source of information. The 
FAS contains global supply-side data on financial inclusion, encompassing internationally-comparable basic indicators of financial access an d usage. From 2014, FAS also includes indicators 
for mobile money. The FAS database currently contains 152 time series and 47 key indicators 
which are grouped into two dimensions: (i) geographic outreach of financial services; and (ii) use of financial services. The database includes annual data from 2004.  
                                               
17 Triki and Faye (2013). 
18 The database is available at: 
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDE C/EXTRESEARCH/EXTPROGRAMS/EXTFINRES/EXTGLOBA
LFIN/0,,contentMDK:23147627~pagePK:64168176~piPK:64168140~theSitePK:8519639,00.html . S/FIN/W/88 
 
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  3.4.  In June 2012, at Los Cabos Summit, the G-20 endorsed the "G20 Basic Set of Financial 
Inclusion Indicators", which integrates existing global data efforts to compile indicators on the access to and use of financial services (Table 2). They include data from three databases: the Global Findex, the World Bank Financial Access an d Enterprise Surveys, and the IMF FAS. At the 
St. Petersburg Summit (September 2013), the G-20 endorsed the G20 Financial Inclusion 
Indicators developed by the GPFI. These indicators represent a comprehensive set of data capturing the different dimensions of financial inclusion: (i) access to financial services; (ii) use of 
financial services; and (iii) the quality of the products and the service delivery. The aim is to assist 
all countries in forming a basic appreciation of the state of financial inclusion worldwide.  
3.5.  In the brief analysis that follows, we draw from the data available in the World Bank's Global 
Financial Development Database, making use of both demand-side and supply-side data to 
characterize financial inclusion around the world.
19 The relevant information is contained in Tables 
A1, A2 and A3 in the Annex.20 
3.6.  In looking at supply-side evidence, traditio nally, the presence of a bank branch or an ATM 
has typically been considered a prerequisite for financial inclusion, as they constitute gateways for 
individuals and firms to access financial services. As shown in Table A3, the median number of branches (2.7) and ATMs (3.2) per 100,000 adults in low income countries is much smaller than 
that in high income countries (27.7 branches and 73.4 ATMs per 100,000 adults) and around the 
world (16.6 branches and 37.2 ATMs). Table A2 shows the breakdown for different regions.  
3.7.  The demand and use of financial services is  usually gauged by examining data on the number 
and use of bank accounts, other means of paymen ts (checks, debit and credit cards, mobile 
phones, other electronic means), information on loans outstanding from different sources (financial 
institutions, private lenders, employers, family or friends), as well as – in the case of firms – the use of credit products. Bank accounts are a key measure of financial inclusion because essentially 
all formal financial activity is tied to accounts. Globally, only 50 per cent of the adult population — 
more than 2.5 billion people — do have a formal bank account. Looking beyond global averages, financial inclusion varies widely around the world. In developed economies, 90% of adults report 
that they have an account at a formal financial institution, while the share is only 13.4% in low 
income economies. In Sub-Saharan Africa, fewer than 1 in 5 adults has a bank account, while in developing countries in East Asia and the Pacific,  Latin America and the Caribbean and North Africa 
and the Middle East, around 1 in 4 adults has a bank account.  
3.8.  The percentage of population in low income countries actually using those bank accounts is 
significantly lower than the proportion in higher income economies. Noncash methods of payment are becoming more important, but they still lag behind cash methods in terms of penetration. 
Debit and credit cards account for a large part of noncash retail transactions. While almost 70% of 
the population in high income countries have debit cards, roughly 3% of the population in low income economies have one. Only a small fraction of adults are using mobile payments, although 
this area has shown much promise (see discussion  below). In high income economies, mobile 
phones tend to be used more frequently to pay bills than to send money, while the opposite is usually found in lower income countries. 
3.9.  Most borrowing by adults occurs through informal sources, such as family and friends. 
Financial institutions appear as a second source of financing throughout the world. Globally, 8.4% 
of adults report they originated a new loan from a formal financial institution in the previous months. However, in low income economies, that percentage can be as low as 6%. After these two 
sources, private lenders appear as a more significant source of financing in lower income countries 
than in high income countries. 
3.10.  Many of the findings on financial inclusion concerning individuals are also applicable to 
firms. Most investments are internally financed by firms. Among the external sources of finance 
available, banks are the most-widely used option and represent, on average, 20% of investment 
financing worldwide. In the case of small firms, only 16% of investment is financed through a bank loan or line of credit. The proportion of firms using banks to finance investments and working 
                                               
19 The Global Financial Development Database is available at: http://data.worldbank.org/data-
catalog/global-financial-development . 
20 For comprehensive data, see the Global Findex and Global Financial Development Databases, and 
World Bank (2013a).  S/FIN/W/88 
 
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  capital is higher in low and middle income countries (between 20% and 23%) than in upper-
middle income countries (2.7%), where firms may have access to other sources of finance, such as capital markets. It is no wonder therefore that  a significant proportion of firms around the world 
(40%) identify access to finance as a major constraint. In addition, a very high proportion of those 
loans require collateral, which may amount to almost 250% of the value of the loan in low income 
countries.  
Table 2. G-20 Basic Set of Fi nancial Inclusion Indicators 
Categories Indicators Existing 
Global/Multi-country 
source Dimension of 
Financial Inclusion 
Measured 
Formally banked 
adults % of adults with an account 
at a formal financial 
institution Global Findex Usage 
Number of depositors per 
1,000 adults OR number of 
deposit accounts per 1,000 
adults IMF FAS  
Adults with credit by 
regulated institutions % of adults with at least one 
loan outstanding from a 
regulated financial institution Global Findex Usage 
Number of borrowers per 
1,000 adults OR number of 
outstanding loans per 1,000 
adults IMF FAS 
Formally banked 
enterprises % of SMEs with an account at 
a formal financial institution World Bank Enterprise 
Surveys Usage 
Number of SMEs with deposit 
accounts/number of deposit 
accounts OR number of SME 
depositors/number of 
depositors IMF FAS 
Enterprises with 
outstanding loan or 
line of credit by 
regulated institutions % of SMEs with an 
outstanding loan or line of 
credit World Bank Enterprise 
Surveys Usage 
Number of SMEs with 
outstanding loans/number of 
outstanding loans to 
SMEs/number of outstanding 
loans IMF FAS 
Points of services Number of branches per 
100,000 adults IMF FAS Access 
Source: Global Partnership for Financial Inclusion (GPFI), available at:  
http://www.gpfi.org/sites/default/files/G20%20Basic %20Set%20of%20Financial%20I nclusion%20Indicators.p
df. 
 
4  FINANCIAL INCL USION STRATEGIES 
4.1.  Numerous countries – both developing and developed – have adopted strategies and policies 
to promote financial inclusion. Those initiatives are directed at addressing three primary barriers to financial inclusion
21:  
• Supply-side barriers that impede service provision, such as high transaction costs, high 
fixed costs to build a branch network in rural or far-away areas, lack of reliable 
information on individuals' or firms' credit record, and lack of knowledge about how to serve poorer customers;  
                                               
21 Staschen and Nelson (2013). S/FIN/W/88 
 
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  • Demand-side barriers that restrict the capacity of individuals to access available services 
and products, including socio-economic factors (e.g. lack of income), cultural and religious factors, lack of formal identification systems, low levels of financial literacy, distrust of financial institutions, and lack of necessary documentation and/or collateral to 
support financial transactions; and  
• Poor regulatory frameworks that may affect both the demand and the supply of financial 
services, such as inadequate consumer protection, poor contract enforcement, 
regulatory impediments to branch establis hment and expansion, and even uncoordinated 
regulatory frameworks that impede innovative solutions (e.g. Branchless banking).  
4.2.  With many economies embracing financial inclusion as a policy objective, financial regulators 
have come to play a more significant role in that regard. A survey conducted by CGAP in 2010 
asked financial regulators which of the following topics relevant for a financial inclusion agenda 
were under the purview of their agency
22: consumer protection, financial capability, microfinance 
regulation, promotion of savings, promotion of access to finance for SMEs, and promotion of rural 
finance. The survey revealed that in 88% of ec onomies regulators were responsible for at least 
one of those elements of financial inclusion. In  18% of the economies, all these elements of 
financial inclusion are within the financial regulator's mandate. However, the focus seemed to be 
different in high income countries and in low- and middle-income countries. In high-income 
countries, where financial systems already cover most of the population, regulators tend to focus on consumer protection and financial literacy. In low- and middle-income countries, the agenda is much broader and includes promotion of financial access, in addition to consumer protection and 
financial literacy. 
4.3.  More recently, the Financial Inclusion Stra tegies Database (FISD), developed by the World 
Bank, has compiled summary information on 56 developing countries that have either made 
commitments under the AFI's Maya Declaration or have been identified by the Financial Inclusion 
Strategy Peer Learning Group as having significant national strategies.
23 National strategies 
present common features. The strategies' overall aim tends to be empowering people by 
improving their access to financial services. The strategies generally involve a mix of numeric 
targets and policy areas of commitment such as improving consumer protection, financial literacy, expansion of mobile financial services and microfinance. 
4.4.  A majority of countries (roughly 60%) have identified the improvement of financial literacy, 
the upgrade of the regulatory framework to enha nce financial access, and improvements in data 
collection and measurement as the main policy objectives. A significant share of countries target the improvement of consumer protection and the expansion of mobile financial services. Several 
elements of the national financial inclusion strategies are specific to a few countries, reflecting 
particular features and existing barriers to financial inclusion. These include the development of national level identification schemes, payment system reform, the development of the 'agent 
banking' model (i.e. the delivery of financial services by non-bank financial institutions), the 
provision of and access to microfinance, and the establishment of credit information systems (e.g. credit information bureau).  
4.5.  There are also similarities in the institutional framework for financial inclusion. The FISD 
shows that in 40 of the 56 countries (71%), the st rategy's lead agency is the respective central 
bank. The strategies generally involve other institutions, such as the ministry of finance or a financial supervision agency (when separate from  the central bank). The central bank is more 
likely to be a lead agency in jurisdictions where it is also an integrated financial sector supervisor. 
                                               
22 CGAP/World Bank (2010). 
23 The FISD has been developed as one of the support ing materials for the World Bank Global Financial 
Development Report 2014. Several other countries have national strategies (such as the Financial Inclusion Taskforce in the United Kingdom), but are not included in this database. Nonetheless, the FISD presents a 
comprehensive and representative outlook of initiatives in this area. The FISD is available at 
http://econ.worldbank.org/WBSITE/EXTERNAL/EXT DEC/EXTGLOBALFINREPORT /0,,contentMDK:23491959~pag
ePK:64168182~piPK:64168060~theSitePK:8816097,00.html . S/FIN/W/88 
 
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  5  POLICIES AND REGULATIONS TO PROMOTE FINANCIAL INCLUSION 
5.1.  In this section, we will describe the mo st frequent policies and regulations adopted by 
governments with a view to promoting financial inclusion. The purpose is not to pass judgement 
over the effectiveness of each policy and regu lation, but rather to provide the necessary 
background for further discussion about those po licies and regulations in light of the GATS 
framework.24  
5.1.1  Consumer protection 
5.2.  By setting clear rules of conduct for financ ial firms regarding their retail customers, consumer 
protection aims at ensuring that consumers of financial services (1) receive information to allow them to make informed decisions, (2) are not su bject to unfair or deceptive practices, and (3) 
have access to recourse mechanisms to resolve disputes.  
5.3.  At the international level, the OECD developed High-level Principles on Financial Consumer 
Protection, which were endorsed by the G20 Finance Ministers and Central Bank Governors in 2011 (Box 3). A G20/OECD Task Force on Financial Co nsumer Protection is now engaged in supporting 
the implementation of these principles, th rough the production of specific reports.
25 A first update 
report26 on effective approaches to support the implementation of the High-level Principles was 
developed around three principles considered to be a priority: disclosure and transparency; 
responsible business conduct of financial services  providers and their authorised agents (fair 
treatment); and complaints handling and redress (effective recourse). These three principles have also been identified by CGAP as the focus for government action in countries characterized as "low access environments" (where levels of financial access and financial literacy are low and regulators 
face significant capacity constraints).
27  
Box 3. OECD High-level Principles on Financial Consumer Protection 
 
1. Inclusion of financial consumer protection within the legal, regulatory and supervisory 
 framework 
2. Existence of oversight bodies (dedicated or not) explicitly responsible for financial consumer 
 protection, with the necessary authority to fulfil their mandates 
3. Equitable and fair treatment of consumers 
4. Disclosure and transparency 
5. Financial education and awareness 
6. Responsible business conduct of financia l service providers and authorised agents 
7. Protection of consumers' assets against fraud and misuse 
8. Protection of consumer data and privacy 
9. Complaints handling and redress 
10. Competition. 
Source: OECD High-level Principles on Financial Consumer Protection, October 2011, available at: 
http://www.oecd.org/daf/fin/financial-markets/48892010.pdf . 
5.4.  The principle of disclosure and transparency  aims at ensuring that consumers are given 
complete, clear and not misleading information ab out financial products and services. It targets 
two interrelated objectives: i) increased consumer comprehension of different financial products and services; and ii) increased market competition, as better informed consumers may compare 
different offers and force financial service suppliers to offer better products and services at lower 
prices. Disclosure and transparency are usua lly ensured through requirements mandating 
disclosure of terms, costs, risks and obligations associated with specific products or services. Regulations aimed at enhancing disclosure and transparency usually govern both the content 
provided to the consumer and how that information is communicated for effective comprehension 
(e.g. orally or in writing, through standardized forms).  
                                               
24 For further analysis of the effects of various types of policies, see Beck et al. (2009). 
25 See http://www.oecd.org/finance/financial-educat ion/g20-oecd-task-force-financial-consumer-
protection.htm . 
26 G-20/OECD Task Force on Financial Consumer Protection (2013). 
27 Brix and McKee (2010). S/FIN/W/88 
 
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  5.5.  Fair treatment  refers to ethical staff behaviour, the sale of appropriate products, acceptable 
marketing practices, and reasonable collections pr actices. Regulations to ensure fair treatment 
include rules governing truth in advertising, and codes of ethics (including rules governing fair debt collection and prohibiting intimidation and coercion). Effective recourse  is necessary for 
consumer trust in the formal financial system. Consumer recourse mechanisms, such as 
specialized help desks within financial institutions, not only handle complaints, but also often handle questions and can play a role in facilitating consumer comprehension of disclosed 
information. Sometimes the regulatory agency takes responsibility for this function, and 
sometimes it assigns the role to an industry association, ombudsman, or other entity.  
5.6.  It is worth noting in that regard that in  2013 the World Bank published a compilation of good 
practices for financial consumer protection, based on reviews of consumer protection and financial 
literacy regulation in 114 economies.
28 The Good Practices are a compilation of the most frequently 
used practices that have been successfully carrie d out in the field. They represent a summary of 
useful approaches for the improvement of conduct of financial institutions when dealing with retail 
customers and aim to provide a reference for policymakers in designing their financial consumer 
protection frameworks. Table A4 shows major aspects of disclosure regimes in selected countries. 
5.1.2  Financial education 
5.7.  Financial education  is closely related to consumer protection insofar as it also aims to protect 
the consumer from abusive business practices, but from a different perspective. Thus, instead of focusing on specific requirements imposed on financial service suppliers to ensure that fair and transparent behaviour, financial education seeks to empower financial service users so that they 
are better equipped to protect and enforce their rights. While originally the approach towards 
financial education focused on financial literacy , i.e. the knowledge about financial products and 
services, the need to move towards informing consumers' attitudes and behaviour has led to the 
notion of financial capability . This approach is based on the premise that what matters most is not 
what consumers know about financial services and products but how they actually behave in relation to them. In other words, financial capability is the ability to apply that knowledge to make 
informed decisions.
29 
5.8.  Financial capability has different operational implications for the financial regulator than 
consumer protection.30 Consumer protection is often implemented through market conduct 
regulation and supervision as part of traditional regulatory and supervisory activities the financial 
regulator undertakes on a regular basis for other to pical areas. Promoting financial capability, on 
the other hand, requires different skill sets and operations. Consequently, although many economies report interventions in financial capability as part of the regulator's priorities, there is a 
great deal of diversity among the types of activiti es carried out. For example, seldom is the full 
design and implementation of financial literacy  programs conducted entirely by the financial 
regulator. Financial literacy programs are more commonly cross-cutting initiatives, spanning 
several departments within the financial regulator, or several government agencies, including 
ministries of finance, superintendents, or deposit insurance agencies. The role of the regulator can therefore be one of coordination, consulting with private partners and financial institutions, or, less frequently, implementation. 
5.1.3  Branchless banking, including mobile  banking (and other financial services) 
5.9.  Branchless banking is the delivery of financ ial services outside conventional bank branches, 
through the use of alternative access points for clients. These include self-serve solutions, such as 
mobile phones or ATMs; banks' staff-based transaction points, such as mobile branches that visit 
underserved areas on specific days; and third-party agents, including retailers using card-reading point-of-sale (POS) devices, mobile phones, or computers connected to the Internet. Branchless 
product offerings range from individual money transfers and government cash transfers to full-
service banking (e.g. deposit-taking, withdrawal of funds, loan disbursement and payments) and 
even insurance premium payments or insurance pay-outs. 
                                               
28 World Bank (2013b). 
29 Deb and Kubzansky (2012). 
30 CGAP/World Bank (2010). S/FIN/W/88 
 
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  5.10.  Two models of branchless banking can be distinguished, depending on the nature of the 
organization promoting the scheme: bank-based and non-bank-based.31 Both models make use of 
retail agents such as merchants, supermarkets or post offices to deliver financial services outside 
traditional bank branches. Both models require th erefore an ecosystem of players from different 
economic sectors.32 In the bank-based model, every customer has a direct contractual relationship 
with a licensed and supervised financial institution - whether account-based or involving a one-off transaction - even though the customer may deal  exclusively with a retail agent who is equipped 
to communicate directly with the bank (typically using either a mobile phone or a point-of-sale 
(POS) terminal).  
5.11.  In the non-bank-based model, customers have no direct contractual relationship with a fully 
licensed and supervised financial institution; instead, the customer exchanges cash at a retail 
agent (or otherwise transfers, or arranges for the transfer of, funds) in return for an electronic 
record of value. This virtual account is stored on the server of a nonbank, such as a mobile 
operator or an issuer of stored-value cards. The balance in the account can be used for making 
payments, storing funds for future use, transferring funds or converting back to cash at agents. If 
the system relies on a POS network and plastic cards, customers must visit a participating retail agent to conduct a transaction. If the system is  mobile phone-based, customers need to visit a 
retail agent only to add value or to convert stored value back into cash. A more limited version of 
the non-bank-based model can be found in payment networks, which involve a technology provider or other nonbank institution offering a network of "payment points" (for example, payment terminals, ATMs or retail agents equipped with POS devices) where a customer can make 
payments to third parties or a governmental entity can make payments to beneficiaries.
33 
5.1.3.1  The 'agent or correspondent banking' model 5.12.  While branchless banking channels offer cl ients more convenience and access points, POS 
devices on their own cannot accept deposits; Internet and mobile channels by themselves have no 
cash transaction capability; and mobile branches may not visit often enough to meet all the needs 
of clients. Thus these channels individually cannot replace traditional channels altogether. This is 
where agents enter the picture. An agent is basically any third-party acting on behalf of a bank or 
other financial services supplier in its dealings with customers.  
5.13.  As explained by Ledgerwood and Gibson (2013), "[a]n agent network is a group of retailers 
with existing businesses or retail locations who (primarily) provide cash-in, cash-out services. An 
agent may be any retailer conveniently located with reliable cash flow who can service clients 
seeking to deposit, withdraw, or send funds to a third party. Providers such as banks or MNOs 
often establish agent networks through a range of distribution networks, including airtime sellers, 
shopkeepers, retailers, traders, petrol stations, post  offices, or kiosks in markets. Agents charge 
transaction fees, but because they serve areas where most institutional providers are unable to reach, these fees are often lower than the cost of traveling to a bank branch or using a traditional 
money transfer company."  
5.14.  Agents can facilitate transactions via several access devices, including a POS device, a 
mobile phone handset, a tablet, or a personal comp uter. A client can deposit cash with an agent in 
one location, and those same funds can be withdraw n immediately by another client at a different 
location. Agents must have an account at a bank that has a secure, real-time transaction-
processing capability, either online using wireless or Internet connectivity or offline using smartcards capable of updating balances and recording transactions. A payments system or 
network is needed that allows the agent’s bank to account for and settle transactions with all 
participating client banks. 
5.15.  Consumer protection safeguards are also re quired to minimize exposure of bank clients to 
agent risk. Some providers use agents for more than simple transactions, such as providing 
account balances or notifying clients of payments coming due, delivering credit products, and, if properly licensed, delivering insurance products.  
                                               
31 Lyman et al. (2008). 
32 Dermish et al. (2012). 
33 For a thorough description of payment services and delivery channels, see Lehman and Ledgerwood 
(2013). S/FIN/W/88 
 
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  5.16.  Agents provide the customer interface. Th erefore, when developing a network of agents, 
providers must address the operational challenges in a way that fosters a positive and consistent customer experience that will create and maintain trust in the system. Strategies for enrolling, training, incentivizing, managing, and retaining agents are critical considerations for all providers 
that use agents to deliver financial services. Providers can hire and manage their own agents, or 
they can outsource this function. 
5.17.  The services that may be provided by bank agents can be divided roughly into four 
categories
34:  
1. Information transmission, which consists basically of providing the customer with 
account information (e.g., balance inquiries and bank statements) and receiving account and loan applications, including transmitting know-your-customer (KYC) information.  
2. Information processing, which includes the processing of account and loan 
applications (and in some cases, opening accounts), the analysis of credit and other personal information of loan applicants, cond ucting KYC procedures (i.e., verification) for 
account opening applications and transactions, record keeping, and the sale of 
microinsurance.  
3. Cash handling, which refers to deposits (usually called "cash in"), and withdrawals 
("cash out"), often limited to small values, to or from a customer’s own account.  
4. Electronic funds transfer, which may involve making bill payments, disbursing 
government benefits, and making salary payments.  
5.18.  Some countries allow agents to engage in all such activities, while others are more 
restrictive. As explained by Lauer et al. (2011), agents may engage in different activities, 
depending on applicable regulation and the terms of the agency agreement. Some agents provide 
only cash-in/cash-out services (these agents are often called "cash merchants"), while other 
agents are also allowed to enrol customers and provide a wider array of banking services. For 
example, the Reserve Bank of India (RBI) has established two types of agents: limited-scope 
business facilitators (BFs) and full-scope business correspondents (BCs). BFs are permitted only to 
identify borrowers, collect loan applications, and ve rify and do preliminarily processing of the data; 
process and submit account applications; and engage in consumer financial education. They are not permitted to engage in bankin g activities. BCs may engage in all of the activities permitted for 
BFs and may also disburse small-value credit, collect loan payments, perform small-value 
remittances, and assist in conducting KYC for account opening purposes. The Central Bank of 
Brazil has regulation that distinguishes between transactional agents (who engage in bill payments, withdrawals, and transfers) and corre spondent agents, who provide a wide array of 
services, including selling credit. 
5.19.  Agent management is of crucial importance for the functioning of these models. Subject to 
what is allowed under applicable regulation, a bank might choose among a variety of 
arrangements for managing agents, including the involvement of agent network managers 
(ANMs).
35 An ANM may perform a number of functions with respect to a bank's agents, such as 
selecting, contracting, training, managing, monitoring, and serving as liquidity manager. There are various ANM models, including most commonly (i) a specialized third-party operator to whom the 
bank outsources the agent management functions, (i i) a large retailer (or other entity with a large 
number of outlets) that, pursuant to its agency agreement with the bank, manages its outlets as agents of the bank, or (iii ) a third party that  signs an agency agreement with the bank and 
subcontracts with other legal entities or individuals, each of whom functions as an agent.  
5.20.  Table A5 shows a cross-country compar ison of agent-banking models in selected 
countries.
36  
                                               
34 Lauer et al. (2011). 
35 Ibid. 
36 For other national examples of mobile and agen t banking services, see The Banking with the Poor 
Network Ltd & The Foundation for Development Cooperation Ltd. (2013). S/FIN/W/88 
 
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  5.1.3.2  Mobile banking 
5.21.  Mobile network operators (MNOs) provide the ability to use mobile phones for financial 
services — either directly to consumers or on behalf of other financial service providers, usually through an agent network.
37 MNOs can provide money transfer and payment services directly 
without being linked to another financial service provider (mobile money), or they can partner with 
a  b a n k  o r  o t h e r  p r o v i d e r  t o  i n c r e a s e  o u t r e a c h  b o t h  i n  t e r m s  o f  n u m b e r s  a s  w e l l  a s  a v a i l a b l e  products (mobile banking). The role of MNOs in mobile banking can vary from simply selling text-
messaging services to providing a full-fledged parallel banking infrastructure.  
5.22.  There are primarily two models to provid e mobile banking services – bank-based and non-
bank based – each presenting many variations, depending on the unique circumstances in a particular country (see Table 3).
38 It is worth clarifying at this stage that we take a broad view of 
mobile banking, including not only the "banking" services that a typical commercial bank would 
supply but also other services that are usually part of a bank's business scope but that could also be supplied separately by specialized financial service suppliers, such as payments and money 
transfers.  
5.23.  In the bank-based model, banks make some of their services available through the use of a 
mobile device. A bank enters into an arrangement with a MNO to offer financial services either 
through text messaging or more elaborate smart phone applications. Customers can carry out a 
range of financial transactions without having to go to a physical bank facility. The customer establishes a direct contractual relationship with a licensed and supervised financial institution. However, the availability of mobile technology enables the unbundling of activities traditionally 
conducted at a bank's branch office. As seen in the previous section, the financial institutions may 
use a wide variety of agents to provide services and reach its customers. Those agents may simply provide commercial or transactional services (e.g. customer service, record-keeping, cash 
handling, and liquidity management) or indeed engage in a broader range of services, including 
account opening, and cash-in and cash-out services  (including disbursement of loans and person-
to-person transfer services). An advantage of this  model is that requirements to mitigate risks, 
address data security, and protect the consumer at large are already established as banks are 
already required to comply with such requirements and regulations. Although banks would still need to adapt their operations to ensure that those requirements are met even when financial 
services a delivered through mobile devices and/ or agents, customers may find greater comfort 
that the traditional brick and mortar bank is stan ding behind the service. However, a disadvantage 
of the bank-based model is that it may result in a more limited reach than a non-bank based model, depending on the level of interaction customers are required to have with a bank.  
Table 3: Different arrangemen ts of the bank-based model 
Arrangement Description 
One-to-one Exclusive arrangement betw een a bank and a mobile operator. 
One-to-many The bank provides m-banking services through multiple operators or a mobile operator 
provides m-banking through multiple operators. 
Many-to-many The banks and mobile operators all provide m-banking services, and exclusivity is not 
permitted 
Source: Hernández et al. (2011) 
5.24.  In the non-bank based model, customers ha ve no direct contractual relationship with a 
regulated financial institution. Instead, they conduct transactions at a retail establishment in return for an electronic record of value (i.e. a record in a virtual account on the server of the non-
bank entity). In this model, a mobile phone can be  transformed into a virtual wallet and utilized to 
make payments, transfer funds, and convert virtual money into cash without the need for a bank. Non-bank based models typically target the unbanked. Customers can order payment of funds to 
anyone participating in the system and can receive payments from them. Customers can also 
transfer money between accounts and pay bills. 
                                               
37 Ledgerwood and Gibson (2013). 
38 Hernandez et at. (2011). S/FIN/W/88 
 
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  5.25.  In this model, MNOs are generally key to providing the service and managing the customer 
relationship. The main advantage of this model is that it can more easily enhance access to financial services for low-income people and rura l areas because the customer does not need to 
engage in a direct contractual relationship with  the bank and due to the reach provided by the 
MNO network. The model is not without disadvantages, though. One of the main challenges is to 
ensure that sufficient capital is in place to mitigate any financial risk due to a lack of funds within the system, which could in turn affect the liquidit y of the system and the availability to provide 
cash to customers. A further challenge is to ensure adequate consumer protection, particularly 
when MNOs also use retail agents to serve as points of contact for transactions. While agents are used in the bank-based model, the distinction here is that those agents are subject to banking regulations and requirements, while agents in the non-bank based model are not.  
5.1.4  The role of post offices 
5.26.  With 662,000 post offices worldwide in 2011,  postal systems are one of the most extensive 
retail networks worldwide, far ahead bank bran ches and ATMs, which totalled 523,000 worldwide, 
according to IMF statistics on financial access for 2010.
39 In 2010, 51 postal operators held 1.6 
billion savings and deposit accounts for a billion people and more than 1.5 billion customers accessed basic transactional services through the Post. However, the postal network is still 
underused to promote financial inclusion since not all post offices offer the full range of financial 
services. 
5.27.  Business models used by post offices vary significantly from country to country. A recent 
report under the auspices of the Universal Postal  Union (UPU) has identified five main business 
models (BMs) used by postal operators around the world, based on the level of engagement of the 
Post in the offer of financial services.
40 Only 8 postal offices around the world are not involved in 
the delivery or offer of financial services; they simply provide their office space to banks in 
exchange for a fixed monthly rent. It is common in these cases to see booths inside the main hall 
of the post office, which carry the brand, and are managed by staff, of the financial service 
provider concerned.  
5.28.  In the first business model identified by the UPU ("cash merchant for transactional financial 
services"), the Post offers a single private partner or multiple partners the use of its offices and staff for transactional financial services. The Post usually charges a fee per transaction. In this cash-merchant model, financial institutions, government authorities and utility companies, among 
others, use the postal network and staff to reach potential customers in underserved regions. 
Technology is an important factor in this model, since the use of computers linked to the Internet, 
point-of-sale (POS) terminals and other mobile devices is what allows customers to perform 
transactions through the Post in a secure and efficient manner. This model is the one most widely 
used by Posts worldwide (116 countries, 83% of the total). It is the easiest to implement and does 
not require much initial investment. There are several sub-models depending on the scope of 
services that the Post actually performs, i.e.  operation of remittance services; government 
payments; bill collection; cash-in and cash-out; collection of insurance premiums and pay-out of insured amount; loan disbursement and repayment; or deposit and withdrawal from accounts. 
5.29.  In the second model ("proprietary transactional financial services"), the Post is basically 
used to make payments, either national or international. Post offices that operate this business 
model have developed or acquired their own self-operated payments and money transfer 
platforms. Domestic payments are channelled through the Posts' own platforms and systems, 
while international payments require the collaboration with post offices abroad. This model, which 
is present in 88 countries worldwide (63% of the total), generally requires a bigger investment and more involvement on the part of the Post office. Although widely present in all regions, it is 
particularly developed in South Asia and the Middle East and North Africa regions, whereas Latin 
America and the Caribbean is the region with the lowest use of this model. 
5.30.  In the third model ("partnership with a financial service supplier"), the Post acts as an agent 
for financial service suppliers, such as banks, sa vings banks, insurance companies or eve MNO for 
financial services. The main difference between this model and the first one is that in the agent 
                                               
39 Berthaud and Davico (2013). 
40 The report contains a table that presents the business models adopted by post offices in 139 
countries around the world. S ee Berthaud and Davico (2013). S/FIN/W/88 
 
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  partner business model both parties are much more committed to the partnership, since it is in 
most cases an exclusive one. Sometimes the commitment can take the shape of investment by the financial service supplier in upgrading the network or providing cash logistics. In this business model the Post usually offers the whole range of products of its partner. In terms of revenue 
sharing, the agreement is usually similar to the one in the cash-merchant model, i.e. A fee per 
transaction. Sometimes, however, in addition to the fee the financial services supplier has to pay an entry fee to access the network of the postal operator. The model has been adopted by 34 
countries (24.5% of the total), particularly in Eastern Europe, Central Asia and East Asia Pacific.  
5.31.  The three prior business models, which involved a partner in order to supply financial 
services, were classified according to the level of involvement of post offices in the delivery of financial services. In the next two models, the paradigm shifts and it is the Post, not a financial 
service supplier, which develops and offers its own financial services (e.g. savings accounts, 
money transfers, life insurance). Thus, business mo del 4 includes Post offices which offer financial 
services (e.g. savings accounts, postal giro and insurance policies) without being licenced as a 
financial institution. In this model, the postal operator is under the supervision of its line ministry 
or postal regulator. This model has been adopted by 34 countries around the world (24.5% of the total), notably in Africa, Western Europe, South Asia and East Asia Pacific. 
5.32.  In the fifth business model, the Posts establish their own Postal banks, by getting a 
microfinance licence, a limited banking licence or a full banking licence. The microfinance licence is rather limiting in terms of financial services offered and access to payment systems. It is mostly used by postal operators to offer micro-credit to their clients. This option has been adopted by 3 
countries. Limited banking licences allow postal operators to offer only certain financial products 
and services to the general public, usually saving instruments but not credit; while full banking licences allow them to offer the full range of financial products and services, including loans to 
companies. Limited banking licences and full banking licences have been granted to postal 
operators in 2 and 7 countries, respectively.  
5.1.5  Direct State interventions 
5.33.  Governments usually resort to various forms of direct intervention, designed to impose upon 
financial service suppliers an obligation or prohibition to provide specific financial services, and to regulate financial services supply in order to ensure financial inclusion. This section reviews four types of direct intervention, namely (i) the obligation imposed on financial institutions to offer 
"basic accounts" with low or no fees and low minimum balances; (ii) directed credit policies; 
(iii) the channelling of government payments directly to individual bank accounts; and (iv) bank sub-branching regulation.  
5.34.  Historically, governments have used directed credit policies  as a way to improve access to 
credit for underserved sectors or layers of popula tion. These policies are based on the theory that 
socially beneficial projects may be underserved by the financial sector because of under-priced 
risks, information asymmetries or high transaction costs that the private sector is unwilling to 
bear.
41 These policies may take various forms, including: a) mandatory lending requirements, 
whereby commercial banks are required to lend a certain portion of their portfolio to specific sectors or populations; b) refinancing schemes, which allow banks to borrow funds from the 
Central Bank for specific use at a rate lower than market rates; c) interest rate subsidies, whereby 
government charge a below-market interest rate for a specific line of credit and specify interest rate ceilings (on deposits or loans, or both); d) credit guarantees, whereby a Central Bank or a 
government agency bears part of the risk of the loan; and e) interest rate ceilings.  
5.35.  A recent study shows, for example, that in  Asia, the most common form of priority sector 
lending nowadays is the imposition of lending quot as, usually as a percentage of overall lending, 
sometimes complemented by sub-quotas for specific  sectors (e.g. agriculture) or borrowers (e.g. 
SMEs). In an alternative approach, some countries mandate interest rate discounts for loans extended to priority sectors or borrowers.  
                                               
41 Staschen and Nelson (2013), Demirguc-Kunt et al. (2007), chapter 4, and Helms (2006), chapter 5. S/FIN/W/88 
 
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  Table 4. Priority sector lending regimes in Asia 
Country Preferential lending Priority sectors 
 Loan quotas  
India 40% Agriculture (18%), SMEs, export, 
microfinance 
Indonesia 20% SMEs 
Philippines 8% SMEs (6% small; 2% medium) 
Thailand 20% of deposits Agriculture (14%) and small-scale 
industries (6%) 
 Interest rate cap  
Malaysia 200 basis points abov e base lending rate SMEs 
Vietnam 200 basis points above deposit ceiling Agriculture, SMEs, export, technology 
Source: Federal Reserve Bank of San Francisco (2014) 
5.36.  Governments have also imposed the obligation on private sector banks to supply financial 
services to underserved populations through the so-called community reinvestment legislation. A 
case in point is the United States Community Reinvestment Act (CRA) of 1977, which is intended 
to encourage depository institutions to help m eet the credit needs of the communities in which 
they operate, including low- and moderate-income neighbourhoods.42 The CRA requires that each 
depository institution's record in helping meet  the credit needs of its entire community be 
evaluated by the appropriate Federal financial su pervisory agency periodically. In addition to 
lending, banks are evaluated on their grants an d investment activity, the provision of bank 
services and the presence of branches in low- and moderate- income communities. As a result of 
the examination, banks are assigned one of the fo llowing grades: Outstanding, Satisfactory, Needs 
to Improve, or Substantial Non-Compliance. In ca ses where a bank receives a score of Needs to 
Improve or Substantial Non-Compliance, federal regulators may deny the banks' applications to 
expand its operations or merge with another bank. 
5.37.  With a view to reducing the cost of credit, governments have also resorted at times to 
interest rate ceilings , sometimes called "usury laws". A surv ey conducted by CGAP in 2009 showed 
that 39 countries have interest rate caps – 97 do not – but no clear pattern across regions or 
income groups emerged.43 Measures are sometimes imposed to contain excessive lending, for fear 
of over indebtedness. The same survey referred to in the previous paragraph showed that 30 
countries have quantitative restrictions on consumer credit, the most prevalent approach being to 
limit the loan size so that monthly repayments do not exceed a specific percentage (usually 30 to 
50%) of the net monthly income. In East Asia quan titative restrictions came after credit card 
crises, focusing not on debt-to-income ratios for monthly payments but on the overall amount of 
credit.44 
5.38.  The obligation imposed on banks to offer basic or "no frills" bank accounts  is another 
example of financial inclusion mandate, aimed at enabling low-income people to save and have access to other financial services. Such accounts may feature no or low fees, no minimum balance 
requirement, and a small number of free automated teller machine (ATM) transactions or 
withdrawals. For example, Mzansi accounts in South Africa have no monthly fee and no minimum balance but allow only one free monthly cash deposit and a maximum account balance, beyond 
which customers must graduate to regular savings accounts. 
5.39.  Basic account requirements are not widespre ad, though. Only 20 of 139 countries survey by 
CGAP in 2009, half of them high income, reported a requirement for financial institutions to offer a 
basic bank account and/or payment service pack age. Such requirements exist in high-income 
countries such as Belgium, Canada, France, Germany, Sweden, the United Kingdom and the United States.
45 Argentina, Chile, Colombia, and Mexico in Latin America, as well as India, 
                                               
42 The CRA was substantially revised in May 1995 and updated again in August 2005. The United States 
is not the only country having this ty pe of policy. Other countries having si milar legislation or policies include 
Australia, Brazil, Canada, India, Ni geria, South Africa and the United  Kingdom. See Woodstock Institute 
(2004). 
43 CGAP/World Bank (2009). 
44 F o r  a n  a n a l y s i s  o f  d i r e c t  p o l i c y  i n t e r v e n t i o n s  b y  g o v e r n m e n t s  t o  p r o m o t e  f i n a n c i a l  i n c l u s i o n ,  s e e  
Helms (2006), chapter 5. 
45 In the United States, so-called "lifeline banking" requirements were introduced in several states, with 
low minimum account balances, low fees, and a specific number of free withdrawals.  S/FIN/W/88 
 
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  Malaysia, and Pakistan in Asia, have basic accounts requirements targeting a much larger 
unbanked segment. 
5.40.  Expanding the branch network of the ba nking system is an important dimension of 
increasing access to finance. Commercial banks tend to favour urban areas (or even specific areas 
within a city), where they may reach the most  customers and reduce the average costs of 
providing services. This comes at the cost of neglecting rural or disadvantaged areas, where 
transaction costs per service are excessively high.46 Some regulatory requirements for opening 
new branches are sometimes excessively cumbersome. For example, the need to ensure ex-ante 
that the ratio of the capital base to the number of branches is kept constant (which requires banks 
to inject more capital each time they open a br anch) or the physical inspection of a new branch 
before approval is given.  
5.41.  An example of simplification of branch au thorization requirements is provided by India.47 In 
December 2009, India allowed domestic scheduled commercial banks to open branches in the so-called Tier 3 to Tier 6 centres with a population  up less than 50,000 without prior permission from 
the RBI in each case, subject to reporting only. However, the opening of branches in Tier 1 and 
Tier 2 centres (population of 50,000 and above) re mained subject to prior permission of the RBI, 
except in the case of the North Eastern States and Sikkim, where domestic scheduled commercial 
banks were allowed to open branches in rural, semi-urban and urban centres without the need to 
take permission from RBI in each case, subject to reporting only. More recently, in the Monetary Policy Statement 2011-2012, banks were mandated to allocate at least 25% of the total number of 
branches proposed to be opened during a year in unbanked rural centres (Tier 5 and Tier 6). At 
the same time, in view of the requirement for op ening at least 25% of the branches in unbanked 
rural centres, the RBI abolished the mandatory requ irement to open at least one third of the total 
number of branches proposed to be opened in Tier  3 to Tier 6 centres in underbanked districts of 
underbanked States. Additional incentives were provided in the form of authorizations to open 
additional branches in urban areas. Thus, for each  branch proposed to be opened in Tier 3 to 
Tier 6 centres of underbanked districts of underba nked States, banks were authorized to open a 
branch in a Tier 1 centre.  
5.42.  Other types of incentive, such as public deposits and other benefits, are sometimes 
provided to banks that open a branch in an under served area to better ensure that the new branch 
will have sufficient deposits to provide loans and other services. A case in point is the Banking 
Development District (BDD) program established by the New York State Banking Department in 
1997, which provides for the deposit of up to US$ 10  million of public funds in each branch opened 
in a BDD area. These public deposits lower the financial risks that the branch will incur by opening 
in an underserved community, usually comprised of low ‐ and moderate ‐income households. 
Currently, a BDD branch receives the deposit of public funds in the form of a certificate of deposit 
from the State Comptroller, which the branch may maintain at an interest rate that is 100 basis points below the five ‐day average on New York jumbo CDs. BDD branches may also request that 
the State Comptroller deposit non ‐subsidized, market rate deposits in the amount of US$25 million 
in the branch. The market rate funds remain in the branch for a total of five ‐years, with the 
possibility of one ‐year extensions, while the subsidized deposits remain in the branch for an initial 
two‐year period. After the initial two ‐year period has passed, the subsidized deposits must either 
be returned to the State Comptroller, or renewed by the branch.
48 
5.43.  Sometimes, the policies promoting the opening of branches in underserved areas may come 
at the expense of branch expansion in cities. Fo r example, in 2011 Bangladesh abolished the 5:1 
ratio of urban-rural bank branches, which had allowed banks to have an urban branch network up to five times bigger than the rural one. The new directive imposed a ratio of 1:1, meaning that no 
bank would be allowed to open new branches in cities if they did not open an equal number of 
rural branches.  
                                               
46 Increasing the size of the branch network (includi ng ATMs) is therefore important, but it is not the 
only answer. Access may also be promoted through other means, such as the postal network, branchless 
banking and mobile banking.  
47 See http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6613&Mode=0 . 
48 New York State Banking Department (2010). S/FIN/W/88 
 
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  5.1.6  Public sector banks 
5.44.  In many countries, state-owned banks still play a major role in the banking system, and in 
providing financial services to the poor. They ar e present in about 73 of 102 countries, where they 
hold roughly 15 percent of total banking assets (F igure 1). Public banks often are the only ones 
present in rural areas with large branch networks, not least because governments have used 
public banks extensively to promote savings and credit in areas of less commercial interest, such as agriculture or housing, and to implement social programs. State-owned retail financial 
institutions usually combine financial and policy objectives. They tend to perform relatively better 
on outreach than profitability.  
5.45.  There are many types of state-owned bank s: 1) retail commercial banks, which collect 
deposits from the public and grant credit to fi rms and individuals, generally have social or 
development objectives but carry out the same type of operations of private commercial banks; 2) 
development banks, which do not take deposits fr om the public, but are funded by multilateral 
agencies, bond issuances, and/or government tr ansfers, provide loans through other banks or 
directly to firms that operate in specific sector s; 3) quasi-narrow banks, which collect deposits 
from the public and invest in short-term government paper without providing loans to the general public; 4) development agencies, which do not lend nor borrow, but operate with a wide range of 
instruments to provide guarantees, grants, subsidies, and technical assistance.
49 
   
 
  
 
  
 
   
 
  
 
  
                                               
49 Gonzalez-García and Grigoli (2013).  S/FIN/W/88 
 
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  Figure 1. State-owned bank's share of ba nking systems assets (average 2008-2010) 
Italy 
South Africa  
Nicaragua 
Slovak Republic 
Mauritius 
Bosnia and Herzegovina 
Cyprus 
Honduras 
Guatemala  
Bulgaria 
France 
Lesotho 
Uganda 
New Zeland 
Hungary 
Croatia 
Tanzania 
Luxembourg 
Kenya 
El Salvador 
Colombia 
Zimbabwe 
Denmark 
Paraguay 
Botswana 
Romania 
Togo 
Senegal 
Niger 
Mali 
Guinea-Bissau 
Côte d'Ivoire 
Burkina Faso 
Benin 
Malawi 
Netherlands 
Austria 
Ireland 
Ghana 
Greece 
Panama 
Moldova 
Vanuatu 
Philippines 
Tajikistan 
Tonga 
Mexico 
Latvia 
Ecuador 
Switzerland 
Ukraine 
Swaziland 
Kazakhstan 
Serbia 
Chile 
Chinese Taipei 
Angola 
Poland 
United Kingdom 
Thailand 
Pakistan 
Trinidad and Tobago 
Portugal 
Korea, Rep. of 
Venezuela, Bolivarian Rep. of 
Morocco 
Nepal 
Yemen 
Seychelles 
Turkey 
Dominican Republic 
Germany 
Suriname 
Iceland 
Bangladesh 
Indonesia 
Sierra Leone 
Tunisia 
Kyrgyz Republic 
Russian Federation  
Argentina 
Maldives 
United Arab Emirates 
Uruguay 
Burundi 
Egypt 
Bhutan 
Slovenia 
Costa Rica 
Sri Lanka 
Ethiopia 
India 
Belarus 
Syria 
Irak 
    
Source: Gonzalez-García and Grigoli (2013) 
5.1.7  Financial infrastructure development 
5.46.  Financial infrastructure underpins safe and efficient transactions and lowers the costs and 
risks to financial service providers. Critical components of financial infrastructure include the payments system and the credit reporting mechanisms.  
5.47.  Payments systems provide the technical infrastructure, legal framework, and financial 
settlement mechanisms for financial transactions between market participants, including individuals, banks, companies, brokers, retailers , and others. They ensure that parties can settle 
transactions quickly, cheaply, securely, and wi th acceptable risk. Real-time gross settlement 
systems facilitate the safe and efficient settlem ent of large-value payments, and payments among S/FIN/W/88 
 
- 21 - 
 
  financial institutions in general, while retail payments infrastructure facilitates the processing of 
retail payment instruments.50  
5.48.  Credit reporting addresses a fundamental problem of credit markets – asymmetric 
information between borrowers and lenders, which may lead to adverse selection, credit rationing, 
and moral hazard problems.51 National credit bureaus, which gather and distribute reliable credit 
information, are an established way of enhancing the ability of borrowers to signal a good credit record. Such credit bureaus may take the form of a public credit registry, usually owned by the 
central bank, or of a privately owned bureau. Credit bureaus collect data from a variety of sources 
on corporate entities or individuals, consolidate it into credit profiles, and makes the information 
available on request to subscribers, including financial and non-financial institutions, as well as financial supervisors.
52 Reports from credit bureaus contain information about the payment 
behaviour of borrowers, including data on timely  fulfilment of or delinquency in financial 
obligations. 
5.49.  Such registries or bureaus have emerged in the private sector in numerous countries, but 
the public sector has also taken a leading or complementary role in many others.53 Even where the 
operation and ownership of credit bureaus is left to the private sector, government action (for example through mandatory information sharing legislation) strongly influences the ability of such 
bureaus to function.
54  
5.50.  Many developing economies still have no credit reporting system in place, or the coverage 
of current services is extremely limited (Table 5) . This situation may be explained by a number of 
factors, such as lack of specific legislation on credit reporting, lack of or unreliable data (e.g. lack 
of identity identifiers, unavailability of key credit  information), IT-related constraints, and lack of 
qualified human resources.  
5.51.  For example, given that privacy laws may severely constrain information sharing, the design 
of credit registries is highly relevant. Sharing of credit information strengthens the competitive 
environment in the credit market. Incumbent banks, however, might not be interested in sharing the information they hold for fear of losing competitive position vis-à-vis other competitors in the 
market. That is why governments have opted in some cases to make information sharing 
mandatory, either through legislation or by regulation of licensed intermediaries. At a more basic level, measures such as giving every individual a national identification number, as has been done 
in India, can significantly improve the ease an d effectiveness of the operation of the credit 
information industry with regard to individual or microfinance borrowers. 
                                               
50 On the use of retail payment systems as a driver fo r financial inclusion, see The Banking with the Poor 
Network Ltd. & The Foundation for Development Cooperation Ltd (2013). 
51 Demirguc-Kunt et al. (2007). 
52 Baer et al. (2009). 
53 Demirguc-Kunt et al. (2007).  
54 Annex 2 in Internationa l Finance Corporation (2006) contains information on existing credit 
information sharing laws in developing and developed economies. S/FIN/W/88 
 
- 22 - 
 
  Table 5. Credit bureau and credit registry coverage (% of adults) 
Region Credit registry coverage 
(% of adults) Credit bureau coverage (% of 
adults) 
East Asia & Pacific 11 20.4 
Europe & Central Asia 19.3 33.7 
Latin America & Caribbean 12.6 39.3 
Middle East & North Africa 8.7 11.6 
OECD high income 12.1 67 
South Asia 3.2 11.3 
Sub-Saharan Africa 4.5 5.8 
Source: World Bank Doing Business Data ( http://www.doingbusiness.org/dat a/exploretopics/getting-credit ) 
Note: Credit bureau coverage  Credit bureau coverage reports the numb er of individuals and firms listed in a 
credit bureau's database as of 1 January 2014, with information on their borrowing history from the past 5 years. The number is expressed as a percentage of the adult population (the population age 15 and above 
in 2013 according to the World Bank’s World Development In dicators). A credit bureau is defined as a private 
firm or non-profit organization that maintains a databa se on the creditworthiness of borrowers (individuals or 
firms) in the financial system and facilitates the exchange of credit information among creditors. Credit registry 
coverage  reports the number of individuals and firms li s t e d  i n  a  c r e d i t  r e g i s t r y ’ s  d a t a b a s e  a s  o f  
1 January 2014, with information on their borrowing histor y from the past 5 years. The number is expressed as 
a percentage of the adult population (the population age 15 and above in 2013 according to the World Bank’s World Development Indicators). A credit registry is defined as a database managed by the public sector, 
usually by the central bank or the superintendent of ba nks, that primarily assists banking supervision while at 
the same time facilitating the exchange of credit information among banks and other regulated financial 
institutions. If no registry op erates, the coverage value is 0%
 
6  THE ROLE OF THE GATS 
6.1.  As seen in the previous sections, governments have been increasingly concerned with 
financial exclusion and have sought to remedy that situation through a variety of policy 
interventions. These policies aim, for the most part, to increase access to financial services by poor people, by specific sectors of the economy, by micro and small-sized businesses, or by 
geographical areas that appear to be of little interest to commercial financial services suppliers due 
to market failures (e.g. information asymmetry) , perceived high risk and low profitability.  
6.2.  When analysing the role of trade policy – an d more specifically the role that the GATS may 
play – in fostering financial inclusion, it is worth bearing in mind that the GATS touches upon some 
but not all policy interventions affecting the financial sector.
55 A four-fold distinction can be made 
between different types of government intervention  that could have an impact on the financial 
services sector. First, there are monetary and exch ange rate policies, which fall outside the scope 
of the GATS.56 Second, governments are allowed under the GATS to maintain measures for 
prudential reasons subject to the terms of para graph 2(a) of the Annex on Financial Services.57 
Third, governments may impose market access and/or national treatment limitations that restrict, prevent or inhibit the foreign supply of services through any of the four modes of supply. It is the 
reduction and elimination of these measures that constitute the primary focus of the trade 
liberalization efforts of the GATS. Under the GATS, Members make market access and national treatment commitments as per Articles XVI and XV II of the Agreement, which may be subject to 
limitations. Finally, governments may maintain other measures, which are neither market access 
nor national treatment limitations, and which fall under the ambit of GATS Article VI (Domestic Regulation).  
                                               
55 World Trade Organization (1997). 
56 "Activities conducted by a central bank or monetary authority or by any other public entity in pursuit 
of monetary or exchange rate policies" are considered  "services supplied in the exercise of governmental 
authority", as per Paragraph 1(b) of  the Annex on Financial Services. 
57 Paragraph 2(a) of the Annex on Financial Services  states the following: "N otwithstanding any other 
provisions of the Agreement, a Member shall not be pr evented from taking measures for prudential reasons, 
including for the protection of investor s, depositors, policy holders or person s to whom a fiduciary duty is owed 
by a financial service supplier, or to ensure the inte grity and stability of the financial system. Where such 
measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the Member's commitments or ob ligations under the Agreement." S/FIN/W/88 
 
- 23 - 
 
  6.3.  Policymakers and regulators can opt to remove barriers to the entry and expansion of 
competent financial service suppliers that wish to provide financial services to disadvantaged consumers, firms and regions. In that sense, some  countries have done away with restrictive bank 
branching policies and have allowed banks (both foreign and domestic) to freely decide where to 
establish branches. Specific commitments along th ose lines would provide national policies with 
more legal certainty and predictability, helping create a policy environment more conducive for the engagement of financial institutions. Those commitments would not prevent Members from 
imposing prudential and other regulations aimed at preserving the stability and integrity of the 
financial system and protecting consumers of financial services.
58 The GATS would not prevent 
regulators, for example, from establishing licensing requirements for bank- and non-bank financial institutions (especially if they are allowed to accept deposits), from requesting registration for tax 
and legal purposes, or from imposing "fit and proper" tests for management and governing bodies 
of financial institutions.  
6.4.   Some policy makers have opted to adopt a more interventionist policy, limiting the entry and 
expansion (e.g. through sub-branching) of foreign financial service suppliers. In the context of the 
GATS, those policies would be allowed for the sectors and services for which no market access commitment has been undertaken. In cases where specific commitments have been made, 
restrictive or discretionary market access regulation would depend on the limitations that may 
have been introduced, in particular with respect to the supply of financial services through mode 3 
(commercial presence). For example, some Members have made establishment or the expansion of financial institutions subject to an economic needs test (ENTs).
59 In most cases, the criteria for 
the enforcement of such ENTs are very vague. In those schedules, market access is usually made 
dependent on "economic needs", the "public intere st" or the "ability to facilitate trade and 
contribute to financial and economic development."  
6.5.  Financial inclusion objectives may lead to the introduction of incentives and subsidies 
(including loan guarantees) with a view to supporting innovation in the supply of financial services adapted to financially excluded segments of the market, facilitating access to remote rural areas, 
reducing the high fixed costs of servicing small accounts used by poor and low-income people, 
reducing the perceived risk of lending to smal l and microenterprises and households, promoting 
financial literacy, and helping build the managerial and operational capacity needed to deal with the financially excluded. In most cases, these policies would likely distinguish between different 
types of financial service suppliers, but would not necessarily discriminate on the basis of the 
origin of the supplier. In the context of the GATS, the legal possibility to discriminate against foreign financial service suppliers – if that is the policymaker's choice – would depend on whether 
a specific commitment has been undertaken for the service concerned, and, if so, on whether 
limitations to that effect have been scheduled. T hus, subsidies, incentives or other types of state 
support may be granted in cases where sectors or  services have been excluded from Members' 
schedules of specific commitments, or where a pa rticular mode of supply has not been bound with 
respect to national treatment. On the other hand, in sectors or services for which a specific commitment on national treatment has been undertake n, the granting of discriminatory subsidies, 
incentives or other types of state support would only be permissible if the Member concerned has 
scheduled a limitation to that effect.
60  
6.6.  Governments often seek to encourage and shape the supply of retail financial services 
through additional policies, including interest rate ceilings on loans, mandatory portfolio quotas 
and directed lending programmes for banks (e.g. a requirement that a percentage of the loan 
portfolio be extended in rural areas or to poor people). It could be argued that these policies could be normally implemented through measures which are consistent with Article XVI and XVII 
commitments. If they are non-discriminatory and do not impose any of the six market access 
limitations of Article XVI:2, then such measures would fall within the ambit of Domestic Regulation. Few Members' schedules contain entries related to these types of policy intervention. For example, one Member has indicated that in  the case of the supply of banking and other 
financial services through mode 3, "[f]oreign banks are subject to non-discriminatory resource 
allocation requirements", while another Member's schedule contains the following market access 
                                               
58 Annex on Financial Services, paragraph 2(a). 
59 See "Economic Needs Tests", Note by the Secretariat, document S/CSS/W/118. 
60 Many Members for example have in troduced limitations – generally in the horizontal section of the 
schedule – limiting the eligibility for subsidies to domestic service suppliers. See "Limitations in Members' Schedules relating to Subsidies", Note by the Secr etariat, documents S/WPGR /W/13, Add.1 and Add.2. S/FIN/W/88 
 
- 24 - 
 
  limitation for lending services supplied throug h mode 3: "Mandatory lending to small- and 
medium-sized companies are required" (sic). 
6.7.  As seen in previous sections, one of the most important barriers to financial inclusion is the 
geographic distance to a bank. Policy makers in developing countries have adopted various 
strategies to break up this "distance barrier" and increase the use of financial services by rural 
populations or those living in areas with limite d coverage. Mandating banks to open in unbanked 
rural locations, banking through local agents and "mobile" branches are some of those strategies. 
While government mandates may improve bank density in remote regions, the establishment of 
physical bank branches may not be a sustainable solution in some cases as they may be unprofitable in the long term. As a result, the agent or correspondent banking model, including the use of post offices, has come to the fore in many developing countries, particularly in South Asia 
and Latin America. Except for the commitments that may have been made with regard to National 
Treatment, the GATS will not prevent a government from pursuing the "agent or correspondent banking model" to deliver financial services. This model requires in any case the development of a 
regulatory framework allowing for the mobilization of existing retail infrastructure (e.g. 
pharmacies, post offices, shops or supermarkets) as delivery channels for financial services.  
6.8.  Technology has come to play a critical role in the promotion of financial inclusion, as shown 
by the global spread of mobile money and payments and other "branchless" banking schemes. 
Technology allows for more fluid cooperation and contact between banks and their clients and among banks and their agents. Experience shows th at agent or correspondent banking – one form 
of branchless banking – actually thrives where there is a sound technical network which facilitates 
real-time communication between the agents and th e banks and allows identity verification of 
customers via electronic card-readers. This requires  of course an appropriate regulatory framework 
tailored to local conditions. Here again, the GATS will not prevent a government from promoting 
mobile banking and other branchless banking schemes. Normally, this would not require a 
government to take measures inconsistent with its GATS obligations and commitments. 
6.9.  Governments may opt to engage directly in the provision of financial services to the poor, 
either through state-owned banks or fully- or limited-licensed postal banks. Some of these 
institutions are usually mandated to serve the lo wer segments of the market, particularly through 
specific savings products and in rural areas. Under the GATS, Governments are free to establish 
and maintain state-owned financial institutions. However, whether measures benefiting those 
institutions are affected by specific commitments in the service or sector concerned (including 
postal services) depends on a judgement as to whether they constitute limitations on market 
access (e.g. the granting of a 'de facto' or 'de jure ' exclusive right to supply a specific financial 
service) or limitations on national treatment.  
6.10.  Efforts to increase financial inclusion also include the channelling of government payments 
(e.g. social benefits, wages and pensions) through the banking system. Here again, the use of the 
banking system in this fashion will not be affected by specific commitments made under the GATS, 
provided those policies do not constitute limitations on market access (unlikely, unless an exclusive right is granted only to a particular suppl ier) or on national treatment (which may arise if 
the policies are found to modify conditions of competition to the detriment of foreign financial 
service suppliers).  
6.11.  Lack of access to borrowers' information is another major barrier to financial inclusion. 
Governments have tried to remedy this situation either by passing laws and regulations that 
enable banks to share borrowers' information or by promoting the establishment of credit 
registries or credit information bureaus. Sometimes, governments may wish to accelerate the dissemination of such information through the establishment of public registries.
61 The 
establishment of such state-run registries would not be inconsistent with the GATS per se, unless, 
for such services, a monopoly or exclusive service supplier was established which was contrary to the government's market access commitments, or some advantages were granted that were considered contrary to its national treatment commitments.  
                                               
61 Arguably, the services supplied by  these institutions would be classified as part of "Advisory, 
intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through 
(xv), including credit reference and analysis, invest ment and portfolio research  and advice, advice on 
acquisitions and on corporate restru cturing and strategy", in paragraph 5(a)(xvi) of the Annex on Financial 
Services. S/FIN/W/88 
 
- 25 - 
 
  6.12.  Consumer protection plays a particular role in financial inclusion. In order to promote it, 
policymakers may opt to increase the information available to consumers (e.g. through truth-in-lending legislation or transparency and disclosure requirements imposed on financial institutions), invest and participate in financial literacy initiatives, require financial institutions to design their 
own pro-consumer codes of conduct and practice s, and even establish independent consumer 
protection agencies. Such initiatives are not prevented by GATS obligations and specific 
commitments, although requirements imposed on financial institutions will need to respect the 
national treatment principle if commitments to that effect have been made. 
6.13.  A single institutional model may not be enough to respond to different market segments in 
different locations. Governments may therefore opt to set up different legal forms to increase financial inclusion. One strategy is the so-called "tiered" licensing and regulation, whereby legal 
forms range from small microcredit organizations for which registration and reporting are the only 
requirements for permission to lend, to fully regulated banks offering microfinance services (among others). Regulatory requirements are then set for each tier in light of the risks engendered 
by the range of products offered. Tiered licensing and regulation defines financial institutions by 
the nature of products and services offered and th eir target customer base, and usually apply on a 
non-discriminatory basis. If that is the case , the GATS would not prevent such regulatory 
approaches.  
7  CONCLUSION 7.1.  Financial inclusion has become a subject of  growing interest for researchers, policymakers, 
and other financial sector stakeholders. Financial exclusion, by forcing poor individuals and small 
firms to rely exclusively on their own resources to  meet their financial needs, aggravates income 
inequality and reduces economic opportunity. Recent research, albeit limited due to lack of data in 
many instances, suggests that financial inclusion matters for economic development and poverty 
reduction. Several initiatives to promote financial inclusion have come to light at the international 
level. At the country level, national financial inclusion strategies have become common in recent years, both in developed and developing economies.  
7.2.  However, for all its importance, financial inclusion has not been yet explored from a GATS 
perspective. This document is a first attempt to do that. It has provided an introduction to the issue and an overview of the most important trad e and trade policy aspects involved. The subject 
is very broad and cannot be exhausted within the limits of a single document. Its many aspects – 
those that have been highlighted in the document as well as those that may have been overlooked 
– can of course be further explored in subseque nt Secretariat Notes, should Members so decide. 
 
_______________ 
  
 S/FIN/W/88 
 
- 26 - 
 
   
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  S/FIN/W/88
 
- 29 - ANNEXES 
Table A1. Financial inclusion around th e world (2011) – Selected indicators. 
  Individual users Firm users Suppliers 
Country Account 
at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
card 
(% age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay 
bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
15+) Small 
firms 
with a 
bank 
loan or 
line of 
credit 
(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks 
to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
Afghanistan 9.0 119.3 4.7 0.2 7.4 0.0 3.0 2.3 1.4 2.5 73.1 0.5 1.9 
Albania 28.3 .. 21.1 3.2 7.5 22.7 24.2 37.9 12.4 33.3 92.4 32.5 22.2 
Algeria 33.3 372.9 13.5 1.8 1.5 9.7 21.1 16.4 8.9 28.6 83.8 6.6 5.3 
Angola 39.2 .. 29.8 17.0 7.9 13.6 11.7 4.2 13.1 13.4 86.4 16.0 10.5 
Antigua and Barbuda .. .. .. .. .. .. .. 51.8 49.4 46.3 100.0 55.8 23.4 
Argentina 33.1 733.0 29.8 5.7 6.6 1.1 0.1 38.0 30.3 33.3 96.2 48.5 13.5 
Armenia 17.5 711.4 5.2 2.2 18.9 0.8 3.0 34.7 31.9 46.3 89.5 40.9 18.8 
Aruba .. .. .. .. .. .. .. .. .. .. .. 103.1 19.5 
Australia 99.1 .. 79.1 79.2 17.0 .. .. .. .. .. .. 166.9 29.6 
Austria 97.1 .. 86.8 55.3 8.3 .. .. .. .. .. .. 114.1 15.2 
Azerbaijan 14.9 398.2 10.0 0.7 17.7 0.1 0.0 18.1 19.0 0.4 75.9 29.8 9.9 
Bahamas, The .. .. .. .. .. .. .. 28.4 14.6 28.5 97.6 81.7 38.0 
Bahrain, Kingdom of 64.5 .. 62.2 6.0 21.9 15.1 4.1 .. .. .. .. .. .. 
Bangladesh 39.6 377.9 2.3 0.5 23.3 1.7 1.0 .. 24.7 43.1 95.3 3.6 7.8 
Barbados .. .. .. .. .. .. .. 58.1 45.5 38.7 97.4 32.7 19.9 
Belarus 58.6 .. 50.3 10.4 16.1 4.0 1.5 33.2 35.8 21.5 92.3 41.1 2.1 
Belgium 96.3 .. 85.8 71.1 10.5 .. .. .. .. .. .. 91.7 44.0 
Belize .. 657.7 .. .. .. .. .. 43.7 36.7 57.0 100.0 37.0 23.2 
Benin 10.5 .. 0.7 0.6 4.2 0.2 0.2 42.1 3.8 39.4 97.4 .. .. 
Bhutan .. .. .. .. .. .. .. 54.8 64.2 59.5 92.6 14.1 16.4  
  S/FIN/W/88
 
- 30 -   Individual users Firm users Suppliers 
Country Account 
at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
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(% age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay 
bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
15+) Small 
firms 
with a 
bank 
loan or 
line of 
credit 
(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks 
to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
Bolivia, Plurinational 
State of 28.0 532.3 12.8 0.7 16.6 1.6 4.0 33.3 27.8 40.5 95.6 25.7 9.7 
Bosnia and Herzegovina 56.2 .. 34.4 6.2 13.0 0.8 1.4 54.5 59.7 45.4 99.8 37.6 31.3 
Botswana 30.3 487.2 15.6 6.8 5.6 2.2 5.1 40.8 32.8 32.1 99.0 27.1 8.6 
Brazil 55.9 635.4 41.2 16.6 6.3 1.3 0.0 42.8 48.4 60.0 99.4 119.6 46.2 
Brunei Darussalam .. 1,458.2 .. .. .. .. .. .. .. .. .. 80.5 23.1 
Bulgaria 52.8 .. 45.8 4.6 7.8 0.8 0.2 33.8 34.7 46.6 96.8 82.4 58.6 
Burkina Faso 13.4 .. 2.0 0.6 3.1 0.3 0.2 21.4 25.6 33.1 96.8 .. .. 
Burundi 7.2 31.3 0.8 0.1 1.7 0.8 4.0 28.9 12.3 25.5 90.5 0.7 2.4 
Cambodia 3.7 .. 2.9 0.5 19.5 0.1 0.4 20.0 11.3 12.6 .. 6.1 4.3 
Cameroon 14.8 71.1 2.1 0.4 4.5 0.6 3.3 19.7 31.4 41.6 92.5 1.4 1.7 
Canada 95.8 .. 88.0 69.2 20.3 .. .. .. .. .. .. 209.0 24.3 
Cabo Verde .. 1,568.5 .. .. .. .. .. 38.6 35.3 49.8 96.5 44.6 30.7 
Central African Republic 3.3 46.7 1.0 0.1 0.9 0.2 0.3 27.7 25.3 25.3 98.5 0.9 0.9 
Chad 9.0 21.3 5.3 1.6 6.2 2.8 5.7 25.4 4.2 16.1 95.9 0.5 0.7 
Chile 42.2 2,133.2 25.8 11.1 7.8 1.0 0.5 72.5 44.8 55.1 97.9 65.4 17.5 
China 63.8 .. 41.0 6.9 7.3 1.3 0.6 .. .. .. .. .. .. 
Colombia 30.4 1,115.5 22.7 6.8 11.9 1.8 1.2 50.6 35.0 49.2 95.8 33.0 15.0 
Comoros 21.7 74.2 5.7 0.4 7.2 0.3 0.5 .. .. .. .. 3.1 1.4 
Congo, Dem. Rep. of 3.7 .. 1.7 0.3 1.5 0.1 1.5 9.1 6.7 8.8 71.3 .. .. 
Congo 9.0 69.3 3.6 2.1 2.8 1.6 20.1 7.6 7.7 9.7 86.7 2.6 2.7 
Costa Rica 50.4 1,118.2 43.8 14.5 10.0 0.0 0.0 41.2 22.2 30.1 97.5 52.2 23.1 
Côte d'Ivoire .. .. .. .. .. .. .. 10.1 13.9 8.3 67.4 .. .. 
Croatia 88.4 1,419.0 74.8 17.3 14.4 4.4 0.8 60.2 60.0 63.2 99.8 105.8 34.8  
  S/FIN/W/88
 
- 31 -   Individual users Firm users Suppliers 
Country Account 
at a 
formal 
financial 
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(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
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(% age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay 
bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
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firms 
with a 
bank 
loan or 
line of 
credit 
(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks 
to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
Cyprus 85.2 .. 46.4 30.2 27.0 .. .. .. .. .. .. 77.0 103.9 
Czech Republic 80.7 .. 61.0 44.7 9.5 9.1 6.5 39.7 33.4 28.2 98.1 43.5 23.1 
Denmark 99.7 .. 90.1 85.6 18.8 .. .. .. .. .. .. 61.5 39.0 
Djibouti 12.3 91.1 7.6 1.5 4.5 2.8 3.5 .. .. .. .. 1.8 .. 
Dominica .. .. .. .. .. .. .. 15.3 46.2 37.9 100.0 38.4 17.7 
Dominican Republic 38.2 583.8 21.3 4.4 13.9 2.5 1.9 49.8 39.1 72.4 98.4 30.1 10.7 
Ecuador 36.7 .. 17.1 4.2 10.6 1.2 0.1 43.5 17.0 42.3 96.0 .. .. 
Egypt 9.7 .. 5.1 0.4 3.7 0.4 0.1 5.1 5.6 7.5 74.3 8.7 4.6 
El Salvador 13.8 .. 10.9 3.0 3.9 0.0 0.3 45.8 31.7 44.5 94.7 31.3 19.1 
Equatorial Guinea .. 257.4 .. .. .. .. .. .. .. .. .. 4.5 4.9 
Eritrea .. .. .. .. .. .. .. 6.6 11.9 5.7 98.2 .. .. 
Estonia 96.8 2,040.3 92.3 74.1 7.7 5.6 2.1 43.7 41.5 21.6 97.4 87.0 18.6 
Ethiopia .. 114.8 .. .. .. .. .. 3.1 16.6 13.6 94.7 0.3 2.0 
Euro area 95.3 1,498.7 71.2 55.3 11.4 3.6 2.1 43.7 41.5 34.9 97.4 90.5 40.1 
Fiji .. .. .. .. .. .. .. 25.7 37.1 50.7 96.1 36.7 11.0 
Finland 99.7 .. 89.3 88.2 23.9 .. .. .. .. .. .. 36.2 15.0 
France 97.0 .. 69.2 65.1 18.6 .. .. .. .. .. .. 109.8 41.6 
Gabon 18.9 131.1 8.6 3.3 2.3 4.9 41.1 4.1 6.3 8.5 83.6 11.1 5.8 
The Gambia .. .. .. .. .. .. .. 8.1 7.6 14.3 72.8 .. 8.9 
Georgia 33.0 650.8 20.2 2.0 11.0 0.7 0.7 29.1 38.2 27.8 90.8 42.2 19.6 
Germany 98.1 .. 88.0 64.2 12.5 .. .. .. 45.0 42.2 .. 122.3 15.7 
Ghana 29.4 351.6 11.4 2.9 5.8 0.9 1.0 13.0 16.0 21.4 83.5 4.1 5.5 
Greece 77.9 .. 34.0 7.7 7.9 1.3 0.3 .. 25.9 26.3 .. 73.0 38.7  
  S/FIN/W/88
 
- 32 -   Individual users Firm users Suppliers 
Country Account 
at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
card 
(% age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay 
bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
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firms 
with a 
bank 
loan or 
line of 
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(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks 
to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
Grenada .. .. .. .. .. .. .. 47.8 37.3 50.3 98.7 50.4 34.5 
Guatemala 22.3 .. 13.0 2.6 13.7 0.0 2.5 33.5 26.6 26.2 61.0 .. 37.1 
Guinea 3.7 .. 2.3 0.5 2.4 1.1 3.5 2.5 0.9 2.6 53.9 .. 1.5 
Guinea-Bissau .. .. .. .. .. .. .. 2.1 0.7 1.1 59.0 .. .. 
Guyana .. .. .. .. .. .. .. 38.9 34.5 59.4 100.0 15.0 7.6 
Haiti 22.0 338.0 2.7 2.9 8.3 1.0 6.1 .. .. .. .. .. 2.7 
Honduras 20.5 .. 11.1 1.4 7.1 1.1 1.0 24.3 17.0 25.6 81.3 23.8 21.6 
Hong Kong, China 88.7 .. 75.8 51.2 7.9 .. .. .. .. .. .. 49.6 23.8 
Hungary 72.7 .. 62.4 28.7 9.4 2.2 1.4 39.6 48.7 41.8 97.7 57.5 15.7 
Iceland .. .. .. .. .. .. .. .. .. .. .. 73.9 52.4 
India 35.2 726.0 8.4 2.0 7.7 2.2 0.6 .. 46.6 36.4 .. 8.9 10.6 
Indonesia 19.6 .. 10.5 3.1 8.5 0.2 0.6 16.5 11.7 13.8 51.5 16.5 8.5 
Iran, Islamic Rep. 73.7 .. 58.3 32.9 30.7 .. .. .. .. .. .. 36.2 29.5 
Iraq 10.6 .. 3.3 1.0 8.0 1.8 2.4 2.8 2.7 4.6 43.2 1.2 5.1 
Ireland 93.9 .. 70.5 61.5 15.7 .. .. .. 37.4 46.1 .. 90.5 27.7 
Israel 90.5 1,141.8 7.5 54.4 16.7 12.6 1.9 .. .. .. .. 113.0 20.4 
Italy 71.0 860.3 35.2 27.8 4.6 .. .. .. .. .. .. 99.8 66.3 
Jamaica 71.0 .. 41.1 7.2 7.9 3.0 1.2 25.9 44.2 53.1 99.8 27.0 6.2 
Japan 96.4 .. 13.0 44.8 6.1 .. .. .. .. .. .. 129.0 34.0 
Jordan 25.5 .. 14.7 3.4 4.5 0.0 0.0 15.8 8.6 18.3 94.2 31.7 21.1 
Kazakhstan 42.1 1,038.9 31.3 4.5 13.1 4.3 2.5 18.8 31.0 34.3 92.1 65.8 3.4 
Kenya 42.3 651.5 29.9 5.4 9.7 13.4 60.5 17.6 22.9 26.0 89.1 9.5 5.2 
Kiribati .. .. .. .. .. .. .. .. .. .. .. 5.9 4.0  
  S/FIN/W/88
 
- 33 -   Individual users Firm users Suppliers 
Country Account 
at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
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(% age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay 
bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
15+) Small 
firms 
with a 
bank 
loan or 
line of 
credit 
(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks 
to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
Korea, Rep. of 93.0 .. 57.9 64.8 16.6 .. .. .. 39.9 41.2 .. 270.1 18.8 
Kosovo 44.3 .. 29.0 5.9 6.1 8.5 9.2 12.0 25.3 .. 96.6 .. .. 
Kuwait, the State of 86.8 1,493.8 83.9 21.9 20.8 9.5 2.2 .. .. .. .. 61.7 19.4 
Kyrgyz Republic 3.8 155.2 1.7 0.6 11.3 1.1 0.3 13.7 17.9 23.6 68.9 12.1 7.3 
Lao PDR 26.8 43.1 6.5 0.3 18.1 0.0 0.0 15.9 0.0 10.7 91.8 8.5 2.5 
Latvia 89.7 1,168.2 77.8 52.7 6.8 2.5 0.9 40.2 37.3 42.5 99.5 62.6 30.0 
Lebanon 37.0 949.0 21.4 2.0 11.3 0.3 0.0 66.5 23.8 51.3 86.7 41.7 31.5 
Lesotho 18.5 341.9 14.5 2.7 3.0 4.6 5.7 21.5 32.7 31.9 89.7 7.6 3.2 
Liberia 18.8 .. 3.3 3.6 6.5 5.2 7.3 13.6 10.1 12.8 67.8 1.5 3.8 
Libya .. .. .. .. .. .. .. .. .. .. .. .. 10.8 
Lithuania 73.8 .. 61.3 31.5 5.6 1.8 0.2 43.9 47.4 31.9 98.3 46.6 27.7 
Luxembourg 94.6 .. 73.2 67.7 17.4 .. .. .. .. .. .. 115.5 88.6 
Macao, China .. .. .. .. .. .. .. .. .. .. .. 155.9 37.2 
Macedonia, FYR 73.7 .. 36.3 14.1 10.6 12.9 4.8 58.2 47.0 17.3 96.8 51.6 24.3 
Madagascar 5.5 44.3 0.9 0.1 2.3 0.0 0.8 15.1 12.2 20.2 94.1 1.5 1.4 
Malawi 16.5 191.5 9.4 0.8 9.2 0.8 0.5 27.7 20.6 31.0 96.9 .. 1.1 
Malaysia 66.2 .. 23.1 12.6 11.2 2.4 0.5 57.2 48.6 49.3 97.7 56.4 10.5 
Maldives .. 1,333.7 .. .. .. .. .. .. .. .. .. 20.3 17.2 
Mali 8.2 .. 1.8 0.1 3.7 0.3 0.3 12.2 29.3 21.4 85.6 .. .. 
Malta 95.3 957.1 71.2 34.5 10.0 .. .. .. .. .. .. 55.4 41.6 
Marshall Islands .. .. .. .. .. .. .. .. .. .. .. 3.6 12.8 
Mauritania 17.5 .. 6.3 2.6 7.9 7.5 7.1 12.1 3.2 13.5 76.3 .. 4.2 
Mauritius 80.1 .. 50.9 7.4 14.3 1.8 6.8 41.0 37.5 39.5 97.2 42.8 21.3  
  S/FIN/W/88
 
- 34 -   Individual users Firm users Suppliers 
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(% age 
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adults Debit 
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(% age 
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used to 
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payments 
(% age 
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from a 
financial 
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(% age 
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(% age 
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used to 
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(% age 
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(%) Firms using 
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finance 
investments 
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using 
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finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
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per 
100,000 
adults 
Mexico 27.4 .. 22.3 8.3 7.6 3.9 1.5 26.8 16.2 26.9 61.8 45.8 14.9 
Micronesia, Fed. Sts. .. .. .. .. .. .. .. 29.5 7.2 19.4 98.5 8.5 14.2 
Moldova, Rep. of 18.1 1,167.0 16.0 2.2 6.4 0.9 2.3 30.9 30.8 33.7 88.2 28.7 11.3 
Mongolia 77.7 3,183.1 60.6 21.6 24.8 3.6 6.9 51.8 26.5 .. 61.4 31.8 66.4 
Montenegro 50.4 .. 22.0 3.5 21.8 1.9 2.0 46.4 75.8 .. 78.5 65.0 39.6 
Morocco 39.1 .. 22.4 7.4 4.3 2.8 5.1 20.0 12.3 30.2 86.8 21.8 22.3 
Mozambique 39.9 .. 37.3 17.3 5.9 1.3 1.0 6.5 10.5 8.5 75.7 6.5 3.6 
Myanmar .. .. .. .. .. .. .. .. .. .. .. .. 1.7 
Namibia .. 470.4 .. .. .. .. .. 23.6 8.1 19.6 97.5 47.7 7.1 
Nepal 25.3 279.8 3.7 0.5 10.8 0.3 0.4 36.3 17.5 32.1 73.7 6.7 6.7 
Netherlands 98.7 .. 97.6 80.2 12.6 .. .. .. .. .. .. 56.4 21.5 
New Zealand 99.4 .. 93.8 83.2 26.6 .. .. .. .. .. .. 76.6 34.0 
Nicaragua 14.2 .. 8.3 1.5 7.6 0.8 0.2 32.9 21.9 18.4 75.7 10.0 7.4 
Niger 1.5 .. 0.8 0.2 1.3 0.4 0.9 17.6 9.3 33.4 94.0 .. .. 
Nigeria 29.7 506.7 18.6 2.4 2.1 1.4 9.9 2.9 2.7 4.3 .. 12.0 6.4 
Norway .. 1,186.6 .. .. .. .. .. .. .. .. .. 55.2 10.9 
Oman 73.6 1,047.1 53.0 17.5 9.2 .. .. .. .. .. .. .. 23.6 
Pakistan 10.3 256.6 2.9 0.2 1.6 1.5 1.4 2.5 9.7 4.6 64.7 4.8 8.7 
Panama 24.9 .. 11.3 3.0 9.8 0.0 0.0 18.8 1.1 9.0 69.1 47.4 23.9 
Papua New Guinea .. 177.9 .. .. .. .. .. .. .. .. .. 5.2 1.7 
Paraguay 21.7 154.1 11.3 4.2 12.9 1.3 4.3 54.7 30.1 48.0 89.7 18.8 9.5 
Peru 20.5 485.1 14.1 1.9 12.7 1.6 1.4 52.5 45.9 49.9 87.4 29.6 58.7 
Philippines 26.6 458.7 13.2 2.1 10.5 2.1 7.3 21.1 21.9 19.1 97.8 17.7 8.1  
  S/FIN/W/88
 
- 35 -   Individual users Firm users Suppliers 
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(% age 
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accounts 
per 
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adults Debit 
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(% age 
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payments 
(% age 
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from a 
financial 
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used to 
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(% age 
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using 
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finance 
working 
capital 
(%) Firms 
with 
savings 
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checking 
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per 
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100,000 
adults 
Poland 70.2 .. 37.3 31.4 9.6 1.8 0.7 47.5 40.7 28.0 95.8 53.8 32.3 
Portugal 81.2 .. 68.2 48.3 8.3 .. .. .. 24.4 20.3 .. 190.5 64.2 
Qatar 65.9 673.3 49.5 21.9 12.6 .. .. .. .. .. .. 60.5 17.8 
Romania 44.6 .. 27.7 10.5 8.4 0.9 0.5 34.5 37.3 36.0 50.4 .. .. 
Russian Federation 48.2 .. 37.0 7.7 7.7 1.7 1.5 .. 15.8 22.3 .. 152.9 37.1 
Rwanda 32.8 171.5 5.3 0.3 8.4 1.1 2.0 38.8 23.3 43.9 71.2 2.7 5.5 
Samoa .. 815.9 .. .. .. .. .. 45.3 48.3 68.7 97.0 28.0 18.4 
Sao Tome and Principe .. 470.6 .. .. .. .. .. .. .. .. .. 19.3 23.4 
Saudi Arabia, Kingdom 
of 46.4 749.4 42.3 22.6 2.1 15.0 6.5 .. .. .. .. 61.5 8.7 
Senegal 5.8 .. 1.8 0.5 3.5 0.2 0.5 10.8 19.8 9.6 83.4 .. .. 
Serbia 62.2 .. 43.1 9.6 12.3 2.4 0.5 60.4 42.8 29.9 100.0 47.1 9.6 
Seychelles .. 578.4 .. .. .. .. .. .. .. .. .. 36.0 37.2 
Sierra Leone 15.3 153.5 4.0 1.1 6.1 0.7 1.4 14.4 6.9 24.6 67.8 0.4 3.0 
Singapore 98.2 2,216.8 28.6 41.5 10.0 9.8 5.8 .. .. .. .. 60.2 10.2 
Slovak Republic 79.6 .. 68.3 43.4 11.4 3.6 3.9 35.5 33.5 34.0 18.0 52.2 25.8 
Slovenia 97.1 .. 91.9 40.6 12.8 .. .. 66.4 52.2 42.8 99.9 104.6 38.3 
Solomon Islands .. .. .. .. .. .. .. .. .. .. .. 11.1 7.1 
Somalia 31.0 .. 15.6 21.5 1.6 26.2 31.7 .. .. .. .. .. .. 
South Africa 53.6 .. 45.3 13.1 8.9 4.4 5.4 22.9 34.8 21.1 97.9 60.0 10.7 
South Asia 30.3 317.3 4.2 0.5 9.2 1.6 1.2 35.0 43.6 40.6 89.4 7.8 9.7 
Spain 93.3 .. 62.2 43.4 11.4 .. .. .. 32.6 35.8 .. 149.4 89.7 
Sri Lanka 68.5 .. 10.0 0.5 17.7 2.4 1.9 35.0 43.6 40.6 89.4 14.3 16.7 
St. Kitts and Nevis .. .. .. .. .. .. .. 48.5 46.4 52.0 100.0 58.4 37.7  
  S/FIN/W/88
 
- 36 -   Individual users Firm users Suppliers 
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(% age 
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accounts 
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1,000 
adults Debit 
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(% age 
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payments 
(% age 
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from a 
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(% age 
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using 
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(%) Firms 
with 
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100,000 
adults Bank 
branches 
per 
100,000 
adults 
St. Lucia .. .. .. .. .. .. .. 15.9 52.2 49.1 100.0 48.1 22.5 
St. Vincent and the 
Grenadines .. .. .. .. .. .. .. 58.7 55.8 52.7 98.5 26.2 21.2 
Sudan 6.9 .. 3.3 2.1 1.8 4.0 30.5 .. .. .. .. 2.6 2.4 
Suriname .. .. .. .. .. .. .. 44.7 37.0 57.6 100.0 37.3 11.2 
Swaziland 28.6 519.4 21.0 4.7 11.5 4.7 16.2 21.3 7.7 16.0 97.8 24.9 7.2 
Sweden 99.0 .. 95.5 84.9 23.4 .. .. .. .. .. .. 42.9 22.5 
Switzerland .. .. .. .. .. .. .. .. .. .. .. 100.4 51.0 
Syrian Arab Republic 23.3 233.2 6.2 3.1 13.1 0.0 0.0 26.7 20.7 16.0 92.7 7.8 4.0 
Tajikistan 2.5 474.9 1.8 0.7 4.8 25.7 2.1 26.7 21.4 8.0 86.9 7.7 6.7 
Tanzania 17.3 .. 12.0 3.5 6.6 5.5 14.0 11.3 6.8 17.3 86.2 4.5 1.9 
Thailand 72.7 1,123.1 43.1 8.6 19.4 0.5 2.4 55.1 74.4 71.9 99.6 77.9 11.3 
Timor-Leste .. .. .. .. .. .. .. 5.3 1.6 2.6 87.8 .. .. 
Togo 10.2 203.6 1.2 0.0 3.8 0.4 0.2 22.2 16.9 16.9 94.2 .. 4.2 
Tonga .. .. .. .. .. .. .. 52.9 33.9 3.0 100.0 27.7 21.5 
Trinidad and Tobago 75.9 .. 64.1 9.3 8.4 3.6 3.0 46.8 36.7 63.8 99.9 .. .. 
Tunisia 32.2 757.4 21.0 2.7 3.2 0.0 0.0 .. .. .. .. 22.0 17.2 
Turkey 57.6 922.0 56.6 11.1 4.6 4.3 2.2 50.5 51.9 36.8 90.6 59.1 18.3 
Turkmenistan 0.4 .. 0.3 0.0 0.8 0.0 0.0 .. .. .. .. .. .. 
Uganda 20.5 186.1 10.3 3.1 8.9 3.3 20.0 15.4 7.7 14.0 85.8 3.8 2.4 
Ukraine 41.3 3,335.1 33.6 6.4 8.1 1.7 9.0 26.3 32.1 27.3 90.2 83.8 1.6 
United Arab Emirates 59.7 .. 55.4 14.8 10.8 11.7 8.3 .. .. .. .. 66.9 14.5 
United Kingdom 97.2 .. 87.6 65.3 11.8 .. .. .. .. .. .. 122.8 24.9 
United States 88.0 .. 71.8 64.3 20.1 .. .. .. .. .. .. 173.4 35.4  
  S/FIN/W/88
 
- 37 -   Individual users Firm users Suppliers 
Country Account 
at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
card 
(% age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay 
bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
15+) Small 
firms 
with a 
bank 
loan or 
line of 
credit 
(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks 
to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
Uruguay 23.5 634.5 16.4 3.2 14.8 0.3 0.4 41.9 13.7 26.4 43.2 40.0 13.7 
Uzbekistan 22.5 959.2 20.4 4.3 1.5 5.3 0.2 9.5 8.2 15.0 93.8 4.5 47.7 
Vanuatu .. .. .. .. .. .. .. 45.2 41.4 33.2 96.0 29.0 20.9 
Venezuela, Bolivarian 
Rep. of 44.1 .. 35.1 15.0 1.7 1.3 0.3 25.6 35.3 27.1 96.5 41.9 17.1 
Viet Nam 21.4 .. 14.6 2.5 16.2 3.6 2.8 36.5 21.5 47.0 89.4 20.0 3.6 
West Bank and Gaza 19.4 ..  10.7 1.7 4.1 2. 6 0.4 11.2 4.2 14.2 87.8 .. .. 
Yemen 3.7 90.3 2.2 0.6 0.9 0.8 1.3 5.7 4.2 6.0 31.3 3.7 1.8 
Zambia 21.4 27.4 15.7 3.3 6.1 2.4 3.0 6.3 10.2 15.0 95.0 7.5 4.4 
Zimbabwe 39.7 161.5 28.3 6.9 4.9 2.6 1.5 4.2 13.0 12.7 93.5 5.2 4.6 
Source: Global Financial Development Database.  
  S/FIN/W/88
 
- 38 - Table A2. Financial inclusion in differen t regions (2011) – selected indicators 
  Individual users Firm users Suppliers 
Region Account at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 1,000 
adults Debit 
card (% 
age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan from a 
financial 
institution in 
the past 
year (% age 
15+) Mobile 
phone 
used to 
pay bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
15+) Small 
firms with 
a bank 
loan or 
line of 
credit (%)Firms 
using 
banks to 
finance 
invest-
ments (%)Firms 
using 
banks to 
finance 
working 
capital 
(%) Firms with 
savings 
and 
checking 
account ATMs per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
East Asia & Pacific 
(developing only) 26.8 969.5 14.6 3.1 16.2 1.3 0.6 29.5 21.9 19.3 96.0 20.0 10.7 
Europe & Central 
Asia (developing 
only) 42.1 816.7 27.7 4.5 9.4 1.9 1.5 34.5 34.7 40.0 92.1 41.7 17.0 
Latin America & 
Caribbean 
(developing only) 27.7 609.6 15.6 4.2 9.0 1.2 1.1 38.9 34.5 44.5 96.5 35.0 17.1 
Middle East & 
North Africa 
(developing only) 24.4 565.1 12.1 1.9 4.4 0.8 0.4 2.8 2.7 4.6 43.2 22.0 19.1 
Sub-Saharan Africa 
(developing only) 17.5 191.5 5.7 2.1 4.9 1.4 3.5 16.0 20.0 19.5 94.1 7.0 4.1 
Source: Global Financial Development Database.  
  S/FIN/W/88
 
- 39 - Table A3. Financial inclusion in different income  groups worldwide (2011) – selected indicators 
  Individual users Firm users   Suppliers 
Level of income Account 
at a 
formal 
financial 
institution 
(% age 
15+) Bank 
accounts 
per 
1,000 
adults Debit 
card (% 
age 
15+) Electronic 
payments 
used to 
make 
payments 
(% age 
15+) Loan 
from a 
financial 
institution 
in the 
past year 
(% age 
15+) Mobile 
phone 
used to 
pay bills 
(% age 
15+) Mobile 
phone 
used to 
send 
money 
(% age 
15+) Small 
firms 
with a 
bank 
loan or 
line of 
credit 
(%) Firms using 
banks to 
finance 
investments 
(%) Firms 
using 
banks to 
finance 
working 
capital 
(%) Firms 
with 
savings 
and 
checking 
account ATMs 
per 
100,000 
adults Bank 
branches 
per 
100,000 
adults 
High income 90.1 1,168.2 68.8 44.8 11.6 4.0 2.0 48.5 44.8 46.3 97.9 73.4 27.7 
Low & middle income 25.3 485.1 12.8 2.7 7.6 1.3 1.5 16.0 20.0 19.5 91.5 25.3 9.9 
Low income 13.4 154.4 2.9 0.6 6.1 0.8 1.4 16.0 20.0 19.5 94.1 3.2 2.7 
Lower middle income 21.4 519.4 11.0 2.2 6.8 1.5 2.7 35.0 43.6 40.6 89.4 16.5 9.1 
Middle income 29.5 635.4 16.6 3.2 7.9 1.6 1.5 18.9 23.2 22.6 66.3 29.7 13.9 
Upper middle income 43.1 695.4 28.7 6.8 9.1 1.8 1.4 2.8 2.7 4.6 43.2 38.4 17.1 
World 38.2 609.1 21.3 4.7 8.4 1.7 1.5 16.0 20.0 19.5 91.5 37.2 16.6 
Source: Global Financial Development Database 
 
Table A4. Major Aspects of Disclosu re Regimes in selected countries 
 Armenia Bosnia – 
Herzegovina 
 Cambodia Ghana Pakistan Peru Philippines WAEMU 
Content of 
disclosure to consumer • APR, with 
formula • Fees and 
penalties (no penalty allowed for prepayment) • Insurance 
premiums 
• Repayment 
schedule 
• Foreign 
exchange risk (if any) 
• Right to • EIR, with 
formula 
• General 
reference to terms 
• Repayment 
schedule 
• Foreign 
currency indexing (if any) • Interest 
assessed on declining balance (rather than flat rate) • Amortization 
table • APR 
• Other credit 
costs • Total amount 
of payments • Costs for 
breach • Repayment 
schedule • Demand 
clause or variable rate (if any) •Insurance • APR 
• General 
reference to important terms • Annual EIR, 
with formula 
• Total amount 
of interest 
• Default rate 
• Commissions 
and fees, including insurance 
• Repayment 
schedule 
• Source of 
variable terms 
• Right to prepay • 
Simple annual 
rate, with formula; EIR in certain circumstances • Finance 
charges (interest + fees) • Other charges 
(e.g., insurance, taxes) • Total amount 
financed •Delinquency • EIR 
• Nominal 
interest • General 
reference to terms  
  S/FIN/W/88
 
- 40 -  Armenia Bosnia – 
Herzegovina 
 Cambodia Ghana Pakistan Peru Philippines WAEMU 
complain and 
internal/external 
complaint procedures premiums and prepayment 
penalty fees 
• Information 
about complaints mechanism 
 rate 
Methods of 
disclosure to 
consumer • Simple language, 
no hidden terms 
• Oral advice on 
main terms and 
costs before 
signing 
• Sufficient time 
for customer • Before client 
receives loan 
application and 
before 
concluding 
agreement N/A • Form of pre-
agreement 
statement 
• Before 
conclusion of 
agreement • Oral • Legible and 
comprehensible 
form contracts 
• Summary sheet 
• Specialized 
personnel 
• Before signing, 
signed by 
borrower • Clear 
statement in 
writing 
• Standardized 
disclosure form 
in info not in 
contract 
• Before signing, 
signed by 
borrower N/A 
Disclosure to 
public • Required 
information on Web, ads, bulletins • EIR clearly 
and prominently in branches, ads, media N/A • Required 
information in written solicitations 
• Regulator 
publishes online table comparing prices for 
products • General 
requirement to display in branches, brochures • Required 
information constantly disseminated via branches, Web, other media, brochures • Rules on font, 
placement 
• Regulator 
publishes online table comparing prices for products  • Required 
information in branches • Rules on poster 
size • Required 
information visible in branches • Dissemination 
in all forms of media 
Applicability Consumer credit 
contracts  
US$269 – 
US$26,885 Banks and 
micro-credit 
organizations Rural credit 
specialized 
banks, 
licensed MFIs, 
NGOs Credit 
agreements of 
US$66.7 or 
more Microfinance Credit contracts 
involving 
instalment 
payments, 
regulated and 
unregulated 
providers 
 Credit granting 
institutions Banks, MFIs, 
government and 
post office 
financial  
  S/FIN/W/88
 
- 41 -  Armenia Bosnia – 
Herzegovina 
 Cambodia Ghana Pakistan Peru Philippines WAEMU 
Relevant laws 
and 
regulations Law on Consumer 
Credit, Central 
Bank Regulation 8/05 Decree/decision 
on Calculation 
and Disclosure of Effective Interest Rate, Law on Banks, Law on Microcredit Organizations Prakas on the 
Calculation of 
Interest Rate on Micro-Finance Loans Borrowers and 
Lenders Act Prudential 
Regulations 
for Microfinance Banks Consumer 
Protection and 
Defence Code, Complementary Law to Consumer Protection Law Concerning Topic of Financial Services, Regulation of Transparent Information and Negotiation with Financial Consumers  Truth in Lending 
Act, Manual of 
Regulations for Banks, Manual of Regulations for Non-Bank Financial Institutions Decision No. 
397/12/2010 
Source: Chien (2012) 
Note: APR (Annual Percentage Rate); EIR (Effective Interest Rate); WAEMU (West African Economic and Monetary Union) 
 
Table A5. Agent banking regulation and impact 
Country Total 
number of 
agents Number of 
agents per 
100,000 Type of agents Exclusivity allowed? Roles & responsibilities 
(financial providers vs. agents 
Colombia 13,296 29 Bank-based: retail 
outlets (entities or individuals) Not mentioned in regulation Bank fully liab le for agent's actions and responsible for 
AML/CFT, customer liability and consumer protection. Agent undertakes CDD. No mention of financial education. 
Brazil 160,943 84 Bank-based: post 
offices, lottery outlets, 
retail outlets (entities or 
individuals) Not mentioned in regulation Bank fully liable for agent's actions and responsible for 
ensuring agent's compliance with AML/CFT, customer 
protection. No mention of financial education. 
Peru 9,204 506 Bank-based: retail 
outlets (entities or individuals) Not mentioned in regulation Banks fully liab le for service delivery, risk management & 
legal compliance for all agent operations.  
  S/FIN/W/88
 
- 42 - Country Total 
number of 
agents Number of 
agents per 
100,000 Type of agents Exclusivity allowed? Roles & responsibilities 
(financial providers vs. agents 
Kenya 45,449 112.5 Both bank and nonbank-
based: For-profit entities 
only: retail outlets, post 
offices, telco companies, 
hotels (entities or sole 
proprietorships) Prohibited for bank-based model; 
not mentioned in regulations for 
nonbank-based model Bank fully liable for agent's actions and responsible for 
ensuring agent's compliance  with AML/CFT and risk 
management. No mention of, financial education. 
India 58,351 5 Both bank and nonbank-
based: post offices, technology firms, retail outlets (entities or 
individuals) Bank-based: agent with multiple 
retail outlets may provide services to multiple banks, but each individual agent outlet may 
only offer services on behalf of a 
single bank. Nonbank-based model: not mentioned in regulations Banks fully liable for agent's actions, customer protection, 
risk management, CDD & AML/ CFT. Agent responsible for 
financial education 
Source: Oxford Policy Management Ltd. (2011)  
__________