22 September 2014

75% of world's poor unbanked but mobile phones revolutionising access

20 April 2012  |  8426 views  |  1 African village bank

Around three quarters of the world's poor, living on less than $2 a day, do not have a bank account but mobile phones are helping to change this, according to a report from the World Bank.

The Bank report, based on a massive Gallup poll of 150,000 people in 148 countries, shows that around half of the world's adult population - 2.5 billion people - do not have accounts at formal financial institutions. There is a huge divide between developed countries, where 89% have accounts, and developing economies, where it is just 41%.

Women are particularly disadvantaged when it comes to access to financial services. Only 37% of women in developing countries have an account, whereas 46% of men do. That gap is even bigger among those in poverty: Women living below $2 a day are 28% less likely than men to have an account.

Meanwhile, more than 11% of adults in developing countries have an outstanding loan for emergencies or health-care needs, but more than 80% of these adults use only informal sources of credit. Of adults in developing countries working in farming, forestry or fishing, just six per cent have crop, rainfall or livestock insurance.



The report says that this lack of access is not only because of poverty, but also because of the cost, travel distance, and amount of paper work involved in opening accounts.

However, these problems are increasingly being tackled with mobile phones, popular non-traditional banking tools that often do not require users to travel or set up an account at a brick-and-mortar branch.

Mobile banking services, which allows account holders to pay bills, make deposits or conduct other transactions via text messaging, has expanded to 16% of the market in Sub-Saharan Africa. Kenya, home of M-Pesa, where 68% of adults report using a mobile phone for money transactions, has seen particularly impressive growth in this market.

Robert Zoellick, president, World Bank, says: "Providing financial services to the 2.5 billion people who are 'unbanked' could boost economic growth and opportunity for the world's poor. Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others."

Read the full report here:» Download the document now 4.7 mb (PDF File)

Comments: (1)

Anthony Cossey - Fixnetix ltd - London | 26 April, 2012, 14:49

I am a little confused by this story, how can the world's poor afford a mobile phone earning less than $2 a day, then use it to pay bills that they have no money left for?

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

23 January, 2012
17 November, 2011
28 June, 2011
08 April, 2011
12 January, 2011
15 September, 2009
17 February, 2009
17 June, 2008
07 May, 2008

Related company news

 

Featured job

to £90k base, double OTE
London, UK

Find your next job