A few weeks ago the World Bank released the triennial Global Findex Database for 2017. We covered the release on Lend Academy touting the progress the world has made towards more financial inclusion, particularly in developing countries. Now, the Center for Financial Inclusion, part of Accion, have released a follow up report digging into the Findex data and the picture is less rosy than what was highlighted in the World Bank’s initial report.
On the surface it looks like the world is making good progress towards financial inclusion with the Findex report showing that 68% of adults globally having some kind of bank account versus 61% in 2014 and 51% in 2011. That is rapid progress.
But CFI found a different story when just focusing on active accounts, those accounts that had some kind of transaction in the past 12 months. This takes the percentage down to 55% and what is worse the gap is widening between total accounts and active accounts indicating a growing number of people who open an account but never use it. This is true for both developing and high income countries but the gap is getting much wider in developing countries as shown in the graphic below.
For true financial inclusion to materialize we need to focus on account usage not just total accounts, that much is clear. But there are hundreds of millions of people now with inactive accounts. From the report: [Read more…]