Topic: Three Quarters of The World’s Poor Are “Unbanked” (Read 673 times)

I think it is not necessary that they will have less income maybe they are earning more and they are suffering from some problem and in the future they will get good income so don’t look down to those poor people. If they are not having a proper source of income with them and they want to earn more than they should get into the bitcoin so that they will not need any bank account and they will easily keep their bitcoin in the bitcoin wallet and they will become rich some day.

Many countries are facing the problem of education, especially the third world countries. If I were to blame anyone for this, definitely it would be government but not the only the government of your country. The world of politics is full of unbelievable facts. Talking about banks under such conditions is actually ridiculous. But I am happy to see you here and hope soon more people of your country will be seen here.

Unbanked, because they probably do not believe the financial system! Remember back in 2008 when the market crashed and there was a global recession, it was cause by the big banks in the US. But did any banker go to jail? No! There was none. So how can you trust that system that screwed us over already?

You talking about financial inequality of the world but in my country there is problem of education itself. More than 30% of people don't even get the formal education and they are left out of the school when they don't pay fees for it. No free education as government is not stable enough to provide that too.

This has led to illiteracy a lot which in turn make these people to work as servants, low grade jobs, no respect and almost only that much payout which can feed their families only one time. This is shame and it's all because of internal factors of countries. Like politics, government, education problem etc.

The banks doesn't even count in the thoughts of these people.

It is not that simple. In most cases, the poor may be having just 2 or 3 ID documents and hardly any address proof. And further complicating the things, in many instances there will be spelling mistakes and mismatches in many of these documents. And some of the banks reject certain type of ID proof such as driving license and voter ID.

And why should they have bank accounts if they earn only $ 2 a day?
If their earnings were higher, then they would have decided to make a bank account for themselves.

And why should you post this article here? How does this relate to bitcoin?

All the credit goes to the government of your country dude. Those creatures that we call our political leaders are supposed to do development in their respective areas. However, I invite you to give some suggestions regarding the improvement in the methods, how can be these simplified or what are the problems basically?

Thanks for bringing this up OP. I always wonder what happens to those without bank accounts, under a cashless society, where paper money is outlawed.

Banks refusing to grant the poor accounts could also illustrate a key reason behind bitcoin's growth. Every person that wants a bank account who can't get one is likely to embrace bitcoin as they search for alternatives. There is often an interesting network of cause and effect driving financial and economic statistics. This case may be no different.


I have heard stories of people hiding paper money under their mattress only to have it be devoured by termites. Don't know if that is a true story or a myth invented by banks to encourage customers to deposit more money in their bank accounts. Might want to exercise caution with that method of saving though.

Who makes the big gear of society works it's the middle-low to middle-high classes. The miserables don't give money, but give votes, in change they receive few pennies from the goverment assistentialism, so the system can keep working as it is.

The riches don't pay what they should, but they finance the political campaigns and are very influent. So most of them are happy: The miserable enjoying their pennies and corroborating for the chaos and injustice, the riches/banks growing their fortunes without paying what they should, putting all the expenses on the middle classes budget!

What I mean is that these "unbanked" people give a shit about Crypto-Currency, banks, etc. They just want to continue living as they live now, "lunching with other's money" without worring about future consequences and without dreaming about a better society that could replace the moribund we have now.

Probably you have not experienced that unbanked people have problem in moving their funds, paying items online, or even paying their bills online.  I used to be one of those unbanked people and  I find it hard to send money to my relatives since I have to move out of my house and go to remittance center then fill up a form and send them the money.  Bitcoin solve this.  Next thing is, buying stuff online, I never experienced buying stuff online until I known bitcoin.  It enable me to buy stuff online and have it deliver in my door step.  Subscribing for digital services and buying domains and hostings.  These are the few things that I am able to do after I known bitcoin.

I couldn't create relationship between bitcoin and unbanked people. Bitcoin doesn't give people bank or banking functions. It only gives people free btc transfer method. Having bitcoin doesn't mean you have money unless you can liquidify this BTC.

THe real problem is something different. I am aware of it, because a lot of people in my country as well, doesn't have a bank account even after having a valid ID. The issue is with the banks. They just don't want to open a bank branch in extremely remote areas because the business is very less. That won't be sufficient for the banks to run a separate establishment in such places. That's why they refrain from opening a bank branch in such areas, instead they try to open a big sized branch in metro cities, which will ensure business!

In my country, only some government funded banks open up branch in rural and remote areas but again, that doesn't give those poor man any relief. They are being harassed for documentation which they don't understand. Banking system needs to be simplified for them.

Seriously? So what is the real problem for them? Why they can't just provide an ID and open a bank account? Just opening an account is absolutely free in most banks and it doesn't take mutch time. In that case they just don't realy need a bank account.

True, not anyone can open a bank account where I live, at least the poor can't. Aside from the requirements, the initial deposit and maintaining deposit would be hard to save up for people who barely have food to eat anyway. If only the government would demand the banks accept smaller deposits, then people would be able to keep their money in the bank.

Bitcoin would be somewhat easier since here we can cash in at a 7-11 where anything under $50 have no fees. People would have to pay a fee though if they are to cash out their bitcoin and they don't have a bank account. (With my bank at least, the fee is waived.)


These clubs sort of remind me of the "paluwagans" here in the Philippines. I actually never tried that, I find it risky. It's all well if you are the first person to get the money but the farther you are in line, the riskier, since other member who already got their "pay" could end up making excuses why they can't give money. I find it basically the same as saving your money in a box, just with more risk. It's probably only suggested for people who can't keep money at home because of a family member who might steal the money.

The post is still very much relevant even at this present day and no one can dispute the fact that even the political class who are saddled with the responsibility of turning things around have not been able to do much in the last five years and those category of people have equally not been banked from my point of view as the increase is just those people who are already banked are increasing the number of banks accounts they are holding.

I agree with op, because i am one of those poor peole who doesn't have a bank account because i am unemployed. I fail to qualify into different kinds of jobs because i am too weak for hard labor and haven't got a degree because i needed to stop college die o financial problems. Although a lot of people here in my place are like me, that isn't just the case here. Lack of education also is a big reason for this here. Because, they lack knowledge and doesn't understand how banks work. And would rather store their money at home. And some people who does this actually can have a bank account if only they choose to.

Tell me how btc may help people what make 2$ a month,even in my country central europe people are living from paycheck to paycheck,btc is mess for rich people.Sure people need good worldwide digital banks,with cheap loans and where money will pay interest.Bankera wants to do bank like that,blockchain,fiat crypto bank,now thay are running his pre-ico

I guess the main point about this is banks are useless if you are looking for your money to grow, I for instance got first into stocks before knowing that I need to open up a bank account in order to cash out my earnings. Also if security is the main concern yes it is better to store your Money in a bank rather than spending your money to a security box which can still be crack open by criminals. And for people earning less than 2 dollars a day what is it left in there money if you want them to open up a bank account? Obviously the 2 dollars will be needed in order to surivive the day.

Yes op is right, many people in my country also dont have a bank account. But I dont think bitcoin can help them in anyway. People dont have bank accounts because they are uneducated and they dont know the basics of banking process . Literally speaking they dont know to read and write. Then just imagine how can they use bitcoin. Who will teach them to operate computer or android phone to download and use bitcoin wallet?

The poorer the population the easier it is to manage. The government are committed to ensuring that the country was not a good education for the same reason. Middle class is not dependent on the government and therefore poorly managed. But people choose for themselves such a government, therefore, have only themselves to blame.

In my country, the lack of formal financial education, is one of the biggest hindrance for having a bank account. They will rather buy a lottery ticket than to save it.

It still is relevant. There's still a massive amount of unbanked people to this day. That's also part of what will help propel cryptocurrencies to new heights.

But most importantly, the unbanked will have access to capital and be able to pull themselves out of poverty without having to rely on other countries.

Let's just hope that they'll skip the corruption nonsense and realize that collaboration will make everybody much richer faster.

You should really post a link to your source here.
The original post is from http://econ.worldbank.org/external/default/main?theSitePK=469382&contentMDK=23173842&menuPK=574960&pagePK=64165401&piPK=64165026

The article is more than 5 years old. Really not relevant for discussion now.

Even in my place, a lot of the poor people doesn't have bank accounts. They want to open bank accounts, but the bank officials are not too keen. They demand multiple ID documentation and residential proof, and these poor people give up after spending so much time in the banks. Bitcoin can take advantage of this situation, as anyone can open an account in the exchange.

STORY HIGHLIGHTS
About 75% of adults earning less than $2 a day don’t have a bank account
More than 2.5 billion people around the world don’t have a bank account
The poor face bureaucratic, travel distance and cost barriers
Three quarters of the world’s poor don’t have a bank account, not only because of poverty, but the cost, travel distance and amount of paper work involved in opening an account, according to new data released by the World Bank.
About 25% of adults earning less than $2 a day have saved at a formal financial institution, according to the 2011 survey of about 150,000 people in 148 countries. The problem of being “unbanked” is also linked to income inequality: the richest 20% of adults in developing countries are more than twice as likely to have a formal account as the poorest 20%, according to the data collected by Gallup, Inc. for the World Bank’s Global Financial Inclusion Database. The Bank’s Development Research Group is building the database with a 10-year grant from the Bill & Melinda Gates Foundation.
The research offers the most comprehensive picture of how adults around the world save, borrow, make payments, and manage risk. Worldwide, 22% of adults report having saved at a formal financial institution in the past 12 months. More than half of the population in developing countries doesn’t have a bank account, compared with just 10% in rich countries.
“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said World Bank Group President Robert B. Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world’s ‘unbanked’ makes the case: the more poor people are banking today, the more they are banking on their future.”
Even among those who do have a formal bank account, only 43% use their account to save. And 61% of account holders worldwide use their account to receive payments from an employer, the government or family members living elsewhere, according to the World Bank Global Financial Inclusion Database, or Global Findex.
Women make up a disproportionately large share of the unbanked. For example, while 37% of women in developing countries have an account, 46% of men do. That gap is even bigger among those in poverty: women living below $2 a day are 28% less likely than men to have a bank account.
“Financial tools for savings, insurance, payments, and credit are a vital need for poor people, especially women, and can help families and whole communities lift themselves out of poverty,” says Melinda Gates, co-chair of the Gates Foundation. “The Global Findex can enhance our understanding of how poor households access and use financial services.”
“Lacking a bank account often forces savers to resort to risky measures, such as putting money under the mattress,” says Asli Demirguc-Kunt, director of development policy and chief economist of the Finance and Private Sector Network, who co-authored the paper analyzing Global Findex data. “That makes it harder to build up reserves, let alone use credit, insurance and other complex formal financial tools,” she says.
The database also identifies the barriers to financial inclusion. Nearly two-thirds of the unbanked cite poverty as the main culprit, but within that group, about a third of them also blame the cost of opening and maintaining an account or the banks being too far away (which means long bus rides for many).
“ Financial tools for savings, insurance, payments, and credit are a vital need for poor people, especially women, and can help families and whole communities lift themselves out of poverty “
Melina Gates
Co-chair, the Gates Foundation
“These barriers may have proved to be excessive, especially considering that many people can only set aside a very small amount of money each month,” says Leora Klapper, supervisor of the Global Findex and lead economist at the Development Research Group. “Policy makers should take note that adults who save informally find the physical, bureaucratic and cost barriers to opening a bank account to be especially prohibitive.”
Money transfers through mobile phones are a form of increasingly popular nontraditional banking, which often doesn’t require users to travel or set up an account at a brick-and-mortar bank. Such mobile banking, which allows account holders to pay bills, make deposits or conduct other transactions via text messaging, has expanded to16% of the market in Sub-Saharan Africa, where traditional banking has been hampered by transportation and other infrastructure problems. In particular, Kenya has seen impressive growth in that market, with 68% of adults using a mobile phone for money transactions.
The widespread use of informal-savings mechanisms suggests a missed opportunity for the market to provide safe, affordable financial products to the unbanked. For example, adults who don’t use banks or other formal financial institutions often turn to fairly sophisticated methods to manage their finances, such as rotating-savings clubs or credit associations. Each week, those clubs pool deposits from members and give the entire collection to a designated member. The practice is particularly popular in Sub-Saharan Africa, where 48% of savers use an informal savings club or person outside the family to save. In Nigeria, 69% of adults who save use the clubs, also known there as esusu, ajo, cha, or adashi.
Few adults in developing countries use formal financial products to manage risk. More than 11% of adults in developing countries have an outstanding loan for emergencies or health-care needs, but more than 80% of these adults use only informal sources of credit. Of adults in developing countries working in farming, forestry or fishing, only 6% of them have crop, rainfall or livestock insurance.
The questionnaires used for the survey, available in 15 languages, can be found here. The World Bank encourages countries to use the questions to collect more financial inclusion data, by adding them into censuses or other national surveys.