Principal: Global Financial Inclusion Hits A Plateau In 2025 Amid Rising Uncertainty
KUALA LUMPUR, Oct 21 (Bernama) -- Global progress on financial inclusion has plateaued in 2025 after steady gains in recent years, according to the latest Global Financial Inclusion Index released by Principal Financial Group.
The report, now in its fourth year and produced in collaboration with the Centre for Economics and Business Research (Cebr), found that shifting trade dynamics and geopolitical tensions have led companies to scale back financial support initiatives such as flexible pay and employee benefits.
In response, governments and financial systems have intensified efforts to sustain inclusion, according to the group in a statement.
The Index evaluates how governments, financial systems and employers enable greater levels of financial inclusion across 42 markets, ranking them both comparatively and by absolute score. Singapore has retained its position as the world’s most financially inclusive market since the Index’s inception.
The report recorded a global financial inclusion score of 49.4 out of 100—a slight dip of 0.2 points from 2024, though significantly higher than 41.7 in 2022. Of the 42 markets assessed, 20 showed improvement, while 19 saw declines.
Employer support slowed globally, with scores falling 0.6 points and 83 per cent of markets reporting declines. This reflects the impact of geopolitical risks on business confidence, prompting firms to adopt more conservative approaches toward employee benefits.
Conversely, government support rose by 0.6 points, increasing in all major regions. Financial systems in North America, Europe and the Middle East also strengthened, with 35 markets showing year-over-year gains in one or both pillars.
Modelling within the Index shows that a one per cent rise in financial literacy corresponds with a 2.8 per cent reduction in household loan defaults and a 6.7 per cent drop in debt-to-income ratios, contributing to long-term gross domestic product (GDP) growth.
Markets that have advanced digital financial infrastructure, including Argentina, South Korea, Brazil, Thailand and Singapore, recorded the most significant inclusion gains.
The Middle East experienced the sharpest improvement in the financial system pillar, driven by fintech adoption. The United Arab Emirates rose five positions and 3.9 points, while Saudi Arabia advanced four spots and 1.8 points.
In the United States, financial inclusion edged higher, maintaining its global ranking at seventh. Gains were supported by improvements in fintech presence, credit access and borrower protections, though economic headwinds and reduced small-business funding limited stronger progress.
-- BERNAMA
