A recent policy research working paper released by The World Bank Group, entitled “Measuring Financial Inclusion: The Global Findex Database” indicates that three quarters of the world’s poor people, 2.5 billion, do not have access to a bank account mostly because of cost, distance and the paperwork required to set up a bank account [1][2].
Although numerous benefits flow from having a bank account such as being able to save for education, building assets, establishing a credit rating, starting a business and owning a home, those without formal banking often have to borrow money from informal lenders that charge higher interest rates and fees that do formal institutions. These costs hamper the ability of poor people to set up businesses or insure themselves against unforeseen events.
“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said former World Bank Group President Robert B Zoellick. “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 [1].”
By Amira Berrada, Research Associate
About the World Bank Group: The World Bank Group, headquartered in Washington, DC, consists of five closely associated institutions owned by its member countries that carry ultimate decision-making power. The Group’s mission is to improve living standards for people in the developing world. The World Bank Group encompasses the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); the International Centre for Settlement of Investment Disputes (ICSID) and the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).
Sources and Additional Resources: [1]http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23172927~pagePK:34370~piPK:34424~theSitePK:4607,00.html
[2] http://econ.worldbank.org/external/default/main?pagePK=64165259&theSiteP…
MicroCapital.org story, April 27, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Disclosure Regimes for Responsible Financial Inclusion; The Thailand Village and Urban Revolving Fund; “Microsavings Work Much Better” https://www.microcapital.org/microfinance-publication-round-up-disclosure…
MicroCapital.org story, November 3, 2011, “MICROCAPITAL BRIEF: Alliance for Financial Inclusion’s Global Policy Forum Concludes with Signing of Maya Declaration on Financial Inclusion” https://www.microcapital.org/microcapital-brief-alliance-for-financial-in…
MicroCapital Universe Profile for the World Bank Group: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The…
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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