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China’s Experience in Digital Financial Inclusion

Digital financial inclusion has adhered to the G20 High-Level Principles for Digital Financial Inclusion, which were adopted and published at the Summit in Hangzhou in 2016



Financial inclusion is the next step in the evolution of financial systems and has played a key role in the development of China’s finance. Before 1978, China’s macro economy was primarily regulated through fiscal policies, first establishing a modern banking system in 1985 with the creation of the People’s Bank of China — China’s central bank — along with commercial banks. Later, in 1991, the Shanghai Stock Exchange marked the emergence of capital markets in China. And more recently, China has been progressing towards financial inclusion; in 2007, the country established its first micro-loan company pilots, and in 2009, the ChiNext stock market (for growth enterprises) in the A-shares market (RMB-denominated equity shares of China-based companies and trade on either the Shanghai Stock Exchange or Shenzhen Stock Exchange).

On December 31, 2015, the State Council issued the Plan for Promoting the Development of Financial Inclusion (2016–2020), signaling the strategic importance of financial inclusion for China. Within this context, digital financial inclusion — a recent trend and business model in financial inclusion — has also been flourishing in China. Bei Duoguang and Li Yan (2017) define digital financial inclusion as a model of financial inclusion enabled by digital technologies. In China, it has already gone through four development stages, namely start-up, slow development, explosive growth, and then transformation and regulation. Throughout its development, digital financial inclusion has adhered to the G20 High-Level Principles for Digital Financial Inclusion, which were adopted and published at the Summit in Hangzhou in 2016 and aim to optimize inclusive finance services and increase people’s well-being.


There are four main drivers of digital financial inclusion in China: advanced FinTech, optimized infrastructure, stable and inclusive regulation, as well as innovation in business models and products.

Implied in its name is the dependence of digital financial inclusion on digital technologies, such as cloud storage, big data, cloud computing, artificial intelligence (AI), and blockchain. These reshape the traditional concept of financial inclusion services, dramatically enhancing digital capabilities and reducing costs. Specifically, the Internet facilitates data transmission, cloud storage and big data technologies expand data storage, while cloud computing and AI improve data processing and usage. Typically, financial inclusion is unsustainable as a business model, lacking a positive cost-benefit ratio. However, these technologies enable digital financial inclusion by reducing overall costs, transmitting data faster, collecting more types of data, and enriching the economics of micro-finance. This happens both online and offline, so financial institutions continue to see return on investment.

At the same time, the Chinese government is strategically focused on extensive planning for digital technology, which is speeding up updates and transformations in digital inclusive finance. For one, the industry’s development depends on comprehensive infrastructure. To this end, China has established a nationwide payment system that incorporates a variety of stakeholders. This includes licensed financial institutions (such as banks, payment and market infrastructure operators, as well as non-bank payment institutions), outsourced service providers that assist in business expansion or provide technical support, manufacturers of payment instruments or hardware equipment, as well as innovative FinTech companies. Together, they drive financial inclusion.

One of the key digital technologies in this entire process is mobile payment. Today, anywhere you go — rural or urban — in China, you will be able to pay using quick response (QR) codes. A large proportion of this market is dominated by Ant Financial, a digital financial inclusion service provider based in Hangzhou, Zhejiang Province. Its services enable users to complete daily transactions, take out loans, and much more, using only a QR code. In 2020, China recorded 123.22 billion mobile payment transactions amounting to CNY432.16 trillion, a year-on-year growth of 21.48% and 24.50%, respectively. Through integrating databases and credit information at different levels and domains, China has basically built up another major infrastructure — the Individual and Corporate Credit System, which hosts the world’s largest number of individual and institutional users, thus driving financial inclusion from the administrative and market perspectives.

In general, China has a steady regulatory climate, thus smoothly shifting from centralized regulation and services early on to the co-existence of the People’s Bank of China, China Banking and Insurance Regulatory Commission (CBIRC), and China Securities Regulatory Commission (CSRC). Furthermore, China’s regulatory authorities have long encouraged financial research and innovation conducive to inclusive finance. More importantly, the Central Government actively promotes inclusive finance in an effort to reduce financial exclusion. An example of this is the agricultural financial policies issued annually since 2004 in the No. 1 document. These aim to establish a diversified system of rural financial services with lower access thresholds, encourage rural financial institutions to provide more support to farmers, and ultimately reform the rural finance system.

In addition to reshaping financial inclusion, digital technologies also encourage numerous business model innovations, which in turn facilitate financial inclusion. One typical example of innovation is customization. In fact, the biggest difference between digital and traditional finance lies in the transformation of financial services from single static products to dynamic tailored solutions. Essentially, this means that providers design bespoke financial services and products based on customers’ individual requirements.

Download the Huawei Inclusive Finance Journal to get the latest trends and insights: 


“The only constant in life is change”, said Heraclitus. Looking ahead, there are three clear trends in China’s digital financial inclusion.

First, focusing on customer needs is key to digital financial inclusion. Ensuring that everyone has access to financial services requires tailoring services to a diverse group with complex requirements. A single service or product cannot suffice for everyone. To ensure that low-income customers have access, financial products and services need to address their unique needs and requirements.

Second, financial services need to be customizable. Digital financial inclusion emphasizes access to financial services for all and financial institutions are not required to provide full-scale services. Instead, it is more appropriate to determine the specific customer needs and offer tailored professional services. Therefore, the market needs to create space for customized digital financial services.

Third, digital financial inclusion will be closely integrated with other types of services. One example is bike-sharing, which has grown rapidly thanks to and in turn has encouraged the growth of mobile payments. Today, mobile payment has already become popular in transportation and shopping, and will likely penetrate other aspects of daily life very soon.


The discussed practices and trends signal four implications for other countries.

First, focus on developing and applying science and technology at the national strategic level; particularly, there should be a focus on FinTech and digital technologies. These will reduce the cost of digital financial services, enhance service efficiency, improve customer experience, and satisfy emerging customer needs.

Second, it is important to address long-term infrastructure in education, healthcare, transportation, utilities, energy, and communications. These will facilitate financial service outlets, payment services, and credit systems, driving digital inclusive finance.

Third, there needs to exist an inclusive and stable regulatory climate. China’s financial regulators have long required financial institutions to promote financial services and support major economic activities. Although most financial services have targeted large economic activities after 1978, there are still many policy documents encouraging financial institutions to provide services to small and micro enterprises as well as individuals.

Fourth, it is key to continue encouraging business model innovation in financial inclusion. The integration of technology and finance has already given light to many new business models, which create feasible solutions for sustainable digital financial inclusion. Apart from being guided by the government, financial institutions should also pursue this type of innovation in terms of finance systems and governance.

Continuous growth of Technology

Facing the continuous growth of technologies and innovation, we need to constantly consider the significance of financial inclusion. First of all, financial inclusion is the result of adjustments in the financial system, offering low-income groups access to financial services. Financial inclusion also signals macro economy re-balancing. Inclusive development urges financial institutions to serve the real economy and speed up technological innovation to achieve sustainable macroeconomic development. Last but not least, finance leads to a positive society. The call for financial inclusion is actually an aspiration for growth and development in the financial field amid social transformation. Beyond commercial values, financial inclusion also brings us long-term social benefits and human-centric development.

For more industry leaders’ and experts’ view, we highly recommend you to download Huawei Inclusive Finance Journal. The leading financial transformation solutions and practices are all here:

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Please pay your pending bills, KEMSA Board appeals to County Governments

The KEMSA Board also held a roundtable meeting with officials of the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU), Pharmaceutical Society of Kenya, Kenya Association of Pharmaceutical Industry (KAPI) Kenya Dental Association and the Kenya Health Care Federation (KHF).



Kenya Medical Supplies Authority (KEMSA) board has issued a passionate appeal asking several county governments to prioritise settlement of more than Kshs 3.9 Billion pending bills to the Authority.

Speaking when she addressed stakeholders in the Pharmaceutical sector and Medical Associations, KEMSA Chairperson Mary Mwadime said the settlement of the bills would help accelerate reforms at the Authority.

She said some county governments had extended much-needed support to KEMSA by prioritising the settlement of bills to keep the Authority’s cogwheels running as the organisational reforms to address systemic challenges progress.

She said the Board would undertake the reforms in strict compliance to due process and labour laws as the Board is committed to remedying challenges’ currently bedevilling the Authority.

During the latest round of engagements on Monday, the KEMSA Board and the Authority’s Acting Chief Executive Officer Edward Njoroge updated the Senate Committee on Health members led by Senator Michael Mbito. The KEMSA Board also held a roundtable meeting with officials of the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU), Pharmaceutical Society of Kenya, Kenya Association of Pharmaceutical Industry (KAPI) Kenya Dental Association and the Kenya Health Care Federation (KHF).

Last week, the KEMSA Board paid courtesy calls to the Kisumu, Kisii, Nyamira and Uasin Gishu County Governments. The Board also engaged the National Assembly Committee on Health and the Development Partners for Health in Kenya (DPH-K). The DPH-K comprises stakeholders and representatives from the World Health Organisation, Global Fund, USAID, CDC, UNAIDS, Bill & Melinda Gates Foundation, and World Bank.

At the meetings, Ms Mwadime reiterated that the Authority was complying with a court order and had not declared any roles redundant nor handed over KEMSA’s leadership to external agencies. She added that operations at the Authority are proceeding under a business-as-usual model with a business continuity plan to avoid any disruptions.

“We have assured our stakeholders that our operations are proceeding on as usual and the Board and Core Management remain firmly in place,” She said, adding that, “A dysfunctional KEMSA slows down healthcare delivery goals and is a liability to the envisaged positive national healthcare outcomes and the Board is committed to facilitating reforms to set the Authority on a recovery path. This will include structured engagements with several county governments to settle their outstanding bills amounting to more than Kshs 6 Billion,” she said.

KMPDU Secretary-General Dr Davji Bhimji speaking after the KEMSA engagement, expressed optimism that the Authority will undertake the envisaged reforms lawfully.

He said the Board had assured stakeholders and KPMDU members that due process would be followed and staff members will not be victimised.

“We have been given detailed information on the reforms and have been assured that the role of professional stakeholders in the healthcare value chain will be mainstreamed in the reform agenda. We are ready to engage with KEMSA to ensure efficient supply of drugs and other items from KEMSA stores to health facilities,” Dr Bhimji said.

Last week, KEMSA Board confirmed that operations had been sustained through the core management and staffing team. If necessary, the core KEMSA Management Team will be assisted by a multi-agency team drawn from public sector experts.

The multi-agency officers will be drawn from the Public Service Commission, State Corporations Advisory Committee (SCAC), Ministry of Health, Ministry of Public Service and Gender Affairs, Ministry of Information, Communication, Technology and Youth Affairs, Ministry of Defence, The National Treasury and the Ministry of Interior and Coordination of National Government among others.

The reforms at the Authority are part of the far-reaching recommendations outlined in several KEMSA restructuring reports, including the latest KEMSA Immediate Action Plan and Medium Term Reforms Working Committee (KIAPRWC) report. Commissioned by the Board, the KIAPRWC report revealed challenges in critical functions.

The report confirms that KEMSA is grossly underperforming and largely unable to meet clients’ urgent needs, particularly the delivery of essential Medicines and Products to the Counties, Referral Hospitals and Programs.

The Authority is suffering from below-par productivity, with the order fill rate standing at 18% against a target performance of over 90%. KEMSA’s order turn-around time is an average of 46 days.

KEMSA is also suffering from a developing debtor and creditor crisis and is currently owed Ksh. 6.4 Billion by its clients, who are primarily county governments. The Authority owes its creditors Ksh. 4.5 Billion and is operating at 170% above its approved staff establishment of three hundred and forty-one (341) with an estimated staff complement of 922. Pool

The Board, Ms Mwadime said, is committed to facilitating the necessary reforms to ensure that KEMSA challenges are sufficiently addressed. This commitment includes aligning the organisational structure to industry-accepted standards for a health commodities and technologies procurement organisation. It also calls for the introduction of global best practices, including transparent reporting relationships, an acceptable span of control, and command structures, compounding related functions for strengthened accountability and a re-determination of optimal staffing levels and norms.

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Mwananchi Credit Feted as a TopScore brand

The company was voted as the Most Timely Logbook Loan Provider in Kenya as well as recognized as a TopScore Brand in recognition of the financier’s increasing penetration in the country.




TopScore Brands awards the certificate Mwananchi’s Head of Customer Service , Ruth Moraa and trophy to HR Manager Collins Okello (Photo: Courtesy)

Mwananchi Credit has been recognized as a TopScore brand during the inaugural gala dinner held at the Hilton Hotel last Friday.

The company was voted as the Most Timely Logbook Loan Provider in Kenya as well as recognized as a TopScore Brand in recognition of the financier’s increasing penetration in the country.


The company has had an impressive winning streak this year, landing the Best Land Title based Financier at the 4th Annual Real Estate Excellence Awards as well as the Best Logbook Loan Financer during the Annual Automotive Industry Awards, both held recently.

Commenting after the win, Mwananchi Credit CEO Dennis Mombo was philosophical about it “It is not until you are on top of your game that you begin being recognized. However, as I remind my team every day, getting to the top is the easy part. It is staying on there, that calls for a big challenge. The biggest show of a winning spirit is to fight complacency so that you keep emerging the best in subsequent years. We are excited about being recognized as a Topscore Brand alongside Kenya’s other leading brands. But we are more excited about giving the best service to our clients, who are the reason we are on top!”

Mwananchi Credit is one of the most innovative lenders in the market. They have ensured that they are able to meet borrowers’ needs at various collateral levels while easing the process of access to credit.

By providing Emergency Loans, the company has put in place aggressive customer-centric processes to ensure that the timelines between application and disbursement are narrowed to an absolute minimum. This has been enabled by embracing technology such that the KYC process starts immediately upon online application and the subsequent steps are also automated whenever possible. Logbook Loans are provided within less than six hours of application with a disbursement within this Turn Around Time clocking over 98% of the instances.

Mwananchi Credit is one of the leading logbook loan providers in the country. Its diversified product portfolio includes title deed loans, civil servant salary check-off loans, import financing, and asset financing among others.

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Mwananchi ‘s interest holiday for new applicants to mark Customer Service week

Mwananchi Credit is one of the few Micro Finance companies that has managed to grow tremendously during the last year despite the Covid-19 pandemic and this has been strongly linked to improvement of their customer service desk.




Clients at Mwananchi Credit tent in a past reach out exercise.

Mwananchi Credit will this year mark the Customer Service Week due on Monday 4th till Friday 8th October, in style.

The firm has announced a gracious interest holiday to all lucky clients who make loan applications in specific class categories for the first 3 months of repayment.

This means if you make your loan application during the Customer Service week, and you are among the lucky chosen clients, your interest repayments shall click in January 2022 with only the principal reflecting in the intervening period.

Further, Mwananchi Credit has also announced a penalty waiver for all customers who come to regularize their loan accounts ( that may have fallen behind) during this week.

Announcing the goodies, Mwananchi Credit’s Marketing Manager Boniface Ndonji added,
“ Our growth over the last couple of years has been phenomenal and in big part, this has been simply due to our loyal clients.”

He noted, “As we seek to grow our Mwananchi client family, we also seek to give them have a soft landing, hence our reason to give incentives of our interest holiday.”

Further, Mr Boniface Ndonji said for their current clients who may be facing repayment difficulties, the penalty waivers will hopefully help them to get up to speed.

Mwananchi Credit is one of the few Micro Finance companies that has managed to grow tremendously during the last year despite the Covid-19 pandemic and this has been strongly linked to improvement of their customer service desk.

As they mark this year’s occasion, the company shall have a lot of other exciting range of activities to celebrate their growth with their customers.

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