MANILA, Philippines -The world’s un-banked population has dropped by 20 percent to just two billion adults, according to a World Bank report.
The same report also shows that only 31 percent of the Philippines adult population has a bank account, while 81 percent of Malaysia’s adult population holds a bank account.
Between 2011 and 2014, the percentage of adults with an account increased from 51 percent to 62 percent, a trend driven by a 13 percentage point rise in account ownership in developing countries and the role of technology.
In the same period, 700 million people became account holders at banks, other financial institutions, or mobile money service providers.
World Bank Group president Jim Yong Kim said that access to financial services can serve as a bridge out of poverty.
The findings come in the latest edition of the Global Findex, the world’s most comprehensive gauge of progress on financial inclusion. Financial inclusion, measured by the Global Findex as having an account that allows adults to store money and make and receive electronic payments, is critical to ending global poverty.
Studies show that broader access to, and participation in, the financial system can boost job creation, increase investments in education, and directly help poor people manage risk and absorb financial shocks.
In the East Asia and Pacific region, increased account ownership rose by 25 percent and made significant progress expanding account ownership among the poor. Adult account ownership rose to 69 percent, up from 55 percent three years earlier.
In the Philippines, 31 percent of all adults have a bank account. The findings also indicate that of the total adult female population, 38 percent have a bank account. Disturbingly, only 18 percent of the all adults in the poorest 40 percent of households in the Philippines are banked.
In Indonesia, ownership of a bank account among the poorest 40 percent doubled to 22 percent. Thirty-six percent of adult population has bank accounts and 37 percent of female adult population is also banked.
In Thailand, 78 percent of total adult population are banked while it is 31 percent for Vietnam.
The report also said that innovations in technology could be a solution to making credit more accessible to a larger population, as in the case of the Sub-Saharan Africa.
Mobile technology for example reduces the cost of making or receiving payments, with or without a bank account. Mobile phones or point-of-sale (POS) terminals could increase efficiency of these payments.
In the Philippines, remittances or money transfer from overseas Filipinos to their beneficiaries are a combination of banks, physical pay-out centers and mobile phones. In some cases, it does not even require a bank’s direct participation.