Financial Inclusion in Asia: An Overview

Abstract

This paper provides an analysis of financial development and inclusion in developing Asia using data from a wide array of sources. We show that in terms of aggregate measures of financial development, the region as a whole has superior banking sector depth compared to other developing regions; however, this masks a great deal of variation across Asian economies. Furthermore, in terms of financial inclusion, fewer than 27% of adults in developing Asia have an account in a formal financial institution, and only 33% of enterprises report having a line of credit or a loan from a financial institution. Cost, geographic access, and lack of identification are the most commonly reported barriers to financial inclusion that can be addressed by policy makers.

Keywords: financial development, financial inclusion, financial system

JEL Classification: D14, G20, G21, G30