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Financial Market News

Financial Inclusion as the Driver of the Economic Growth: What the Government, Businesses and the Public Need to Do
12 June, 14:33

Financial Inclusion as the Driver of the Economic Growth: What the Government, Businesses and the Public Need to Do

On 12 June, Kyiv UNIT.City the first Ukrainian innovation park hosts the second internal Forum on Financial Inclusion: Leaving No One Behind. As last year, the Forum was co-organized by the National Bank of Ukraine (NBU), market players, and international partners. This year’s event brought together speakers from Australia, India, Kenia, Norway, Poland, the UK, the US, Turkey, and over 300 guests of the forum, such as, officials, entrepreneurs, experts, educators, and civic activists.

The Forum was honored with the statement of HM Queen Maxima of the Netherlands serving as the UN Secretary-General's Special Advocate for Inclusive Finance for Development (UNSGSA), Honorary Patron of the G20's Global Partnership for Financial Inclusion (GPFI), and Honorary Chair of the Dutch Money Wise Platform. HM Queen Maxima is a leading global voice on advancing universal access to and responsible usage of affordable, effective and safe financial services.

“On a global level, we have witnessed policy makers and the private sector contribute to rapid progress by harnessing the power of digital technology and finding solutions together. I encourage all stakeholders — both from the public and private sectors — to collaborate as each of us search for ways to fuel economic growth in Ukraine and abroad, as well as to improve the financial lives of everyone,” urged HM Queen Maxima of the Netherlands in her written address to the Forum participants. Eduard Hoeks, the Netherlands Ambassador to Ukraine, read the statement.

Along with HM Queen Maxima, a welcoming speech was delivered by Susan Fritz, USAID Mission Director to Ukraine, Belarus and Moldova. “Financial sector development is not simply an outcome of economic growth; financial sector development fuels economic growth. To achieve sustainable economic growth, Ukraine needs a well-developed and inclusive financial sector,” said Susan K. Fritz, USAID Regional Mission Director to Ukraine and Belarus.

NBU Governor Yakiv Smolii presented the keynote speech at the Forum.

“Financial inclusion multiplies possibilities of Ukrainians. Access to loans advances business and access to insurance creates a safety cushion. At the macroeconomic level this translates into the country’s capacity to tackle crises. At a personal level, it gives Ukrainians a chance to be prepared for rapid changes and unexpected developments that have permeated the life of our country for the past two decades,” NBU Governor Yakiv Smolii focused on the positive outcomes of improved accessibility of financial services.

What are the areas that require more efforts from Ukraine? Organizers suggest to consider this issue at discussion panels.

Financial Inclusion: Global Trends and Practices

“The key success factor in involving people in the financial system is cooperation of business with the state. Today, the cashless infrastructure of the country develops exponentially, and smart city solutions generated by partnerships on integrating payments in the city infrastructure, often become the driver for cashless life style. We see a lot of potential from introducing digital solutions for the development of the cashless economy. According to the MasterCard Digitalization Trust Survey 2019, Ukrainians are very open to innovations and even outpace some European countries: 87% of our fellow citizens are willing to pay with their smartphones, 58% of Ukrainians already use pay apps and this is one of the highest rates in Europe. We put a lot of effort in introducing technological solutions for stimulating more Ukrainians to favor cashless payments and engage in the financial system,” noted Inga Andreieva, Country Manager of MasterCard in Ukraine and Moldova.

Access to and Usage of Financial Services by All: Whose Responsibility?

“Trust is an important factor in using financial services. In order to improve trust and advance financial inclusion the NBU sets new standards for protection of financial service consumers’ rights. We are initiating a new regulation. Three main steps towards implementation of the new regulation: drafting new regulation of customer/financial services provider relationship; establishing a new unit at the NBU that will handle public requests, as well as launching a Call-Center and a Single Customer Support Center, so that they could receive prompt replies to their questions,” said NBU Deputy Governor Roman Borysenko.

Financial Literacy: Helping Ukrainians Be in Control of Their Financial Lives

“A national strategy for financial literacy is being implemented already in 50 countries. Positive outcome of the national approach does not cast any doubt, since countries that were the first to implement actions based on the strategy make up most of the leaders in financial literacy. A financial literacy strategy common for the entire financial sector was long awaited by the market players. At present, based on major outcomes for the last 5 years, the NBU as the leader of the financial sector reform among state agencies presented its vision for the future. Most importantly, the strategy is intended to give Ukrainians specific skills and expertise for a successful financial life and private financial stability,” noted NBU Director of Communications Department Nataliia Bondarenko.

Business and Innovations: a Tandem of Both the Government and Industry

“According to the World Bank survey, a third of Ukraine's population are left out of the financial system. Regarding the economically active population according to Visa, three main trends can be singled out that favor financial literacy. First, effects of barriers in using cashless payment at the financial literacy level, for example associated with security. Second, accessibility of cashless payments, i.e., the option to pay using contactless devices for transport develops a habit and fosters on overall increase in contactless payments. And third, the quality of interaction and functionality of on-line and mobile banking and information that a consumer receives from the issuing bank,” said Vira PLATONOVA, Senior Vice President, Visa Group Country Manager for CIS and South East Europe.

At the Forum the NBU will declare its intentions to advance efforts on consumer rights protection and will present to the market its vision of the strategy for financial literacy.

Full speech of NBU Governor Yakiv Smolii.

Streaming and more details about the Forum:

For reference:

Forum organizers: the NBU, the USAID Financial Sector Transformation Project, and the MasterCard and Visa companies.

The forum is a platform for debate about the availability of financial services in Ukraine, for the exchange of ideas between state authorities, businesses and nongovernment institutions, and for agreeing further steps towards creating a financially inclusive Ukrainian society.

The NBU identifies financial inclusion as one of its strategic goals. Financial inclusion means creating conditions that encourage all segments of the population to use various financial services that are accessible, affordable, regulated, and fitting their needs in order to stimulate economic growth and reduce inequality in society.

Under the OECD/INFE working definition, financial inclusion refers to the process of promoting affordable, timely, and adequate access to regulated financial products and services and broadening their use by all segments of society through the implementation of tailored existing and innovative approaches, including financial awareness and education, with a view to promoting financial wellbeing as well as economic and social inclusion.

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