New, Individual-Level Data on Financial Inclusion: The “Unbanked” Are Deterred by Cost, Documentation, and Travel Requirements
Friday, December 14, 2012
WASHINGTON, December 13, 2012 – 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, says a new World Bank research paper.
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 analyzes newly released microdata as part of a large, multi-year Global Financial Inclusion data project.
The World Bank Policy Research Working Paper analyzes 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.