More than half of adults still ‘have no access to banking’

Mobile money transfer services such as M-Pesa are helping to rapidly expand and scale up access to financial services [Photo: COLLINS ODUOR/STANDARD]

More than half of adults in the world’s poorest areas still have no access to the financial system, a new World Bank report shows. The World Bank’s Global Findex report said this is despite a global increase of 11 per cent in the last three years of adults owning bank accounts.

The report said between 2011 and 2014, 700 million people became account holders at banks, other financial institutions, or mobile money service providers, and the number of “unbanked” individuals dropped 20 per cent to two billion adults

“Access to financial services can serve as a bridge out of poverty. We have set a hugely ambitious goal - universal financial access by 2020 - and now we have evidence that we’re making major progress,” said World Bank Group President Jim Yong Kim.

He added, “This effort will require many partners - credit card companies, banks, micro-credit institutions, the United Nations, foundations, and community leaders. But we can do it, and the pay-off will be millions of people lifted out of poverty.”

Between 2011 and 2014, the percentage of adults with an account increased from 51 per cent to 62 per cent, a trend driven by a 13 percentage point rise in account ownership in developing countries and the role of technology.

In particular, mobile money accounts in Sub-Saharan Africa are helping to rapidly expand and scale up access to financial services. Along with these gains, data also show big opportunities for boosting financial inclusion among women and poor people.

The 2014 Findex found there is still more work to be done to expand financial inclusion among women and the poorest households.

More than half of adults in the poorest 40 per cent of households in developing countries were still without accounts in 2014.And the gender gap in account ownership is not significantly narrowing since in 2011, 47 percent of women and 54 per cent of men had an account. Last year, 58 per cent of women had an account, compared to 65 per cent of men.

Regionally, the gender gap is largest in South Asia, where 37 per cent of women have an account compared to 55 per cent of men.

According to the Kenya Bankers Association, 15 million people in Kenya hold bank accounts while more than 70 per cent of households in Kenya (10 million) and over 50 per cent of the poor, unbanked and rural populations use the Safaricom’s M-Pesa service.