MICROCAPITAL BRIEF: World Bank Group’s “Measuring Financial Inclusion: The Global Findex Database” Indicates 2.5 Billion Do Not Have Access to Formal Banking

A recent policy research working paper released by The World Bank Group, entitled “Measuring Financial Inclusion: The Global Findex Database” indicates that three quarters of the world’s poor people, 2.5 billion, do not have access to a bank account mostly because of cost, distance and the paperwork required to set up a bank account [1][2].

Although numerous benefits flow from having a bank account such as being able to save for education, building assets, establishing a credit rating, starting a business and owning a home, those without formal banking often have to borrow money from informal lenders that charge higher interest rates and fees that do formal institutions. These costs hamper the ability of poor people to set up businesses or insure themselves against unforeseen events.

“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said former World Bank Group President Robert B Zoellick. “This new report on the world’s ‘unbanked’ makes the case: the more poor people are banking today, the more they are banking on their future [1].”

By Amira Berrada, Research Associate

About the World Bank Group: The World Bank Group, headquartered in Washington, DC, consists of five closely associated institutions owned by its member countries that carry ultimate decision-making power. The Group’s mission is to improve living standards for people in the developing world. The World Bank Group encompasses the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); the International Centre for Settlement of Investment Disputes (ICSID) and the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Sources and Additional Resources: [1]http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23172927~pagePK:34370~piPK:34424~theSitePK:4607,00.html

[2] http://econ.worldbank.org/external/default/main?pagePK=64165259&theSiteP…

MicroCapital.org story, April 27, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Disclosure Regimes for Responsible Financial Inclusion; The Thailand Village and Urban Revolving Fund; “Microsavings Work Much Better” https://www.microcapital.org/microfinance-publication-round-up-disclosure…

MicroCapital.org story, November 3, 2011, “MICROCAPITAL BRIEF: Alliance for Financial Inclusion’s Global Policy Forum Concludes with Signing of Maya Declaration on Financial Inclusion” https://www.microcapital.org/microcapital-brief-alliance-for-financial-in…

MicroCapital Universe Profile for the World Bank Group: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

Similar Posts:

Amira joined MicroCapital while working at Export Development Canada (EDC) as a Credit Insurance Underwriter. Amira holds a Bachelor degree in International Business and Finance from Concordia University in Montreal. While completing her bachelor degree, Amira spent a semester in France and upon graduation, three months in India working with non-governmental agencies, political and spiritual groups for various socioeconomic initiatives such as the advancement of women. While travelling to different cities and rural areas in India, Amira was touched by the poverty she witnessed and was dedicated to finding a way to intertwine her business interests with her passion for development. She hopes this internship in microfinance will provide the framework to integrate an element of development into her professional career as well as positively contribute to the field of microfinance. Amira speaks English, French, and Spanish fluently and has conversational knowledge in Portuguese and Arabic. In her spare time, she enjoys reading, trying new restaurants such as molecular gastronomy, restaurants made out of ice and Nicaraguan meals wrapped in banana leaves. Most of all, she loves to travel with loved ones.