Financial Access Expanding in Down Economy

September 15, 2010

Access to formal financial services is on the rise in developing countries, according to a new report from CGAP and the World Bank Group.

Financial Access 2010, the second annual survey of financial regulators in 140-plus countries, reveals that more bank accounts are being opened around the world, even as lending remains stagnant.

"Whether it is countries' commitment to policy change, or the numbers of people gaining services who were previously unbanked, the broad patterns of financial inclusion detailed in Financial Access 2010 are promising," the two groups said in a statement.

Worldwide, there were 65 new deposit accounts opened for every 1,000 people last year, representing a 4.3% increase over 2008, according to Financial Access 2010.

Additional metrics paint an even brighter picture. Globally, the report reveals, one bank branch, five ATMs and 167 point-of-sale terminals were deployed for every 100,000 adults in 2009. And it points to promising trends, including the deployment of new technologies (such as mobile telephones) that create low-cost delivery channels.

On the downside, low and middle income countries still lag richer countries in terms of financial services outreach, and lending remains stagnant.

However, the report does contain first-of-its-kind data on lending to small and mid-sized enterprises (SMEs), which totaled $10 Trillion in 2009.

"Access to savings and payments accounts is a basic need," Nataliya Mylenko, lead author of the report, said in a statement released today. "The fact that people are using basic deposit services more, even as world financial markets were experiencing high volatility, confirms how essential these services are to help families manage through risky and uncertain periods."

"We hope policy makers will use this data to inform their approach as they work to close the financial access gap," said Jamnamitra Devan, World Bank Group vice president with responsibility for financial and private sector development.

Americans purchase $75 billion a year in money orders from non-banks

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