While the poor need to be financially savvy to manage uneven and unpredictable income and expenses, this doesn’t necessarily translate into the capability to make informed decisions about the full array of financial products. Many are illiterate or innumerate, giving rise to significant consumer protection challenges especially in emerging but also in advanced economies.
Again, central banks and other financial regulators and policy makers, have very critical roles to play to ensure that sound market practices are accompanied by robust consumer protection and financial education. It is vital that we encourage responsible financial inclusion. Furthermore, to understand these fast moving developments and adopt the right policies to address financial exclusion, we need more and better data.