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GFDR 2014: Financial Inclusion

Stock market charts — Photo Credit: iStockphoto © loveguli

Financial inclusion is key for reducing poverty and boosting shared prosperity

State as Regulator — Photo Credit: iStockphoto © andipantz

New technologies hold promise for expanding financial inclusion

Bank Competition — Photo Credit: iStockphoto © MachineHeadz

Women-owned firms face particular challenges in gaining access to finance

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Global Financial Development Report 2014 is the second in a new World Bank series, following the inaugural 2013 Global Financial Development Report, which re-examined the state’s role in finance after the global financial crisis. Common to both reports is that they present a nuanced approach to financial sector policy, grounded in a synthesis of new research evidence. The report presents new data and research, drawing on them to contribute to the policy discussion. It highlights novel evidence that financial inclusion can reduce poverty and boost shared prosperity. Read the Report's FAQs »

Watch Asli Demirguc-Kunt introducing the report

Main Messages

  • Financial inclusion is crucial for reducing poverty and boosting shared prosperity. The poor benefit greatly from basic payments, savings, and insurance services.
  • Financial systems are far from inclusive. Half of the world’s adults have no bank account.
  • Policy should focus on fixing market and government failures, not on promoting inclusion for inclusion’s sake. Providing credit for all leads to instability.
  • Policymakers should provide an environment of strong laws and regulations, good information, and healthy competition. This will encourage financial service providers to embrace new technologies (e.g., mobile banking, biometric identification) and products (e.g., commitment accounts, index-based insurance).
  • Responsible financial inclusion requires educating consumers about finance. Classroom-based financial education for general population has little impact. People learn better during “teachable moments” (e.g., when starting a job or getting a loan). Also, messages delivered though social networks and engaging channels(e.g., soap operas) show promise. Read More »


BankGlobally, 1 in 2 adults—some 2.5 billion people—does not have a formal bank account.

BlockAbout 80% of the poor living under $2/day have no bank accounts

The share of adults owning an account varies from less than 1 percent (in Turkmenistan) to more than 99 percent (in Denmark).

road20% of the “unbanked” report distance as a key reason for not having an account.

200 million micro to medium enterprises in developing economies lack access to affordable financial services and credit.

78% respondents agree that access to finance in their countries improved significantly in the last 5 years.

In developing economies, 35% of small firms report access to finance as a major obstacle to their operations.

60% respondents consider access to basic financial services a significant problem for households in their country.

80% agree that social banking is a useful tool to increase financial access.

In 2011, 22% of adults made new savings deposits with financial institutions, and 9% received new loans.

Only about 3 in 1000 adults in Central African Republic have a bank account.

The number of bank accounts per 1,000 adults in Mongolia increased by more than 9 times between 2006 and 2011 (from 345 to 3,183)

Less than 2% of adults save at a financial institution in Pakistan compared to 23% in Kenya.

7% of adults in Kazakhstan saved in a financial institution in the past year. This is much higher than its Central Asian neighbors, all of which (Turkmenistan, Tajikistan, Uzbekistan, and Kyrgyz Republic) had less than 1% adults save in 2011.

The share of adults who regularly (at least once per month) use bank accounts varies from less than 1% (Turkmenistan) to almost 100% (Finland).

16% of adults in Ireland have loans from financial institutions compared to 31% in Iran. With 19% of adults with a loan, France is only one percentage point higher than Sri Lanka.

8% of Indian adults have debit cards, compared to 41% in both Brazil and China and 37% in Russia.

5% of adults in Italy and 6% of adults in Japan have received new loans from financial institutions in 2011, compared to 8% in both Rwanda and Haiti.

Cyprus has the highest number of bank branches per 100,000 adults at 104, followed by Spain (90) and Luxembourg (89).

In Nepal, 39% of firms have bank loans, while 18% of Indonesian firms have loans.

The share of firms in Rwanda with a line of credit increased from 38% to 46% between 2006 and 2011. For small firms, it increased from 22% to 39%.

European economies have high financial depth, measured by the ratio of bank private credit to GDP.

The economies with the most financial depth are San Marino (362%), Cyprus (285%), Ireland (209%) and Spain (208%). The highest outside Europe are Hong Kong (186%), New Zealand (145%), China (121%) and Australia (121%).

Hong Kong has the highest stock market capitalization to GDP ratio, a measure of financial market depth, of 397%, more than twice that of Switzerland (179%), which takes the second spot.

With stock market capitalization of less than 2 % to GDP , Paraguayan financial markets are less deep than those in Cote d’Ivoire (at 29% market capitalization to GDP).

China’s stock market turnover ratio (value trade/capitalization), a measure of financial market efficiency, increased from 80% to 178% between 2001 and 2011, while India saw it decline from 197% to 58% in this period.

On average, market share of three largest banks in a country was 71% in 2011.

14 economies have a bank concentration above 99%, meaning in these economies, three largest commercial banks almost equal the whole commercial banking system.

Hong Kong has the highest number of publicly listed companies per 1,000,000 people, at 208.2. Serbia comes a close second at 207.7.

GFDR's Data

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