Who are the Unbanked?

WHO ARE THE UNBANKED? UNCOVERING THE FINANCIAL INCLUSION GAP Worldwide, approximately 2.5 billion people do not have a formal account at a financial institution. Access to affordable financial services is linked to overcoming poverty, reducing income disparities, and increasing economic growth. The World Bank has created the Global Findex, a new global financial inclusion database to measure the use of financial services and identify those with the greatest barriers to access. The Global Findex shows 3/4 of the world's poor do not have a bank account, not only because of poverty, but also due to costs, travel distance and paper work involved. WHY ARE PEOPLE UNBANKED? $$ 59% of adults in developing economies 77% of adults earning less than $2 a day 11% in high-income economies ►►►►► DON'T HAVE AN ACCOUNT AT A FINANCIAL INSTITUTION CCCCCCCC4CC HAAH 55% In all regions, with the exception of high income economies, borrowing from friends and family is the most commonly of borrowers in developing economies use only informal sources of credit. reported source of credit for current loans GENDER: WHO ARE THE UNBANKED? Have an account at a formal financial institution, worldwide: The Global Findex shows gaps in financial inclusion across demographics, with women, the poor, youth, and rural residents at the greatest disadvantage. MEN WOMEN 55% 47% AGE EDUCATION INCOME RESIDENCE Have a formal account, in low-income economies: WORLDWIDE MORE THAN MORE THAN 3х THOSE AGED 15-24 ARE 33% AS LIKELY AS LIKELY URBAN RURAL RESIDENTS RESIDENTS LESS LIKELY 35% 22% TERTIARY PRIMARY to have an account, and OR LESS RICHEST 20% → POOREST 20% 40% In developing economies, adults with a tertiary education are more than twice as likely to In developing economies, the richest 20 percent of adults in a country are more LESS LIKELY to have saved formally have a formal account as those than three times as likely to save in a formal financial institution as the poorest with a primary education or less. (compared to those aged 25-64). 20 percent of adults. REGIONAL DIFFERENCES IN BANKING The Global Findex reveals regional differences in financial inclusion worldwide. Have used a mobile phone to Have saved at a formal financial THHE institution in the past 12 months: Have a credit card: pay bills, send or receive money in the past 12 months: LATIN AMERICA EAST ASIA & PACIFIC & CARIBBEAN SUB-SAHARAN AFRICA 28% 19% 16% REST OF THE DEVELOPING WORLD REST OF THE DEVELOPING WORLD REST OF THE DEVELOPING WORLD 10% 5% 3% $0.0 Zero deposits and withdrawals in a typical month: SOUTH ASIA Have a formal account: Account holders use their THH94 accounts to receive wages: MIDDLE EAST & NORTH AFRICA O MEN 41% EUROPE & CENTRAL ASIA O WOMEN 25% 61% 17% (The highest gender gap, relative to other regions) REST OF THE DEVELOPING WORLD REST OF THE DEVELOPING WORLD 32% 10% Adults reporting using a mobile phone for money transactions: SUB-SAHARAN AFRICA KENYA 68% GOING MOBILE SUDAN 52% The Global Findex shows mobile banking may help historically unbanked regions gain financial access. GABON 50% ALGERIA 44% 2/3 CONGO, REP. 37% OF ADULTS worldwide without an 34% SOMALIA account cite lack of money as the obstacle to use of formal financial services. ALBANIA 31% TAJIKISTAN 29% 16% 1/3 S&? 27% In Sub-Saharan Africa, where traditional banking has been hampered by transportation and other infrastructure problems, mobile banking has expanded to 16% of the market. UGANDA OF ADULTS also blame the cost of opening and maintaining an account or the banks being too far away. ANGOLA 26% FOR MORE INFORMATION ON THE GLOBAL FINDEX TO LEARN MORE ABOUT THE BANK GROUP'S PROJECT AND TO DOWNLOAD THE DATA, WORK IN FINANCIAL INCLUSION, visit: www.worldbank.org/globalfindex please visit: www.worldbank.org/financialinclusion SOURCE: DEMIRGUC-KUNT, ASLI AND LEORA KLAPPER, 2012. “MEASURING FINANCIAL INCLUSION: THE WORLD BANK THE GLOBAL FINDEX DATABASE." WORLD BANK POLICY RESEARCH WORKING PAPER 6025. %24