Inclusive Finance’s Internal Need: Serving Vulnerable People

• DOI: http://doi.org/10.1002/jsc.2111
• Date: 01 March 2017
• Published date: 01 March 2017

RESEARCH ARTICLE

Strategic Change 26: 73–82 (2017)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2111

Copyright © 2017 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2111

Inclusive Finance’s Internal Need:

Serving Vulnerable People1

Xiao Shan Du

Rural Development Institute of China, Academy of Social Sciences, China

Developing inclusive nance plays an important role in achieving one objective of

the 13th ve‐year plan for advancing nancial reform in China.

In the 13th ve‐year plan released recently by the Chinese government, the chapter

Accelerating the Financial Structure Reform stressed explicitly ‘the development of

inclusive nance and multiple small and micro nancial institutions.’ e chapter

Innovation in Rural Agriculture Services of the Improving Agriculture Support

Framework stated, ‘various kinds of nancial institutions should support agriculture

and develop rural inclusive nance.’

Before the release of the 13th ve‐year plan, the Chinese government had

approved and published the Plan for Inclusive Finance Development (2016–2020),

hereafter referred to as ‘the plan.’ is plan dened the guiding theory, principles,

and objectives of China’s inclusive nance development. e plan also put forward

a set of policy measures and support means in terms of service providers, product

innovation, infrastructure, laws and regulations, and education. In the author’s

understanding, the approval of this plan was a landmark event because developing

inclusive nance plays an important role in achieving one objective of the 13th

ve‐year plan for advancing nancial reform.

Target group and service level of China’s inclusive nance

Currently, the main target groups of China’s inclusive nance are micro and

small businesses, farmers, urban low‐income people, the poor and disabled

people, the elderly, and other vulnerable people. It is necessary to open up access

to formal nancial services for these vulnerable groups. Such nancial services

include aordable, safe, convenient and suitable deposits, loans, insurances,

transfers, direct nancing, and others. e Chinese inclusive nance’s policy is

to improve the coverage of nancial services (depth and outreach), their acces-

sibility (availability for various needs), client satisfaction (quality and level of

1 JEL classication codes: G21, G32.

In order to develop China’s

inclusive nance, China has to

start with top‐level design by

raising awareness and establishing

theoretical guidelines, a complete

strategic plan, an executive plan,

implementation measures, and a

supervision system.

This systemic approach should

combine political, commercial,

and cooperative nance with

informal nance.

Meanwhile, a ‘trial‐and‐error’

method should be encouraged

from the bottom up during

nancial reform.