Who are these ‘unbanked’ populations? Where do they live? How do they survive? And what lessons do these estimates hold for policymakers working to improve levels of financial inclusion for poor populations?
The key findings of this study, executed by the Financial Access Initiative (FAI) in October 2009, show the following astounding numbers:
• 2.5 billion adults, just over half of world’s adult population, do not use formal financial services to save or borrow;
• 2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East;
• Of the 1.2 billion adults who use formal financial services in Africa, Asia, and the Middle East, at least two-thirds, a little more than 800 million, live on less than $5 per day.
The study also shows that levels of financial inclusion are not determined by socioeconomic or demographic factors alone. FAI finds considerable variance among countries when they correlated financial services usage with national levels of per capita income and urbanization for each country. The variation in the data suggests that socioeconomic and demographic factors are not the only drivers of financial inclusion. Regulatory and policy environments, as well as the actions of individual financial services providers, shape the financial inclusion landscape and are, to a large extent, independent of countries’ socioeconomic and demographic characteristics.
Countries including India and Thailand have far wider usage of formal financial services than would be predicted by their level of GDP or urbanization. FAI's findings provide empirical grounding for what many in the field already believe to be true. It is possible to serve low-income communities at scale with financial services, but there are still billions left to reach.