The COVID-19 pandemic has accelerated financial inclusion, resulting in significant digital payments growth alongside formal financial services‘ global expansion. According to the Global Findex 2021 database, this development generated new economic opportunities while also closing the gender gap in account ownership and boosting household resilience to manage financial shocks better.
As of 2021, 76% of persons worldwide have a bank, other financial institution, or mobile money provider account, up from 68% in 2017 and 51% in 2011. Significantly, the increase in account ownership was evenly dispersed among a far more significant number of countries.
Previously, much of the growth in past Findex surveys over the last decade was focused on India and China. Still, this year’s survey indicated that the percentage of account ownership surged by double digits in 34 countries since 2017.
The pandemic has also increased the usage of digital payments. Over 40% of adults in poor and middle-income nations (excluding China) made merchant in-store or online payments using a card, phone, or the internet for the first time since the pandemic began.
Moreover, a third of adults in all low- and middle-income economies paid their power bills straight from a formal account. Following the pandemic, more than 80 million adults in India made their first digital merchant payment, and over 100 million adults in China did.
Two-thirds of adults nationwide currently make or receive digital payments, with developing economies increasing their participation from 35% in 2014 to 57% by 2021. In developing countries, 71% have a bank, other financial institution, or mobile money provider account, up from 63% in 2017 and 42% in 2011. Mobile money accounts have significantly increased financial inclusion in Sub-Saharan Africa.
The poll discovered that the gender difference in account ownership has shrunk for the first time since the Global Findex database’s launch in 2011, giving women more financial security, privacy, and power. Since the most recent survey round in 2017, the gap has decreased from 7 to 4 percentage points globally and from 9 to 6 percentage points in low- and middle-income countries.
A wage or government payment, a payment from the sale of agricultural goods, or a domestic remittance payment into an account are now received by about 36% of adults in developing economies. According to the data, receiving money into an account instead of cash can encourage people to use the official financial system since 83% of those who received digital payments subsequently used their accounts to send money online.
Nearly two-thirds of users utilized their accounts to manage their money, while 40% saved using them, expanding the financial ecosystem.
Despite the improvements, many adults worldwide still do not have a dependable source of emergency funds. Only approximately 50% of persons in low- and middle-income countries reported being able to acquire additional funds during an emergency with little to no trouble, and they frequently rely on unstable financial sources like family and friends.
For instance, 30% of individuals in Sub-Saharan Africa do not have a mobile money account because they lack an identity document, indicating a potential opportunity to invest in reliable and accessible identification systems. Government payments are still made in cash to more than 80 million adults with no bank accounts; digitizing some of these payments could be more affordable and less corrupting.
A solid and rigorous consumer protection framework, confidence in using financial goods, trust in financial service providers, and specialized product design are all necessary for increasing account ownership and utilization.
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