Complex Made Simple

Gallup & World Bank: How is the world progressing on financial inclusion?

Nearly one billion people have no form of legal ID and are unbanked. What could change that?

A digital ID can add 6% growth to an emerging economy's GDP in 2030 and 3% to an advanced economy's GDP 78% of the world’s unbanked adults receiving wages in cash have a mobile phone, and are seen as an increasingly attractive commercial market Globally, 69% of adults -- 3.8 billion people -- now have an account at a bank or with a mobile money provider

A Gallup World Poll:  The Global Findex database covers more than 140 economies around the world

The World Bank Group has two goals: to end extreme poverty and to promote shared prosperity in a sustainable way.

With 189 member countries, staff from more than 170 countries and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.

These institutions engage the development community with real-world statistics, support countries' poverty reduction strategies and provide analysis and advice for developing countries.

THE IMPACT

Sustainable Development Goal 8.10.12

Data from the Global Financial Inclusion Index are used by the United Nations in tracking progress on SDG 8.10.2.

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THE GLOBAL FINDEX IN THE MEDIA

CNN

"Nearly one billion people have no form of legal ID. Going digital could change that"

"Without legal identification, they are denied access to government aid, health care, financial services, the labour market, the ability to secure property rights and the ability to register a business," said CNN.

"The good news is that, as more of our economic, social and political activity shifts online, governments and businesses around the world are implementing digital ID — an identification that can be verified remotely over digital channels."

New research from the McKinsey Global Institute finds that when carefully designed, a digital ID can add 6% growth to an emerging economy's GDP in 2030 and 3% to an advanced economy's GDP.


Economist

"Financial Inclusion Is Making Great Strides"

"According to the Findex, 78% of the world’s unbanked adults receiving wages in cash have a mobile phone. Moreover, the “unbanked” are seen as an increasingly attractive commercial market," said The Economist. 

Firms as diverse as Ant Financial, an affiliate of Alibaba, China’s e-commerce behemoth, and PayPal, a Silicon Valley payments firm, make much of their role in expanding financial inclusion. Daniel Schulman, PayPal’s chief executive, says his company’s mission is “to democratise financial services”.

Read Open banking: Fintech competition for your financial data is on, and Bahrain is in

THE CHALLENGE

Measure How the World Saves, Borrows, Pays and Manages Risk

Bank accounts offer people a pathway out of poverty by helping them invest in education and business opportunities. They also make it easier to manage unexpected expenses — like a hospital bill or the loss of a breadwinner — that can push families into hardship.

The problem was that until a few years ago, there was no way to systematically track who had these bank accounts — or how people around the world saved their money, accessed credit and managed financial risks. Researchers and policymakers who needed this information were forced to rely on a patchwork of incompatible household surveys and aggregated central bank data.

This all changed in 2011, when the World Bank, with funding from the Bill & Melinda Gates Foundation, combined its passion and mission with Gallup's expertise in measuring global public opinion to launch what would become the world's most comprehensive data set on how adults save, borrow, make payments and manage risk — the Global Findex database.

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FINANCIAL INCLUSION: WHAT IF EVERYONE HAD ACCESS TO A BANK ACCOUNT?

As of the most recent survey in 2017, Gallup shows that 1.2 billion adults worldwide have opened a bank account since 2011, including 515 million in the past three years. Globally, 69% of adults — 3.8 billion people — now have an account at a bank or with a mobile money provider.

The 2017 edition of the database includes updated indicators on access to and use of formal and informal financial services, as well as new data on the use of financial technology (fintech).