Digital payments have served as a key driver of expanding access to financial services to hundreds of millions globally, helping to launch businesses, create jobs, and fuel economic growth. Boosting financial inclusion has been a long-standing priority for Georgia, but gaps remain despite the country’s substantial efforts. Having access to transaction accounts (from banks and other types of payment service providers) is a prerequisite for the use of digital payments. The World Bank’s Global Findex 2021 shows that transaction account ownership in Georgia has doubled over the past decade to reach 70.5% in 2021, and close to 62% of the adult population has sent or received digital payments. However, low levels of financial literacy and limited access to financial products, such as savings accounts, are still widespread among poorer households and micro and small merchants, especially in rural areas. Further, the 2019 Enterprise Survey reported that access to finance remains one of the biggest obstacles for firms.
Addressing these gaps will necessitate building public trust and developing the digital payments ecosystem—making payment systems more efficient, affordable, and ubiquitous. That will only be achieved by establishing a supportive regulatory environment and adopting new fintech technologies that serve the needs of all, including businesses, customers, and payment system providers.
Bolstering the Regulatory Environment
The World Bank, with financial support from the European Union, carried out several assessments and technical assistance activities in the context of the Georgia Financial Inclusion and Accountability Project. This included comprehensive assessments of the financial inclusion, financial consumer protection, retail payments, electronic payment acceptance, and fintech landscapes. These assessments sought to support Georgian authorities with analysis and policy recommendations to solidify the foundations for improving financial inclusion in the face of greater financial sector sophistication.
Utilizing the collected data, analysis and related technical assistance activities, the National Bank of Georgia (NBG) identified gaps and initiated several reforms to improve the regulatory environment for fintech and digital payment solutions.