Aiding the Digital Revolution in Global Financial Inclusion
Expanding people’s access to finance, reducing the cost of digital transactions, and channeling wage payments and social transfers through financial accounts will be vital to mitigating recent economic setbacks in developing countries. Governments and the private sector can help further this transformation in several ways.
WASHINGTON, DC – Around the world, high inflation, slow economic growth, and food shortages are hurting the poor the most. Coming on top of the unequal effects of the COVID-19 pandemic, today’s multiple crises have already caused dramatic reversals in development and led to a substantial increase in global poverty.
On the positive side, the COVID-19 crisis spurred unprecedented change, especially in industries with a large digital component. This digital revolution has catalyzed increases in access to and use of financial services in developing economies, transforming how people make and receive payments, borrow, and save.
These changes are strikingly evident in the latest edition of the Global Findex database, compiled from a survey of more than 125,000 adults in 123 economies, covering use of financial services throughout 2021. The survey found that 71% of adults in developing economies now have a formal financial account – whether with a bank, another regulated institution such as a credit union or microfinance lender, or a mobile money service provider – compared to 42% when the first edition of the database was published a decade ago. In addition, the difference in the share of men and women in developing economies who own an account has fallen for the first time, from nine percentage points to six.