The World Bank released the third edition of its Global Findex Database. The previous two editions were in 2011 and 2014. It provides a sneak peek into the world of adults of 140 economies, including both those with accounts and those without. There’s a wide body of research that points to the crucial role of financial inclusion towards reducing poverty, hunger and gender inequalities. The report shows that since its last edition in 2014, 515 million adults across the world have gained access to financial tools. Yet, 1.7 billion adults still lack a bank account.
Chart 1 shows that nearly half of all unbanked adults live in just seven economies. India has the dubious distinction of having 11 per cent of the world’s unbanked. Chart 2 shows regardless of the country of origin, most unbanked adults are women. Chart 3 shows that almost half the unbanked adults are out of the labour force. The problem of inadequate financial inclusion is more prominent in the developing world but, as Chart 4 shows, there are no clear trends among these countries. Account ownership has grown in many countries (such as India, Bangladesh) and fallen in others (such as Mexico, South Africa).
Among other disaggregated data, the report shows how financial inclusion differs with poverty, gender and age. Chart 5 shows that developing countries report large gaps in account ownership between rich and poor adults. These gaps are larger in countries (such as Egypt) where overall account ownership levels are lower than countries (such as India) where the overall level is relatively high. Chart 6 shows that the size of gender gaps in account ownership across countries also varies substantially. It is noteworthy that the relatively small size of gender gap (6 percentage points) in India’s case is a very recent occurrence. In 2014, this gender gap was 20 percentage points. However, the story of wide variations continues in Chart 7, which maps the gap in account ownership between young and old adults.
StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines. Compiled by BS Research Bureau