Financial Institution Risk Management in Timor-Leste: Central Bank’s Latest Report Highlights Progress towards Financial Inclusion
The Banco Central de Timor-Leste (BCTL) has released its latest financial inclusion report, showcasing significant strides made in the country’s efforts to boost access to financial services through digitization.
Key Findings and Achievements
- A 200% increase in access points
- Increased uptake of financial services
- Key results from a demand-side survey
The report highlights the importance of modernizing the national payment system, which has enabled financial institutions to connect with e-wallet services through an interoperable national switch. This development allows customers to transact digitally between service providers and facilitates transfers between bank accounts and e-wallet accounts.
Progress towards Financial Inclusion
- Bank account ownership among Timorese adults increased from 57% to 61% by the end of 2020 compared to 2018
- Women’s participation in banking has increased to 65%, outpacing men at 57%
- Non-regulated financial services and electronic wallets have also seen growth, with e-wallets accounting for 13% of the market
Global Recognition and Recommendations
The Asia-Pacific Financial Inclusion (AFI) Executive Director, Dr. Alfred Hannig, commended the report as an “essential read” for informing local authorities’ financial inclusion policies and strategies.
- Timor-Leste has bucked global trends with a positive gender gap of eight percent in women’s financial inclusion
- The need for greater protection for consumers and integrity of financial services is emphasized as the country’s digital financial services landscape continues to evolve
Next Steps
BCTL has been a key player in promoting financial inclusion, publishing its first financial inclusion report in 2016 and launching the country’s national strategy for financial inclusion (NFIS) in 2017. As an active member of AFI since 2010, BCTL has made significant progress towards achieving inclusive and sustainable financial sector goals.
- The need to leverage AFI’s resources, including working groups, regional initiatives, capacity building, and peer learning exchanges, is emphasized to further advance financial inclusion in Timor-Leste.