Financial Regulations for Improving Financial Inclusion

Poor regulation is one of the major obstacles to financial inclusion. Others include lack of good infrastructure, weak institutions and poor cooperation, and unstable economic and political conditions. The report of CGD’s Financial Access Task Force, however, focuses solely on regulatory issues for two main reasons. First, regulatory changes often are needed to enable the successful adoption and adaptation of new innovations in digital finance, encourage their use, and increase competition among their providers, so that those new technologies can benefit the poor. Second, progress in improving financial inclusion must be compatible with the traditional mandates of financial regulation and supervision: safeguarding the stability of the financial system, maintaining its integrity, and protecting consumers.