Unbanked: Three-Quarters Of The World's Poor Do Not Have A Bank Account

Local villagers carry coal after having scavenged the coal illegally from an open-cast coal mine in the village of Jina Gora on February 11, 2012 near Jharia, India.

More than 2.5 billion people -- or half of all adults around the world -- are "unbanked," meaning they don't have a bank account, according to data released by the World Bank on Thursday.

The World Bank's data comes from the Gallup World Poll Survey, which found that more than three-quarters of the world's poor are unbanked. Poverty, as well as proximity to a bank and the amount of paperwork involved, prohibit people from having a bank account.

Being unbanked prevents the world's poor from saving for and investing in the future -- whether it be by paying for an education, buying a home, or starting a new business. The world's unbanked population is also at a disadvantage when it comes to borrowing.

There is a huge disparity between rich countries and the rest of the world when it comes to unbanked populations. Nine out of 10 adults in rich countries have a bank account, which is more than double the number of adults in developing countries with bank accounts, according to the World Bank. Just 18 percent of adults in the Middle East and North Africa and 24 percent of adults in sub-Saharan Africa have a bank account.

As a result, poor people are often forced to borrow money from informal lenders who generally charge high fees, according to the World Bank. Friends and family are the largest source of loans in all regions except for rich countries, where banks and credit unions are the most popular source of loans. About 40 percent of adults in sub-Saharan Africa have borrowed from friends or family in the past year, while about 5 percent of them have borrowed from an informal lender. An emergency or health care are the single largest reason why people in developing countries take out loans.

In the U.S., 7.7 percent of households are unbanked, according to the Federal Deposit Insurance Corporation.

From our partners

• How To Get Away With Being Bad At Your Job - The Billfold
• The Sharing Economy - LearnVest
• Uninsured: How To Get Health Care Without Insurance - The Billfold

Comments

[Jay Gould]

08:01 PM on 04/24/2012

The unbanked are shut out of regular banking services like checking and savings accounts and credit and debit cards and have to rely instead on prepaid cards, check-cashing and utility-payment stores and these are very expensive services, even though prepaid cards are quickly becoming much better than they were even a year ago. Studies suggest that education improves the rate of adoption of traditional banking services, but in most cases that is not an option. Some consumers will stick to payday loans and check cashing services no matter what. For more: http://blog.unibulmerchantservices.com/banking-on-the-unbanked.

[edejan]

08:16 PM on 04/23/2012

Are you kidding? How many poor and working poor right here in the good old USA don't have bank accounts? That's why pay day lenders do such a good business...and the government is trying to shut them down instead if making it easier for their poor customers.

[anderson1446]

08:56 AM on 04/23/2012

Thanks for stating the obviouse

[PRETTYWOMAN-2]

08:45 PM on 04/22/2012

i thought they bartered with chickens-n-roosters in those 3rd world countries...^^^^.... ??!

[chickenflu4]

06:36 PM on 04/22/2012

and this is news?? next what? how many monkeys are vegetarians?

[yappnmutt]

08:12 PM on 04/20/2012

many of these people have no need for a bank or money for that matter.

the purpose of this article is to show the size of the market for banksters to exploit with their fiat fractional reserve counterfeiting ponzi scheme.

[nypapajoe]

11:58 AM on 04/20/2012

We don't have to go to foreign nations! We have millions here in America who can not afford the banking fees and don't have bank accounts! Yet the greedy bastards are posting huge banking profits that have broken all records! The CEOs are making so much money they are outing their loot in foreign banks!

[marvineh2001]

08:57 AM on 04/20/2012

I know how that is I just joined them probably with about 150 million who lost their bank accounts in USA. I used to have one with Chase Bank that I had forever but the place that I currently work for cannot pay me what I used to make and just recently closed down my account. We now have world poverty. In the USA our nation is so broke now they don't have any money and they are laying off police and fire men two groups of the work force and so now gangs that exist here now will start spraying the neighborhoods, it happens in Denver by the Mexican cartel who have $250,000 for each business they pay cash and they have automatic weapons and dyanmite, other explosives elaborate setup for their drug empire. I met Michaels Asberry who founded the Rolling 30's and he told me about how they were going to move into neighborhoods and they do their transactions at banks in Denver as well a the GKI'S. They are ruthless and the banks fund their drug money and make a return in Denver they just walk in like that movie Scarface and bring bundles of dirty money in for laundering. Denver Police knows this and can do nothing about these things trust me I know.

[frank day]

07:25 AM on 04/20/2012

spam

[PARepublican]

05:40 AM on 04/20/2012

If I had my choice I would NOT be putting my money in a bank. I went into a branch one day and tried to withdraw $12,000 and they said they didn't have that kind of money.

[frank day]

07:25 AM on 04/20/2012

Hank Paulson and Bush destroyed the small banks.

[Thaddeus Jude]

12:56 AM on 04/20/2012

Are you kidding me? This is news?!

[nypapajoe]

10:26 PM on 04/19/2012

Americans don't have bank accounts who can afford them!

[sking007]

10:04 PM on 04/19/2012

Yeah, and they're better off without them. Banks would only return them to slavery.

[mmike1969]

09:53 PM on 04/19/2012

There is also the fact that large parts of the world do not have trustworthy banking systems or have some kind of banking insurance to protect the customers.

[vette086]

07:39 PM on 04/19/2012

We are part of this world,we have 2 classes of poor,we have poor,and the working poor,the other class is the wealthy.Don't ask you see the middle class!!!!!!