Research On Practices And Policies For Developing Inclusive Finance In China

It’s a right for everyone to enjoy the standard financial service. However, according to statistics of World Bank, only one third of people hold some savings in the developing countries till 2012. The poverty needs various financial products for accumulating wealth, consumption smoothing and reducing risk. Meanwhile, the Medium and Small Enterprises should optimize the financial management and control risk. In 2005, the United Nations advocated establishing the financial inclusion system which has been developed rapidly and researched in the world since then.It’s relatively late for China to introduce the financial inclusion. However, the development in China is above the average level in the world, even in some field. Although the financial reform has been improved efficiently, there are some problems in the financial products, infrastructure, financial tax policies and protecting consumers. It’s urgent that how to balance the financial inclusion, adopt which method, how to situate the role of the government, how to design policies for developing the financial inclusion. All of these provides space for the research.First, the author collects international and domestic definitions and theories of financial inclusion according to bibliography, which will support the research. According to the field survey, the author gets a general understanding about the financial inclusion access, financial products and service as well as the current conditions and problems. The indicator system has been established from three aspects including access, usage and service quality of financial service. The author adopts the analytic hierarchy process(AHP) to identify the developing index for financial inclusion with the help of data from thirty-one provinces in 2014. From the research results, the development of financial inclusion is not balanced in China. It’s well developed in Shanghai, Beijing and Tianjin. It’s developing to a low stage in Xinjiang, Qinghai and Tibet, which is consistent with the provincial economy. From the east, west and middle areas, the development of financial inclusion in east is relatively high, in west is low.Second, it’s necessary to find reasons for preventing the development to design the effective policies for the financial inclusion. The financial service supporters think that there are some factors for preventing the development of the financial inclusion: right of legislation and supervision, government stimuli, technique appliance, the credibility of the financial institution, the convenience of the geography, the charge for service, the service quality, the consumers’financial knowledge, the clarity of the financial products, the scope of the financial products. However, the requires don’t agree with this point. There is gap between the promoters of the financial inclusion and the service supporters, which should be took into consideration in the promotion of the financial inclusion. The author tries to find the reasons for using and not-using the financial inclusion in this thesis with the help of the questionnaire. According to the analysis, the most influenced elements are the credibility of the financial service supporters, the clear-understanding products, the clear usage requirements and the service price. The following elements, such as the shortage of the knowledge about the products, shortage of the product usage as well as lack of the decisive capability, impede them from the financial service.The requirement of the financial inclusion is numerous. In order to promote the financial development and respond to the supply side reform, it’s necessary to improve the service quality and efficiency of the financial inclusion with more supply. Combined with the results of the financial service of consumers, promotion of the development of the financial inclusion, it’s essential to promote more financial service and focus on the service quality for identifying the consumer’s knowledge.Moreover. the thesis analyzes the human’s behavior’s characteristics to find out the differences between the people’s decision in daily life and ration in the standard economy model with the help of the behavioral economics. The financial education and methods are put forward. At last the author adopts the experimental ways to compare the traditional financial education and the efficiency of the rule of thumb based on the behavioral economics. According to the results, it’s not difficult to find out the two methods for improving the financial education is good for the financial practices. The influencing level is dependent on the forms and contents of supplying financial education. The traditional financial education does not work. Meanwhile, the rule of thumb based on the behavioral economics plays an important role.The last but not the least, the author analyzes the functions of governments in the world during the development of the financial inclusion. With the current conditions in China, we should stick to the strategy of "Government guides market". The government should play an important role in the designing policies, promoting the market sale as well as the infrastructure construction with the advanced experience of the development of the financial inclusion in other countries. Moreover, the measurements will be put forward from three aspects such as the access, usage and quality of the financial products and service with the analysis of the current conditions, problems and causes of the financial inclusion. The policies for promoting accessibility of financial products and service are to design the national development strategies, strengthen the policy support, enhance the infrastructure construction, improve the service and product supply, enhance the consumer’s protection as well as collect data and measurement skills. It’s not a bad idea for improving the financial service quality that we should design methods with the help of NUDGE policies from western countries:To design suitable educational contents and extending ways for consumer’s financial education for improving their decisive capability with more consumer’s participation; To protect the consumers with more information, improvement of the decisive environment, product control, product characteristics as well as the product distribution; To improve the service quality in accordance with the supervision financial institution which relies on the change of the policy environment, cannot supply proper products, does not distribute products properly, cannot provide adequate stimulating policies and is dependent on the techniques.