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No Open Banking

Situated roughly about midway between Hawaii and Australia, Tuvalu is a cash-based economy.

49% of the population of Tuvalu had access to the internet at the beginning of 2022.

Financial inclusion in Tuvalu is facing challenges due to geographical barriers, lack of alternatives to cash transactions, and lack of branchless services. All banking services require personal visits at bank branches, making bank services time-consuming and difficult in peak times and for residents of the outer islands. All transactions are done with cash, and there are no card arrangements, imposing significant liquidity constraints on citizens. Unlike its peers, there are no ATMs in Tuvalu. The lack of data precludes assessment of financial inclusion by residents, but anecdotal evidence suggests that the share of unbanked individuals remains high.

A relatively low level of financial development has left Tuvalu with important gaps in financial depth, financial inclusion, and financial efficiency, with banks providing inadequate support for private sector-led economic growth. Fintech strategy could help fill some of these gaps. Three potential solutions could be considered: mobile money, e-money and internet banking, and cross-border payments. 

According to the International Monetary Fund (IMF), Fintech could potentially allow Pacific island countries to alleviate the impact of structural impediments and persistent challenges, such as geographic remoteness and dispersion, small scale, limited infrastructure, and fragile correspondent banking relationships. Fintech solutions can complement existing efforts to promote financial inclusion, enhance financial sector development, and increase inclusive growth potential, thereby reducing poverty.