April 22, 2015
Though it may not seem so living in countries such as the U.S. or U.K., providing access to financial institutions in developing countries has been a stigmatizing problem for decades. Currently, only 51% of adults worldwide have access to proper banking. What may be more surprising is that this number is far better now—four years later, the percentage is sitting at an astonishing 62%. Obviously much growth has occurred in the past few years, and this trend will only continue.
World Bank Group President Jim Yong Kim commented that, 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. This goal, while daunting, may be possible with the exponential growth that has been seen in recent years. Between 2011 and 2014 the number of unbanked consumers worldwide witnessed a 20% drop as 700 million adults joined banking systems.
Though these numbers are worthy of rejoice, there is still a long road ahead. According to Findex, in 2014, over half of the adults in the poorest 40% of developing countries still did not have any access to banking technologies. The gap between banked men and women is also not closing, and has remained at an average 7% difference—the latter being the lower percentage—in the last 4 years. This gap is much larger in South Asia, where only 37% of women are banked compared to 55% of men. The last thing the World Bank wants to do is create an even larger strata.
The increase in mobile banking and e-commerce options may be the catalyst for this needed change. Within the Sub-Saharan African region, a bit over 10% of all adults are using mobile banking options—that’s more than the percentage of adults using traditional financial institutions. Mobile banks are providing a far less restrictive option than their legacy counterparts for many citizens of developing countries.