What you need to know:
Drop. The number of unbanked individuals dropped by 20 per cent
A new World Bank report shows that the number of people without bank accounts has dropped globally.
The report titled Global Findex released in Washington DC last week, shows that the number of “unbanked” individuals dropped by 20 per cent. This represents 2 billion adults globally.
The World Bank on state of financial inclusion reveals that between 2011 and 2014, 700 million people became account holders at banks, other financial institutions, or mobile money service providers around the world; a development which shows more people getting access to financial services.
World Bank Group President Jim Yong Kim said: “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.”
Mr Kim added: “This effort will require many partners – credit card companies, banks, microcredit institutions, the United Nations, foundations, and community leaders. But we can do it, and the payoff will be millions of people lifted out of poverty.”
In 2011, the World Bank– with funding from the Bill & Melinda Gates Foundation and in partnership with Gallup, Inc. – launched the Global Findex in more than 140 countries including Uganda, to study how adults save, borrow, make payments, and manage risk.
The report says between 2011 and 2014, the percentage of adults with an account increased from 51 per cent to 62 per cent, indicating a rise in account ownership in developing countries.
Mobile money accounts in Sub-Saharan Africa are rapidly scaling up access to financial services. In Sub-Saharan Africa, mobile technology has the potential to vastly expand financial inclusion.
About 34 per cent of adults have an account, up from 24 per cent in 2011.
More people in East Africa have mobile accounts.
“Kenya leads with mobile money account ownership at 58 per cent, while Tanzania and Uganda have rates of about 35 per cent. 13 countries in the region have mobile money account penetration of 10 per cent or more,” says the report.
The report adds: “In Cote d’Ivoire, Somalia, Tanzania, Uganda, and Zimbabwe, more adults have a mobile money account than an account at a financial institution. In Kenya more than half of adults who pay utility bills use a mobile phone to do so.”
Mobile accounts up
12 per cent of adults in East Africa have a mobile money account compared to just 2 per cent globally.