After the global financial crisis, banks may not be viewed as the most trustworthy organizations, but generally they are considered a safer place to keep money than stowing it under a mattress.
A new World Bank report shows that the proportion of adults who have an account at a bank, credit union or other formal financial institution in high-income countries is more than double what it is in developing countries — and suggests that the very lack of such an account may perpetuate poverty.
“Giving people a safe, affordable place to save their money is important,” saidLeora Klapper, lead economist in the finance and private sector of the World Bank’s development research group and an author of the report.
The study, based on a survey of 150,000 adults in 148 economies conducted by Gallup, estimates that there are 2.5 billion adults around the world who do not have a formal account, and that about 65 percent of them said they did not have enough money to use one.
“Formal accounts and savings may help poor people smooth their consumption and weather unexpected events such as unemployment, accidents, illnesses and deaths without necessarily resorting to expensive debt,” Ms. Klapper wrote in an e-mail. “Financial inclusion enables poor people to save and to responsibly borrow — allowing them to build their assets, to invest in education and entrepreneurial ventures — and to improve their livelihoods.”
There are some countries — including Cambodia, the Democratic Republic of Congo, Guinea, the Kyrgyz Republic, Turkmenistan and Yemen — where fewer than 5 percent of adults have a formal financial account.
There are some countries — including Cambodia, the Democratic Republic of Congo, Guinea, the Kyrgyz Republic, Turkmenistan and Yemen — where fewer than 5 percent of adults have a formal financial account.
Banking habits differed by region. Among people who are living on less than $2 a day, 27 percent of those in South Asia and East Asia have some kind of formal account. In the Middle East and North Africa, only 6 percent of those surviving on less than $2 a day do.
There is also a gender gap. In developing economies, men are much more likely to hold a formal account than women: 46 percent of men in these countries report having an account, while only 37 percent of women do.
The United States stands out for the proportion of its poorest residents who do not have an account at a formal financial institution. More than a quarter of those in the poorest quintile in the United States do not have an account, compared with just 3 percent of that quintile in Australia and Britain, and 9 percent in Canada.
Ms. Klapper said that among those who do not have bank accounts in the United States, more than two-thirds are women while a quarter are immigrants. And 46 percent cited lack of trust as a reason.
Although having a formal account typically helps people save more safely, even those who don’t have formal accounts put aside money for future use.
According to the report, 36 percent of those polled had saved or set aside some money in the previous 12 months. Not all of that money was going to bank accounts, of course. In wealthier countries, people also use various investment products and in developing countries, residents used community-based savings clubs.
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