Half the world is unbanked

A team from Financial Access Initiative has prepared this report which says half the world population does not have use banking services.

This paper builds on a dataset compiled from existing cross-country data sources on financial access and socioeconomic and demographic characteristics to generate an improved estimate of the size and nature of the global population that does and does not use formal (or semi-formal) financial services.

Our key findings are:

2.5 billion adults, just over half of world’s adult population, do not use formal financial services to save or borrow

2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East.

Of the 1.2 billion adults who use formal financial services in Africa, Asia, and the Middle East, at least two-thirds, a little more than 800 million, live on less than $5 per day.

We also found that levels of financial inclusion are not determined by socioeconomic or demographic factors alone. We found considerable variance among countries when we correlated financial services usage with national levels of per capita income and urbanization for each country. The variation in the data suggests that socioeconomic and demographic factors are not the only drivers of financial inclusion. Regulatory and  policy environments, as well as the actions of individual financial services providers, shape the financial inclusion landscape and are, to a large extent, independent of countries’ socioeconomic and demographic characteristics.

Countries including India and Thailand have far wider usage of formal financial services than would be predicted by their level of GDP or urbanization. Our findings provide empirical grounding for what many in the field already believe to be true. It is possible to serve low-income communities at scale with financial services, but there are still billions left to reach.

The India bit is interesting- India has far wider usage of formal financial services than would be predicted by their GDP/urbanisation.

A very useful report. How important this issue is. It isn’t just about India bit quite a few other regions as well. In  particularly Africa.

One Response to “Half the world is unbanked”

  1. registracija domena Says:

    Thank you for your wonderful post. Very informative and I enjoyed reading it along with your other articles. Thanks for sharing and continue the great work.

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