Expanding Financial Inclusion through Digital Financial Services: A Literature Review

Leora Klapper

No 11008, Policy Research Working Paper Series from The World Bank

Abstract: Worldwide, account ownership increased by 50 percent in the 10 years spanning 2011 to 2021, to reach 76 percent of the global adult population. The goal of financial inclusion is not just for more adults to have accounts but for account owners to benefit from using them, such as for digital payments, which provide a range of positive benefits that extend far beyond convenience. This paper reviews the evidence demonstrating how digital payments can expand financial inclusion among recipients and encourage the use of additional formal financial services, such as savings, credit, and insurance. It explores how digital transactions offer greater security and privacy, especially for women, as well as opportunities to build a digital credit history for credit risk assessments. The introduction of digital payments to low-income adults brings some risks, however, such as fraud and phishing scams targeting accounts, over indebtedness in digital credit, and customers receiving incomplete or incorrect information on the fees and costs of financial products.

Date: 2024-12-19
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