The development of inclusive finance must move beyond expanding coverage to improving service quality and effectiveness, with greater coordination among stakeholders and a stronger focus on fundamental financial health, industry experts said.

At a two-day forum which concluded in Beijing on Wednesday, Bei Duoguang, founding president of the Chinese Academy of Financial Inclusion at Renmin University of China, said financial institutions must pay closer attention to the financial health of the individuals and businesses they serve as inclusive finance expands its reach.

Over the past decade, inclusive finance initiatives worldwide have largely focused on expanding access and coverage. But alongside efforts to broaden outreach, greater emphasis should be placed on measuring the actual impact of financial services on those using them, Bei said.

"An important question is whether inclusive finance has genuinely improved the operational efficiency of micro and small businesses, strengthened their risk resilience and financial resilience, and generated tangible benefits in terms of output, income and employment. These are key indicators of its effectiveness and lie at the heart of financial health," he said.

ALSO READ: Inclusive finance eases way for cross-border payments

Financial health provides a comprehensive measure of a business' ability to withstand financial shocks. It assesses whether enterprises can effectively manage day-to-day cash flow issues, cope with unexpected financial pressure, prepare for future needs, and maintain control over and confidence in their financial circumstances.

The Chinese Academy of Financial Inclusion released its 2025 Financial Health Report on Micro and Small Businesses on Tuesday. Based on a survey of 2,766 micro and small businesses nationwide, the report calls for government authorities and financial regulators to establish a tiered support matrix that tailors financial assistance to enterprises' financial health.

It recommended incorporating a financial health index for micro and small businesses into the monitoring framework for inclusive finance, while directing policy-backed guarantees, interest subsidies and other forms of support toward financially healthy businesses that have yet to secure bank loans.

At the regional level, the Taizhou Branch of the People's Bank of China issued guidelines in June on promoting financial health among micro and small businesses.

The initiative targets key industrial clusters in Taizhou, Zhejiang province — including machine tools, mold manufacturing, and automotive and motorcycle components. It aims to establish regular monitoring of the financial health of local micro and small businesses while encouraging lenders to improve their products and services, refine customer acquisition strategies and incorporate financial health considerations into risk management throughout the lending process.

READ MORE: China issues guidelines to promote inclusive finance

Ye Bin, deputy head of the PBOC's Taizhou branch, said financial health adopts a demand-side perspective, measuring whether financial services have improved the operational resilience of micro and small businesses. This approach makes the evaluation of inclusive finance more responsive to the needs of businesses and better reflects their actual experiences.

Jin Xiaolong, senior vice-president of Ant Group and chairman of MYbank, said financial institutions should focus on providing responsible financial products and ensuring reasonable pricing, with returns sufficient to cover risks and support sustainable operations without pursuing excessive profits.

They should also adopt prudent risk management practices, including a more measured and considerate approach to debt collection, while exercising restraint in marketing to ensure that suitable products are offered to the appropriate customers. In addition, financial institutions should step up efforts to raise awareness of financial health among clients, Jin said.

Li Junfeng, former director of the Inclusive Finance Department at the former China Banking and Insurance Regulatory Commission, said financial regulators should incorporate indicators measuring financial institutions' efforts to promote financial health into their supervisory assessment frameworks.

Li also stressed that improving financial health requires coordinated efforts across society, with third-party organizations playing an important role. He called for the development of a tiered financial health indicator system to facilitate regular assessments and monitoring of the country's overall financial health.

Bei of CAFI said inclusive finance must balance commercial sustainability with social impact, noting that banks serving rural communities, agriculture, disadvantaged groups and flexible workers shoulder significant social responsibilities.

He called for formally recognizing a distinct category of financial institutions with dual commercial and social objectives, whose performance should be measured not only by profitability, but also by their contributions to society.

Contact the writer at jiangxueqing@chinadaily.com.cn