Banking on the Unbanked
Despite significant gains in financial inclusion, a quarter of the planet still lacks a bank account or easy access to one. With bank accounts, budding entrepreneurs can establish their creditworthiness and tap responsible, formal lenders, enabling small enterprises to grow and create urgently needed employment, especially for young people.
TORONTO – In a sea of gloomy news, one bright headline appears on the horizon. The World Bank’s latest figures on individuals’ bank accounts, to be released next spring, are expected to show that the number of people holding accounts at banks or other formal financial institutions has grown.
The last time the World Bank published its Global Findex report, in April 2015, an estimated 700 million adults, mainly in developing countries, had obtained access to financial services during the previous three years. That amounted to an increase of more than 21% in the global number of “banked” individuals. Because broader access to financial services helps to create a path out of poverty, any increase in this metric is a positive sign for human development.
But my organization won’t be declaring victory when the new report comes out. No matter what the World Bank data show, universal financial inclusion for the world’s poorest remains a distant goal.