Innovating Financial Inclusion: Postal Savings System Revisited

Abstract

Mobilizing domestic financial resources like savings is crucial for Asia’s developing economies. Savings are important because they permit investment, which in turn increases the productive capacity of an economy. They also play a significant role in financial intermediation in a sense that savings funds intermediated by the banking system can be used as credit to finance development activities. Unfortunately, due to different levels of financial sector development, access to financial services such as credit, savings, and payment services remain limited in developing Asia. For example, only 36% of adults in East Asia and the Pacific have formal savings accounts and 11% have access to formal credit, as of 2014.