Digital finance for all: Powering inclusive growth in emerging economies, a McKinsey Report was released on 22nd September 2016. The report makes for a comprehensive quantification of the economic and social impact to emerging economies of digital finance, or financial services delivered via digital technologies-- mobile phones or the Internet--with less use of cash and traditional bank branches. Apart from econometric modeling, the report draws on findings from seven country visits that cover a range of geographies and income levels (Brazil, China, Ethiopia, India, Mexico, Nigeria, and Pakistan) and more than 150 expert interviews. Inputs from the Indicus Centre for Financial Inclusion have been included in the report.
Today, two billion individuals and 200 million small and mid-sized businesses in emerging economies lack access to savings and credit. Even those with access must often pay high fees for limited product choice. Economic growth suffers. But a solution is literally at hand. Digital tools - mobile phones and the internet - dramatically reduce the cost for finance providers to reach and serve customers, thereby raising productivity and investment in the economy and making financial inclusion a reality.
MGI finds that widespread adoption of digital finance in emerging economies could:
The report explores the three building blocks that need to be in place for developing countries to capture the digital finance opportunity:
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