Banking on the Unbanked

Nov 10, 2017 Reeta Roy

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.

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Mojisola Akpojiyovbi Nov 13, 2017

Poor people keep bank business going with their collective deposits but once their individual savings run out they are never able to get credit even for very short periods. First the paper work is prohibitive, the loss of dignity immense only to be told sorry bank policy does not allow the loan requested.

Yet poor deposits are loans to the bank to do its own business.
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gnakashidze Nov 10, 2017

Interesting article, thanks. Although on the other hand, the poor will start taking out loans while putting their property (farmland, houses, etc.) as collateral. For most of them, this will be a gamble and they won’t be afford to pay back. Banks repossess the properties and sell it for peanuts back to the rich... This is also something that needs to be taken into account and can be potentially mitigated with financial education.
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