Leveraging Digital Financial Solutions to Promote Formal Business Participation
This paper explores economic informality and how it relates to digital financial inclusion. It focuses specifically on the potential role that digital financial services–including those accessed through mobile phones and the internet can play in encouraging businesses to formalize their operations. The data show wide variations in the extent of informality as well as the financial inclusion of informal business owners. The paper finds that digital financial services can make it easier for informal firms to register and operate as a formal business, while also creating synergies between individual reform efforts. For example, companies that use a digital payroll system can easily make pension contributions when online platforms are available. Digital financial transactions also make it easier for governments to enforce laws and regulations, including tax collection. However, there are several important caveats. It is not clear that formalizing small transactions is an effective way to increase tax collection. As the digital economy grows and countries seek to curb informality, policymakers should tailor their programs to the needs and realities of different groups of enterprises.
Main Authors: | , , |
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Format: | Working Paper biblioteca |
Language: | English |
Published: |
World Bank, Washington, DC
2019
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Subjects: | FINANCIAL LITERACY, DIGITAL BANKING, FINANCIAL INCLUSION, BUSINESS FORMALIZATION, INFORMAL ECONOMY, MOBILE MONEY, MICROFINANCE, TAXATION, BUSINESS REGISTRATION, ELECTRONIC PAYROLL, |
Online Access: | http://documents.worldbank.org/curated/en/486541556177550649/Leveraging-Digital-Financial-Solutions-to-Promote-Formal-Business-Participation https://hdl.handle.net/10986/31654 |
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dig-okr-10986316542024-08-07T19:10:35Z Leveraging Digital Financial Solutions to Promote Formal Business Participation Miller, Margaret Klapper, Leora Hess, Jake FINANCIAL LITERACY DIGITAL BANKING FINANCIAL INCLUSION BUSINESS FORMALIZATION INFORMAL ECONOMY MOBILE MONEY MICROFINANCE TAXATION BUSINESS REGISTRATION ELECTRONIC PAYROLL This paper explores economic informality and how it relates to digital financial inclusion. It focuses specifically on the potential role that digital financial services–including those accessed through mobile phones and the internet can play in encouraging businesses to formalize their operations. The data show wide variations in the extent of informality as well as the financial inclusion of informal business owners. The paper finds that digital financial services can make it easier for informal firms to register and operate as a formal business, while also creating synergies between individual reform efforts. For example, companies that use a digital payroll system can easily make pension contributions when online platforms are available. Digital financial transactions also make it easier for governments to enforce laws and regulations, including tax collection. However, there are several important caveats. It is not clear that formalizing small transactions is an effective way to increase tax collection. As the digital economy grows and countries seek to curb informality, policymakers should tailor their programs to the needs and realities of different groups of enterprises. 2019-05-07T20:53:57Z 2019-05-07T20:53:57Z 2019 Working Paper Document de travail Documento de trabajo http://documents.worldbank.org/curated/en/486541556177550649/Leveraging-Digital-Financial-Solutions-to-Promote-Formal-Business-Participation https://hdl.handle.net/10986/31654 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank application/pdf World Bank, Washington, DC |
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America del Norte |
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Biblioteca del Banco Mundial |
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English |
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FINANCIAL LITERACY DIGITAL BANKING FINANCIAL INCLUSION BUSINESS FORMALIZATION INFORMAL ECONOMY MOBILE MONEY MICROFINANCE TAXATION BUSINESS REGISTRATION ELECTRONIC PAYROLL FINANCIAL LITERACY DIGITAL BANKING FINANCIAL INCLUSION BUSINESS FORMALIZATION INFORMAL ECONOMY MOBILE MONEY MICROFINANCE TAXATION BUSINESS REGISTRATION ELECTRONIC PAYROLL |
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FINANCIAL LITERACY DIGITAL BANKING FINANCIAL INCLUSION BUSINESS FORMALIZATION INFORMAL ECONOMY MOBILE MONEY MICROFINANCE TAXATION BUSINESS REGISTRATION ELECTRONIC PAYROLL FINANCIAL LITERACY DIGITAL BANKING FINANCIAL INCLUSION BUSINESS FORMALIZATION INFORMAL ECONOMY MOBILE MONEY MICROFINANCE TAXATION BUSINESS REGISTRATION ELECTRONIC PAYROLL Miller, Margaret Klapper, Leora Hess, Jake Leveraging Digital Financial Solutions to Promote Formal Business Participation |
description |
This paper explores economic informality
and how it relates to digital financial inclusion. It
focuses specifically on the potential role that digital
financial services–including those accessed through mobile
phones and the internet can play in encouraging businesses
to formalize their operations. The data show wide variations
in the extent of informality as well as the financial
inclusion of informal business owners. The paper finds that
digital financial services can make it easier for informal
firms to register and operate as a formal business, while
also creating synergies between individual reform efforts.
For example, companies that use a digital payroll system can
easily make pension contributions when online platforms are
available. Digital financial transactions also make it
easier for governments to enforce laws and regulations,
including tax collection. However, there are several
important caveats. It is not clear that formalizing small
transactions is an effective way to increase tax collection.
As the digital economy grows and countries seek to curb
informality, policymakers should tailor their programs to
the needs and realities of different groups of enterprises. |
format |
Working Paper |
topic_facet |
FINANCIAL LITERACY DIGITAL BANKING FINANCIAL INCLUSION BUSINESS FORMALIZATION INFORMAL ECONOMY MOBILE MONEY MICROFINANCE TAXATION BUSINESS REGISTRATION ELECTRONIC PAYROLL |
author |
Miller, Margaret Klapper, Leora Hess, Jake |
author_facet |
Miller, Margaret Klapper, Leora Hess, Jake |
author_sort |
Miller, Margaret |
title |
Leveraging Digital Financial Solutions to Promote Formal Business Participation |
title_short |
Leveraging Digital Financial Solutions to Promote Formal Business Participation |
title_full |
Leveraging Digital Financial Solutions to Promote Formal Business Participation |
title_fullStr |
Leveraging Digital Financial Solutions to Promote Formal Business Participation |
title_full_unstemmed |
Leveraging Digital Financial Solutions to Promote Formal Business Participation |
title_sort |
leveraging digital financial solutions to promote formal business participation |
publisher |
World Bank, Washington, DC |
publishDate |
2019 |
url |
http://documents.worldbank.org/curated/en/486541556177550649/Leveraging-Digital-Financial-Solutions-to-Promote-Formal-Business-Participation https://hdl.handle.net/10986/31654 |
work_keys_str_mv |
AT millermargaret leveragingdigitalfinancialsolutionstopromoteformalbusinessparticipation AT klapperleora leveragingdigitalfinancialsolutionstopromoteformalbusinessparticipation AT hessjake leveragingdigitalfinancialsolutionstopromoteformalbusinessparticipation |
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1807155277284245504 |