By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- The number of people worldwide having an account grew by 700 million between 2011 and 2014. 62 percent of the world’s adult population has an account; up from 51 percent in 2011, according to the latest report from Global Findex world’s most comprehensive database providers on financial inclusion.
According to the report, three (3) years ago, 2.5 billion adults were unbanked. “Today, two (2) billion adults remain without an account. This represents a 20 percent decrease,” the report disclosed.
The report says as seen in Sub-Saharan Africa, mobile money accounts can drive financial inclusion.While just one (1) percent of adults globally say they use a mobile money account and nothing else, in Sub-Saharan Africa, 12 percent of adults (64 million adults) have mobile money accounts (compared to just 2 percent worldwide); 45 percent of them have only a mobile money account.
Global Findex disclosed that there big opportunities to expand financial inclusion particularly among women and the poor.
It revealed that 58 percent of women have an account, compared to 65 percent of men. While the percentage of adults in the poorest 40 percent of households within each country without an account decreased by 17 percentage points in developing countries compared to 2011, more than half of adults in the poorest 40 percent of households in developing countries are still without accounts in 2014.
The report affirmed that government and the private sector can play a pivotal role in rapidly opening accounts and increasing financial inclusion by paying wages through digital transfers as opposed to cash.
“Shifting domestic remittances payments from cash and over-the-counter transactions into accounts presents another enormous opportunity for increasing account ownership and financial inclusion, especially in Sub-Saharan Africa. Electronic payments to an account for the sale of agricultural products can increase the security of payments and provide a first entry point into the formal financial system,” the report added.
The world’s most comprehensive database providers on financial inclusion say account ownership is the first step towards financial inclusion. It affirms that more than 65 percent of account users in developing countries report having used their accounts at least three times a month, to save, or to make or receive electronic payments directly from their account.
“Yet, 1.3 billion adults with an account in developing countries pay their trash, water, and electric bills in cash, and over half a billion adults with an account in developing countries pay school fees in cash,” the report noted.
The report further affirmed that financial inclusion also allows people to manage risks by providing a safe place to save money for emergency and giving them access to credit when needed.
“28 percent of adults —1.2 billion adults—in developing countries report they would use their savings in case of an emergency. Yet 56 percent of these adults do not save at a financial institution,” the report said.
