SHIFK: Increasing financial inclusion and financial education will have a positive impact on economic development

Representatives of the World Bank (BB) and the Central Bank of the Republic of Kosovo (BQK) have expressed the need to raise the level of financial inclusion and financial education of consumers in Kosovo.

For these assessments the Kosovo Financial Innovation Association ( Sa The IFK shared the opinion with BB and BQC representatives. The topic for increasing the level of financial inclusion and financial education has been discussed in one of the panels marking the 20th anniversary of the founding of the Central Bank of Kosovo, where senior officials of the Central Banks of the countries of the region and Europe have participated, as well as various experts, in which the event has been discussed with <x0-Rerespects and possibilities in a dynamic financial sector of the region's” development road.

The SHIFK has just completed its first research on the non-bank financial sector (done by KANTAR and certified by BDO), where, as a result of this research, nonbankary financial companies are the newest “financial sector segment in Kosovo, which despite rapid growth has a non-dominate turnout of 4% of the financial market, without any systematic effect on the country's financial industry. Banks and other financial institutions still play a dominant role in the financial sector in Kosovo, where the banking sector represents 67% of the financial system market, while all other financial services, such as pension funds, insurance companies, microfinance institutions, represent 29% of this market.

According to the research conducted, 58% of respondents have enough money for food, but buying clothes and household equipment (such as TV, refrigerator) is harder, while 66% of respondents do not make savings, half of them because there is not enough money to save. About 49% of consumers have estimated their <x0) knowledge about financial education as average and not satisfactory”, while 39% have paid no attention to updated such knowledge and need additional information on this topic. Furthermore, it is clear that consumers are not fully aware of the complex formula after the effective interest rate and often make it wrong for the regular interest rate and, therefore, should be actively informed by financial industry members of financial services costs, and this should be done in a simple and friendly manner with consumers.

From this, it turns out there is a great need for the financial inclusion of citizens, so we need to positively assess the development of the non-bank financial sector and institutions in the country which complement the banking sector by providing financial involvement for consumers not previously served and at the same time fully support the World Bank's emphasis that the financial “should be encouraged and be more active in lending disadvantaged sectors and less served in order to achieve financial inclusion”

Therefore, we highly appreciate the commitment of the Central Bank of Kosovo to their great effort to ensure financial inclusion in Kosovo by creating conditions for an efficient and sustainable financial system in the country and working hard at raising the level of society's financial education in Kosovo.

We have to admit that education is a process in which all parties should be involved, so the SHIFK will also contribute to this by promoting financial education in the country's general audience.

The SHIFK will publish the industry's full research in the first week of December.

Kosovo Financial Innovation Association unites financial technology as otherwise known as “Fin-Tech” and other non-bank financial institutions operating outside the banking sector, providing financial services to Kosovo residents as credit services, licensing, payment and money transfers.