By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-The World Bank Thursday advocated for policies that will help the Unbanked people of the world have access to formal financial services.

This is contained in a Statement released by the World Bank and obtained by www.investadvocateng.com.

In a new research it conducted, the World Bank reported that cost, documentation requirements and other travel distance associated with accessing a Bank Account are the reasons 2.5 billion unbanked are not using formal financial services.

According to the World Bank, Policy makers can boost the number of people using formal financial services through policies that help reduce the cost, documentation requirements, and travel distance associated with accessing a bank account.

“Policies addressing financial barriers have proven to be especially effective among the world’s 2.5 billion “unbanked,” including 75 percent of the world’s poor and those living in rural areas, according to the paper, which analyses newly released microdata as part of a large, multi-year Global Financial Inclusion data project” the Research said.

The World Bank Policy Research Working Paper analyses how 150,000 individuals in 148 countries use formal accounts. Among other things, the new data help explain why adults in countries such as India and Bangladesh use more financial services than those in countries with similar gross domestic product per capita.

“Our results can help more countries make evidence-based decisions that will ultimately remove barriers to financial inclusion, so more people can begin to save in a safer and more effective manner,” says Asli Demirguc-Kunt, the Bank’s director of development policy and chief economist of the Finance and Private Sector Network.

The Research affirmed that the new Global Findex micro-dataset, which is the largest of its kind, provides valuable details about individuals and their banking habits.

The World Bank further affirmed in the Research that the data set covers 41 indicators ranging from the use of informal savings clubs, the prevalence of formal borrowing, to the use of mobile payments. The data also include individual characteristics, such as gender, age, education, and income, as well as reasons given by the unbanked for not having an account.

“Access to microdata facilitates a more nuanced understanding of how individuals balance savings, credit, payments, and risk management,” says Leora Klapper, supervisor of the Findex database and a lead economist in the Bank’s Development Research Group. “Through the new data, policy makers, researchers and practitioners can see how all these financial behaviors fit together.” the Statement said.

The World Bank said the Global Findex data were collected by Gallup, Inc. using the Gallup World Poll Survey. The Bank’s Development Research Group is building the database with a 10-year grant from the Bill & Melinda Gates Foundation. The complete data set will be updated again in 2014 and 2017.

“The Bank’s financial inclusion portfolio totals over $3 billion, with projects in over 60 countries. It supports country action plans for financial inclusion and responsible finance, as well as increasing access to financial products and services such as credit, savings, payments, and insurance through low cost delivery mechanisms (ATM kiosks, mobile phones)” the World Bank said.