Financial Crime World

AZERBAIJAN LAGS BEHIND COMPARATOR COUNTRIES IN FINANCIAL ACCESS AND INCLUSION, SAYS WORLD BANK REPORT

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Progress Despite Challenges in Financial Sector Development

Baku, May 24, 2016 - Azerbaijan has made significant progress in developing its financial sector and raising financial literacy over the past several years. However, according to a new World Bank report, the country still lags behind many comparator countries in terms of financial access and inclusion.

Key Findings of the Report

  • Only 36.4% of adults in Azerbaijan have a bank account.
  • This is lower than the average for upper-middle-income countries.
  • The report compares Azerbaijan’s financial access and inclusion with those of Georgia (39.7%), Kazakhstan (53.9%), Turkey (56.6%), Romania (60.8%), and Serbia (83%).

Recommendations to Improve Financial Access and Inclusion

The report recommends that the government take steps to enhance financial stability, strengthen consumer protection, and develop quality financial services. Key recommendations include:

  • Reducing the cost of basic financial products through increased efficiency of banks and higher transparency and competition in the financial sector.
  • Developing non-bank financial institutions and modern distribution platforms for financial services, including e-banking and mobile banking.
  • Leveraging the national postal operator, Azerpost, to deliver basic financial services to a wider population.

Challenges to Financial Access and Inclusion

The survey highlights that households with lower incomes, unemployed individuals, and younger women tend to have lower levels of financial inclusion. The report notes that limited distribution networks and insufficient consumer protection frameworks also constrain financial access and inclusion.

Call for Action

To address these challenges, the report recommends implementing a national financial literacy strategy and developing an action plan supported by public and private stakeholders. It also suggests creating a financial ombudsman for complaints handling.

Background on the Report

The “Enhancing Financial Capability and Inclusion in Azerbaijan” report was prepared at the request of the Central Bank of Azerbaijan under the Consumer Protection and Financial Literacy technical assistance project funded by Switzerland’s State Secretariat for Economic Affairs (SECO).