Three quarters of world's poor are 'unbanked'- study
Three quarters of the world's poor, living on less than $2 a day,
have no bank account, further driving the vicious cycle of poverty, the
World Bank said in a report Thursday.
The lack of bank access stemmed not only from poverty itself, but
also because of the cost, travel distance, and the paperwork involved in
having a bank account, the report said.
"Those without access to formal banking often have to rely on money
lenders who often charge high fees. The 'unbanked' are also less likely
to start their own business or insure themselves against unexpected
events," it said.
According to the bank, 2.5 billion people are without access to
formal banking.
World Bank president Robert Zoellick highlighted that linking the
poor to banks could boost economic growth and opportunity.
"Harnessing the power of financial services can really help people to
pay for schooling, save for a home, or start a small business that can
provide jobs for others," Zoellick said in a statement.
"This new report on the world's 'unbanked' makes the case: the more
poor people are banking today, the more they are banking on their
future." The findings were based on a survey of 150,000 people in 148
countries conducted by the US pollster Gallup.
The information is being gathered for a financial inclusion database
being built by the World Bank with a 10-year grant from the Bill &
Melinda Gates Foundation.
The survey found that in developing countries, polling adults at all
income levels, only 37 percent of women had bank accounts, compared with
46 percent for men.
More than 80 percent said they used informal sources of credit, such
as an account with a business or a loan from a friend.
"Even among those who do have a formal bank account, only 43 percent
of adults use their account to save. Yet 61 percent of account holders
worldwide use their account to receive payments from an employer, the
government or family members living elsewhere," the World Bank said.
The research confirmed the rising popularity of using mobile phones
to transfer money, banking that often does not require setting up an
account at a brick-and-mortar bank.
"Mobile banking, which allows account holders to pay bills, make
deposits or conduct other transactions via text messaging, has expanded
to 16 percent of the market in Sub-Saharan Africa, where traditional
banking has been hampered by transportation and other infrastructure
problems," the Washington-based develoment lender said.
AFP |