A clerk counts cash at a bank in Nantong, Jiangsu province. [Photo/Sipa]
The development of inclusive finance should pay attention to the relationship between the government and the market. Under the guidance of the government, the leading role of the market should be played to achieve the high-quality development of inclusive finance, according to a report on the development of financial inclusion in China.
Released recently by the Chinese Academy of Financial Inclusion at Renmin University of China (CAFI), the report said that for the development of inclusive finance, the government has done a lot in the construction and improvement of infrastructure such as credit information sharing system, government-backed financing guarantee institutions, policy formulation and legislation.
However, for the construction of credit information sharing system, how to play the role of the market to better serve the data demand is a common concern. Market-driven credit information systems are driven by the needs of financial institutions, so data service providers can more accurately provide the data the institutions need.
In addition, for the improvement of government-backed financing guarantee institutions, the concerns of whether core functions such as risk assessment can be handed over to specialized institutions to reduce costs, how to set guarantee coverage and guarantee rates and the challenges of financial sustainability deserve further exploration.
Based on the experience of the eight provinces and 12 regions in the pilot reform of inclusive finance, a national pilot program that began in 2015, the report suggests that the main function of the government should still be to improve the infrastructure, including the government-backed financing guarantee institutions and the credit information sharing system. In government-backed financing guarantee institutions, the government should clarify its positioning and let the market harness its strengths. It is important to maintain market dynamism in the credit information sharing system to explore new directions and contents of the system.
Tan Guoling contributed to the story.
