Published : Saturday, April 21, 2012 00:00
Written by : MAYVELIN U. CARABALLO REPORTER
Because of poverty, cost, travel distance and amount of paper work
involved in opening a bank account, three quarters of the world's poor
do not have it, data from the World Bank (WB) showed, also indicating
that those people without access to formal banking often have to rely on
other money lenders who often charge high fees.
From a WB statement released in Washington, D.C. on Thursday (Friday in
Manila), data showed that the "unbanked" are also less likely to start
their own business or insure themselves against unexpected events.
It stated that financial inclusion, or being "banked" can be
transformative, since it allows poor people to build a more secure future.
People that have bank accounts also has the ability to save and borrow,
that allows them to build their assets, start a business, invest in
education, establish a credit rating and eventually own a home, the WB
added.
"Providing financial services to the 2.5 billion people who are
'unbanked' could boost economic growth and opportunity for the world's
poor," said World Bank Group outgoing President Robert Zoellick.
He added that harnessing the power of financial services can really help
people to pay for schooling, save for a home, or start a small business
that can provide jobs for others.
The data also showed that if more poor people are banking today, the
more they are banking on their future.
Moreover, the WB data revealed that women are particularly disadvantaged
when it comes to access to financial services. It showed that only 37
percent of women in developing countries have a bank account, while 46
percent of men do.
On the other hand, WB's Global Financial Inclusion Database, or Global
Findex, collected by Gallup Inc. using the Gallup World Poll Survey,
said that worldwide, 22 percent of adults report having saved at a
formal financial institution in the past 12 months.
Meanwhile, even among those who do have a formal bank account, only 43
percent of adults use their account to save. But 61 percent of account
holders worldwide use their account to receive payments from an
employer, the government or family members living elsewhere.
The data also said that few adults in developing countries use formal
financial products to manage risk. It showed that more than 11 percent
of adults in developing countries have an outstanding loan for
emergencies or health-care needs, but more than 80 percent of these
adults use only informal sources of credit.
It added that of adults in developing countries working in farming,
forestry or fishing, only 6 percent of them have crop, rainfall or
livestock insurance.
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