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."
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