Financial Inclusion, Regulation, Literacy, and Education in Central Asia and South Caucasus

Financial inclusion is receiving increasing attention as having the potential to contribute to economic and financial development, while fostering more inclusive growth and greater income equality. At the same time, improvements in financial literacy need to be made so that individuals and small firms can take advantage of increased access to financial products and services. Although substantial progress has been made, there is still much to achieve. The emerging economies in Central Asia and the South Caucasus have faced particular challenges in this area as a result of the legacy of the breakup of the Soviet Union and the ensuing economic and financial disruptions. This book surveys the experiences of seven countries—Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan—to assess factors affecting the ability of low-income households and small firms to access financial services, including financial literacy, financial education programs, and financial regulatory frameworks. It identifies policies that can improve their financial access while maintaining financial stability and ensuring consumer protection. The book takes a practical and holistic approach to issues related to financial inclusion. For example, innovative methods of promoting financial access, such as mobile phone banking and microfinance, require corresponding innovations in regulatory frameworks, perimeters, and capacity. Moreover, financial regulation, financial education, and consumer protection policies need to be coordinated to enable households and small firms to develop trust in the formal financial system.