Banking for Billions

August 2, 2010

Barclays Bank is adding its voice to the growing chorus of organizations calling for broad-based financial inclusion as a means to fostering prosperity and economic stability, worldwide.

In a newly released report - Banking for Billions - the UK banking giant cautions that despite a groundswell of support to improve financial inclusion, significant barriers are apt to prevent further progress. Barriers like lack of education, outdated regulations and mistrust of banks.

The only good solutions to these issues will come from collaboration, the report suggests.

"Access to financial services lifts people from poverty and fosters economic growth, but what this research shows is that there is still a long way to go with efforts to extend financial inclusion," Deanna Oppenheimer, chief executive of Barclays UK retail bank, said in a June 14 press release.

"The report also recognizes these are not solely problems for the developing world. The repercussions of financial exclusion are just as evident in developed countries," Oppenheimer added.

Demonstrating that it can walk the walk (not just talk), Barclays earlier this year joined forces with the NGOs CARE International and Plan International (a UK-based children's development organization) to launch a program called Banking on Change. Banking on Change is a three-year initiative to promote community-based microfinance (such as village savings and loan associations) in disadvantaged areas of Africa, Asia and South America.

Expectations are that Banking on Change will succeed in improving the lives of as many as 500,000 individuals through initiatives like village savings and loan programs.

Village savings and loans make it possible for groups of 15-25 people (typically neighbors or friends) to pool savings in a fund from which members can borrow. Savings are deposited usually for set time frames, such as 9-months or a year. At the end of the agreed to time frame, all funds (including interest on loans) is distributed in lump sums to each participant. Often, members then regroup for another cycle of savings and loans.

Download a copy of Banking on Billions here.

There are 78 ATMs for every 100,000 adults in the developed world; in developing countries just 23 ATMs are deployed per 100,000 adults 

_{-Financial Access database}