Mobile money a ‘bright spot’ for billions lacking bank accounts


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Half of the world’s population does not have a bank account, with many people saying they make too little money to bother with the cost or hassle of opening one, a new Gallup survey from the World Bank found. Instead, many turn to cheaper alternatives to save or transfer money, including their cellphones.

Banking can help people save, open up access to credit and make it easier to transfer money, the World Bank said. Although 89% of people polled in wealthy countries have a financial account, only 41% in developing countries do, said the Gallup poll of about 150,000 people. Across the globe, women are less likely to have bank accounts than men are, especially in South Asia, the Middle East and North Africa.


Nearly a third of the people who didn’t have a bank account said they didn’t have enough money to get one, and a quarter said opening an account was too expensive. Others said someone else in their family already had an account, the banks were too far away, or they didn’t have the right documents.

Banking fees, for instance, can be dauntingly expensive in poorer countries. In Sierra Leone, such fees cost more than a quarter of the average annual income, the World Bank report said. Some workers are unable to drum up wage slips or official proof of residence, barring them from getting an account.

Barriers to traditional banking have led to some creative alternatives. To save without turning to a bank, people around the world do a variety of things, including buying gold and starting a savings club, in which people pool their savings and give the whole amount to a different member each week.

‘Mobile money’ also has taken off in much of Africa, a trend that the report called a ‘bright spot’ in expanding access to financial services. More than two-thirds of Kenyans surveyed said they had used a cellphone to send or receive money in the last year, accessing accounts that may not be tied to traditional banks or require the same kind of document. Some of the ‘unbanked’ rely on mobile money instead.

However, governments have increasingly pushed for regulations putting banks in charge of such services. India now requires mobile money to be run through banks, which may have slowed its growth there, the report said. The World Bank contends that phones and other technology should be used to increase access to banks.

“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” World Bank President Robert B. Zoellick said.



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-- Emily Alpert in Los Angeles