The Global Findex Report 2021 – Today Current Affairs
- Recently the World Bank has released ‘The Global Findex Report 2021’.
- Global Findex surveyed more than 125,000 adults in 123 economies during COVID-19 to better understand how people use formal and informal financial services and digital payments.
Today Current Affairs
- Worldwide account ownership has increased by 50%, with 76 percent of the adult population having access to accounts.
- Account ownership has increased widely in dozens of developing economies, and most new accounts have been opened in India and China.
Access to Formal Banking : The Hindu Analysis
- The bulk of the global population (130 million and 230 million, respectively) without formal banking lives in India and China.
- Women are often excluded from formal banking services because they lack official identification documents, do not have mobile phones or other forms of technology, and have little financial capacity.
- In developing countries, men accounted for 74%, while women were six points behind with 68% of the accounts.
Unbanking : The Hindu Analysis
- Globally 24% of adults are unbanked, with one of various reasons being a lack of money, with distance being a barrier for 31% of unbanked adults.
- People who do not have an account with any financial institution or mobile money service provider are classified as unbanked.
- Globally, 64% of unbanked adults are educated at the primary level or below.
- 36% of unbanked adults worldwide say financial services are too expensive.
COVID-19 and Digital Payments : The Hindu Analysis
- The COVID-19 pandemic catalysed an increase in the use of digital payments.
- In the year 2021, 18% of adults in developing countries paid utility bills directly from the account. About one-third of these bills were paid online for the first time.
Mobile Money : The Hindu Analysis
- Mobile Money is supporting financial inclusion in sub-Saharan Africa, especially for women.
- There are 11 economies where adults have more mobile money accounts than financial institution accounts, all located in sub-Saharan Africa.
Contribution to the expansion of financial reach of financial providers : The Hindu Analysis
- Government, private employers and financial providers helped expand financial access and use among the unbanked by reducing barriers and improving infrastructure.
- Financial inclusion has become a cornerstone for both short-term relief and sustainable recovery efforts since the COVID-19 pandemic.
Financial Concerns : The Hindu Analysis
- In terms of finances, adults in developing countries are more likely to be concerned than adults in high-income countries.
- The highest concern with regard to medical expenses was observed in Sub-Saharan Africa and South Asia, with 64% of adults being more concerned, and the lowest in East Asia and the Pacific at 38% of adults.
Recommendations : The Hindu Analysis
- As governments seek to accelerate and expand access to digital banking services to tide over the pandemic, policies need to factor in protections for the most vulnerable sections, including women, the poor and those with limited educational qualifications or financial literacy.
- The gender gap in mobility must be bridged to ensure equitable progress on financial inclusion.