66
FINANCIAL INCLUSION FOR INDIVIDUALS
GLOBAL FINANCIAL DEVELOPMENT REPORT 2014
Adults, %
40
0
Adults, %
40
20
1,000
40
Access to formal account
30
20 0
125
Access to formal account
40 20 0
18
40
34
20 0
Access to formal account
Adults, %
Adults, %
60 Adults, %
Population density, population per square kilometer
FIGURE 2.3 Share of Adults with an Account in a Formal Financial Institution
$4,000
20 0
Access to formal account $8,000
48
40
Access to formal account $15,000
GDP per capita, current US$ Sources: Global Financial Inclusion (Global Findex) Database, World Bank, Washington, DC, http://www.worldbank.org/globalfindex; World Development Indicators (database), World Bank, Washington, DC, http://data.worldbank.org/data-catalog/world-development-indicators; Faz and Moser 2013.
population density; the second is a function of the per capita income of potential customers. Population density and per capita income are two key factors that are systematically correlated with financial inclusion. Figure 2.3 shows the percentage of adults who are 15 years or older and who have a formal bank account according to per capita income (horizontal axis) and population density (vertical axis). If measured in terms of access to bank accounts, financial inclusion is an increasing function of a country’s per capita income. There is also a strong positive relationship between population density and financial inclusion. This is largely explained by the economies of scale in countries such as Bangladesh, India, and Indonesia, where high population densities have been an enabling condition for financial inclusion through traditional bank branches, despite low levels of per capita income.
This classification of financial inclusion environments can highlight the settings in which mobile banking and mobile payments can have the greatest impact on financial inclusion. It is possible to identify three broad financial inclusion environments, corresponding to three of the four corners in figure 2.3, in which one would expect the adaptation of mobile banking services to follow different paths: (1) low-income and low–population density environments, characterized by the absence of a widespread banking infrastructure and, often, of a dominant telecommunications provider; (2) low-income and high–population density environments with a widespread network of banks and MFIs and well-developed telecommunications providers; and (3) highincome and low–population density environments with a developed banking sector, a widespread organized retail sector, and strong telecommunications providers.