A slowed rate of economic growth results from the growing number of unbanked people in certain areas, which in turn exacerbates the poverty headcount ratio.
Large numbers of unbanked people who do not yet have access to financial services present a major obstacle to Africa’s financial inclusion efforts.
According to the World Bank, nearly 1.6 billion adults lack access to banking; they are not covered against theft or other financial losses, and they have never been exposed to financial goods such as loans, mortgages, or insurance.
A slowed rate of economic growth results from the growing number of unbanked people in certain areas, which in turn exacerbates the poverty headcount ratio.
Poor individuals also make up a disproportionate amount of the unbanked, per the World Bank research. The poorest 40% of households in each economy account for half of the unbanked adult population worldwide, while the richest 60% make up the other half.
Global Finance provided this table, which lists the top 10 nations where the greatest proportion of citizens lack access to bank services or comparable financial products.
Place/Country: Millions of People Without Bank Accounts
Morocco 36.9 71, Vietnam 97.3 69, and Egypt 102.3 67
Philippines: 109.6 66; Mexico: 128.9 63; Nigeria: 206.1 60
33 57 Peru; 8 50.9 54 Colombia
10 Argentina 45.21; 9 Indonesia 273.55.11; 10
The areas with the biggest bases globally include.
Across the globe, developing or emerging economies comprise the biggest base of financial excluded individuals, with the Middle East and Africa accounting for 50% of this group. Following at 38% are South and Central America, Eastern Europe, and the former Soviet republics; Asia Pacific accounts for 24% of the total.
Adopting more accessible banking, savings, and lending products may increase GDP by as much as 14% in large growing nations like India and up to 30% in frontier economies like Kenya and other African nations, according to consultancy firm EY Global.
The expansion of inclusive finance has been connected to the widespread use of fintech products in Sub-Saharan Africa, including lending platforms, investment apps, and payment gateways.
Financial inclusion’s increasing Fintech tools, including loan platforms, investment apps, and payment gateways, are widely used in Sub-Saharan Africa. These solutions will help close the gaps by making their way into unbanked areas.
By promoting entrepreneurship and small enterprises in rural areas, the implementation of fintech solutions in unbanked areas would also let certain unbanked people obtain digital banking services without the need to physically visit a banking facility.
Data on financially included Nigerians increased from 56% in 2020 to 64% in 2023, according to a 2023 Access to Finance (A2F) survey carried out by Enhancing Financial Innovation & Access (EFInA). This suggests a notable advancement as the nation aims to lower levels of financial exclusion to 25% by 2024.
