Half the world is unbanked_200_Standard

Half the world is unbanked

By Alberto Chaia, Tony Goland, Maria Jose Gonzalez, and Robert Schiff

Research reveals that more than half the world’s adults do not use formal or semiformal financial services to save or borrow money.

Limited information on the size and nature of the global population using financial services limits policy makers’ abilities to identify what’s working and what’s not, and it limits financial services providers’ abilities to identify where the opportunities lie and where they could learn from current successes.

A new report, Half the world is unbanked (PDF–714KB), provides an improved estimate of the size and nature of the global population that does and does not use formal (or semiformal) financial services.

This paper builds on a data set compiled from existing cross-country data sources on financial access and socioeconomic and demographic characteristics to generate an improved estimate of the size and nature of the global population that does and does not use formal (or semiformal) financial services.

Key findings include:

  • 2.5 billion adults, just over half of the world’s adult population, do not use formal financial services to save or borrow.
  • 2.2 billion of the unserved adults live in Africa, Asia, Latin America, and the Middle East.
  • Of the 1.2 billion adults who use formal financial services in Africa, Asia, and the Middle East, at least two-thirds, a little more than 800 million, live on less than $5 per day (purchasing power parity adjusted).
  • Regulatory and policy environments, as well as the actions of individual financial services providers, affect usage levels in a way that is, to a large extent, independent of countries’ socioeconomic and demographic characteristics.

Download the full report on which this article is based, Half the world is unbanked (PDF–714KB).

About the author(s)

Alberto Chaia is a principal in McKinsey’s Mexico City office, of which Maria Jose Gonzalez is an alumna; Tony Goland is a director in the Washington, DC, office; and Robert Schiff is a consultant in the New York office.

This research was conducted in partnership with Aparna Dalal and Jonathan Morduch of the Financial Access Initiative, a consortium of researchers at New York University, Harvard, Yale, and Innovations for Poverty Action. For more information on the Financial Access Initiative, please go to www.financialaccess.org.

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