The AFI’s South Asia Region Financial Inclusion Initiative: A Regional Commitment to Inclusive Financial Services

Posted on Dec 14, 2022 by Ritesh Thakkar, Senior Manager – Asia Region, Alliance for Financial Inclusion (AFI)

Financial Inclusion in South Asia

Tremendous advances have been made by the South Asian central banks and financial regulators over the past decade to advance financial inclusion in the region. In 2011, only 23 percent of adults had access to financial services in six countries represented by member institutions of the Alliance for Financial Inclusion (AFI) — Bangladesh, Bhutan, Maldives, Nepal, Pakistan, and Sri Lanka. By 2021, that figure had risen to over 40 percent according to the World Bank’s 2021 Global Findex.[1]

Despite these gains, more than 150 million adults in South Asia remain without access to finance. The gender gap in account ownership stands at double the global average, and the devastation from impacts of climate change on the people of this region is not a future hypothetical, but a present reality.

Against this backdrop and the impacts of the Covid-19 pandemic, AFI’s eight South Asian member institutions came together at the Global Policy Forum (GPF) in September 2022 to launch the South Asia Region Financial Inclusion Initiative (SARFII). With AFI coordinating and facilitating the initiative, members are collaborating and sharing best practices to drive national and regional financial inclusion.

SARFII’s eight member institutions include Bangladesh Bank, Microcredit Regulatory Authority of Bangladesh, Insurance Development and Regulatory Authority of Bangladesh, Royal Monetary Authority of Bhutan, Maldives Monetary Authority,[2] Nepal Rastra Bank, State Bank of Pakistan, and the Central Bank of Sri Lanka.

South Asia’s Financial Inclusion Linkages

Asia is one of the largest and most diverse continents in the world, whose 4.28 billion (2020) people account for ~54 percent of the world’s population. Within AFI, Asia can be categorized under three sub-regions: South Asia, East Asia, and South-East Asia. Given the region’s geographic, economic, and cultural diversity, there is a need to have a tailored sub-regional approach to meet the specific financial inclusion needs of South Asian members.

There are, of course, differences among the six countries represented by AFI member institutions in South Asia. Each nation currently finds itself ...

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[1] Serving as Chair and Vice-Chair of SARFII for the first term (2022-2024) are Maldives Monetary Authority and Nepal Rastra Bank, respectively.

[2] These figures do not include India, which is not part of the AFI member institutions.