Global Financial Development Report 2014: Financial Inclusion

This report provides a review and synthesis of recent and ongoing research on financial inclusion, identifying which policies work, and which do not, as well as areas where more evidence is still needed. It introduces new data and research and draws on available insights and experience to contribute to the policy discussion.

The report states that the level of financial inclusion varies widely around the world. Globally, about 50% of adults have a bank account, while the rest remain unbanked without an account with a formal financial institution. Other findings include:

• Considerable evidence indicates that the poor benefit enormously from basic payments, savings, and insurance services.
• For firms, particularly the small and young ones that are subject to greater constraints, access to finance is associated with innovation, job creation, and growth.
• Efforts to subsidize all financial services are counterproductive and, in the case of credit, can lead to overindebtedness and financial instability
• Focus of public policy should be on addressing market failures by creating the associated legal and regulatory framework, supporting the information environment, and educating and protecting consumers;
• Innovations in technology make it easier and less expensive for people to use financial services, while increasing financial security.