Financial Inclusion and Financial Literacy in Kazakhstan

We examine the current situation concerning financial inclusion and financial literacy in Kazakhstan and future prospects. Since 2000, the financial sector has been developing rapidly, driven by petrodollars, which has led to higher financial inclusion. However, the improvement in financial inclusion has not been distributed evenly, most notably between urban and rural populations. Financial literacy has not caught up with the development of financial services and this has led to insolvencies and banking crises. Since gaining independence in 1991, Kazakhstan has not had any systematic and wide-scale financial inclusion strategy or policy. We discuss key barriers to financial inclusion and suggest possible ways to overcome these, which could become the basis for a national financial inclusion strategy.

WORKING PAPER NO: 876