How many are unbanked? :: United Nations Development Programme

How many are unbanked?

Global access to finance

Access to financial services can be hard measure because it is difficult to define its dimensions. Simply comparing the number of bank accounts with the total number of people, for instance, will not give the right picture: some people who have access to services choose not to use them, while others have many accounts and other still use joint household accounts.

Add to this the difficulty of measuring whether the services are designed to fully meet the needs of the client, is available when he or she requires and has a reasonable cost in fees as well as transaction time and transport to the point of service—clearly, estimating financial sector inclusiveness is no easy task.

Still, several institutions have made good attempts to clarify the level of global access to financial services.

One is provided by the microcreditsummit.org/">Microcredit Summit Campaign, which is a global movement that set out with the aim to reach 100 million of the world’s poorest by 2005. They have gathered data from over 3,000 microfinance institutions (MFIs) which jointly purport to reach 113 million low-income clients around the globe. 3/4 of these clients are among the poorest in the countries they live, and most are women. The total number of clients reported has grown on average 32% annually for the past ten years. Clearly, the Campaign has made fantastic progress towards its goals (now raised to 175 million). However, at a global perspective, this is still a drop in a very large ocean and much work remains to be done.

The Consultative Group to Assist the Poor (CGAP) has tried to answer the question of inclusiveness in a slightly broader way, by looking at the combined savings and loan accounts of what they call alternative financial institutions (AFIs). This category includes MFIs but also other institutions servicing low-income clients. Adjusting for dual accounts as well as non-use by people who have access, CGAP concludes that up to 1 billion people around the world may have access to some form of basic financial services. While these results represent an impressive amount of people, the flipside of the conclusion is that AFIs may still fail to reach a full 2/3 of the unbanked population they’re created to serve.

Clearly, it may not be realistic to provide financial services to every single individual on the planet. Some of the unbanked may be too poor to have use for financial services. Others may live in areas where services simply aren’t practical to provide.

But even considering such factors, the best numbers we have available demonstrate clearly that the battle to bring financial access to as many people as possible is still a very long way from being won.