China has made great progress in expanding financial inclusion in the past ten years. Over 60% of Chinese adults have a bank account and there are over 100,000 branches in rural areas. China’s policies have enabled new financial service providers to emerge such as Microcredit Companies and Village and Township Banks. The People’ Bank of China has also promoted the development of digital finance with over 800,000 agents delivering government subsidies and providing basic payments services.

However, in 2011 there were 400 million unbanked adults, the largest unbanked population after India Over 60% of the poorest adults and 40% of rural adults do not have a formal account.  Pro-poor microfinance did not take off on a large scale in China and only a minority of MSMEs access bank loans. In addition, policymakers often have insufficient understanding of the demand side to develop optimal policies.

Looking forward, the two biggest opportunities for financial inclusion to dramatically expand are the new digital finance models, and the emergence of a national financial strategy that could improve data on demand and enhance a dialogue among regulators and providers. Beyond the banking agent model, the world’s fastest growing ecommerce market, and exponential growth of online and mobile phone based payments could boost financial inclusion.  Banks such as Alibaba, Tencent and Baidu are breaking new grounds by setting up new digital banks and F-Road is expanding usage of existing bank accounts thanks to its SIM overlay technology. 

Key Financial Inclusion Indicators
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% of adults with an account at a formal financial institution: 64%
% of adults with at least one loan outstanding from a regulated financial institution: 7%
% of SMEs with an account at a formal financial institution: 96%
% of SMEs with an outstanding loan or line of credit: 25%
% adults saved at a financial institution in the past year: 32%
% adults unbanked: 36%
number adults banked: 700 million (2011)
number adults unbanked: 400 million (2011)