Half the World is Unbanked

This paper generates an estimate of the size and nature of the global population that does and does not use formal or semi-formal financial services. It uses existing cross-country data on financial access and socioeconomic and demographic characteristics.The study analyzes levels of usage for people living above and below USD $5 per day and correlations between levels of income, urbanization and financial services use. It finds that:

• 2.5 billion adults, just over half of worlds adult population, do not use formal financial services;
• 2.2 billion of this population lives in Africa, Asia, Latin America and the Middle East;
• Of the 1.2 billion adults who use formal financial services in these regions, at least two-thirds live on less than $5 per day;
• Financial inclusion levels are not determined by socioeconomic or demographic factors alone;
• Regulatory and policy environments, as well as the actions of individual financial services providers, shape the financial inclusion landscape.

The study findings provide empirical grounding for the belief that it is possible to serve low-income communities at scale with financial services. There are, however, billions of people yet to be reached.