FINANCIAL ACCESS INITIATIVE FRAMING NOTE | OCTOBER 2009

Half the World is Unbanked

Alberto Chaia
McKinsey & Company

Aparna Dalal
Financial Access Initiative

Tony Goland
McKinsey & Company

Maria Jose Gonzalez

McKinsey & Company

Jonathan Morduch
Financial Access Initiative

Robert Schiff
McKinsey & Company

The Financial Access Initiative is a consortium of researchers at New York University, Harvard, Yale and Innovations for Poverty Action.

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Over the past quarter century, the microfinance movement has propelled a global expansion of financial services for the worlds poor. The Microcredit Summit Campaign, a leading advocacy group, counted 154 million clients world-wide at the end of 2008. That is impressive, but it is just a start relative to the unmet demand. Experts agree that unmet demand for finance is large, but the exact number (or even a rough but credible number) has been hard to pin down, with estimates ranging from half a billion people to three billion.
Limited information on the size and nature of the global population using financial services limits policymakers abilities to identify whats working and whats not, and it limits financial services providers abilities to identify where the opportunities lie and where they could learn from current successes. This paper builds on a dataset compiled from existing cross-country data sources on financial access and socioeconomic and demographic characteristics to generate an improved estimate of the size and nature of the global population that does and does not use formal (or semi-formal)1 financial services. Our key findings are: 2.5 billion adults, just over half of worlds adult population, do not use formal financial services to save or borrow. 2.2 billion of these unserved adults live in Asia, Africa, the Middle East and Latin America. Of the 1.2 billion adults who use formal financial services in Asia, Africa, and the Middle East, at least two-thirds, a little more than 800 million, live on less than $5 per day.2 Levels of financial inclusion are not determined by socioeconomic or demographic factors alone. We found considerable variance amongst countries when we correlated financial services usage with national levels of per capita income and urbanization for each country. The variation in the data suggests that socioeconomic and demographics are not the only drivers of financial inclusion. Financial inclusion can be provided effectivewww.financialaccess.org

2.5 billion adults, just over half of worlds adult population, do not use formal financial services to save or borrow. 62%of adults, nearly 2.2 billion, living in Asia, Africa and Latin America are unserved A little more than 800 million served adults live on less than $5 per day.

1. This paper considers the use of formal and semi-formal financial services. We exclude informal financial sources such as moneylenders or informal rotating savings and credit schemes. Semi-formal sources include microfinance institutions, which might not be subjected to the same regulation as traditional banks. 2. This paper uses regional definitions from the UN Human Development Index. High-income OECD countries, as well as Central Asia and Eastern Europe, and Latin America and the Caribbean are excluded from this analysis because the methodology employed is ineffective for these regions because of their relatively high incomes in comparison to the levels of usage. Please see the methodology section for further discussion.

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ly through the regulatory and policy environment and actions of individual financial services providers. Countries including India and Thailand have far wider usage of formal financial services than would be predicted by their level of GDP or urbanization. Our findings provide empirical grounding for what many in the field already believe to be true. It is possible to serve low income communities at scale with financial services, but there are still billions left to reach.

Approach
Our three core analyses address the number of adults who do and do not use formal financial services, levels of usage for people living above and below $5/day PPP-adjusted, and correlations between levels of financial services use and income and urbanization. To conduct these analyses, we built a dataset with four components of country-level data. The country-level data for these components is included in Table 1: i. Percentage of adults with a credit or savings account measured from Honohan (2008). Honohan presents estimates, for more than 160 countries, of the fraction of the adult population using formal financial and semi-formal (i.e., from unregulated microfinance institutions) services by combining data from banks and microfinance institutions with household surveys. Honohans financial measures are based on population data from 2003. ii. 2005 population data from the United Nations Human Development Index online database. We define adult population as individuals 15 years or older.3 iii. Percentage of population living on more than and less than $5/day, PPP-adjusted, using most recently available data from World Banks PovCal Net.4 iv. 2005 per capita income and level of urbanization from the Human Development Index online database. There are two key terminological distinctions in this paper that are worth emphasizing: 1) use of financial services, rather than access; and 2) focus on number of adults or households.

Use of financial services: In the world of financial inclusion, experts

often go back and forth between use of financial services and access. There are important conceptual debates about which of these makes for more appropriate policy goals do we aim for people to have the opportunity to use formal financial services, or are there some services that we want all people to use (e.g., savings, health insurance)? This paper
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3. A new version of the United Nations Human Development Index that uses 2007 population data is available at http:/ / hdr.undp.org/en/statistics/data/ 4. The World Banks PovCal Net is an online computational tool that provides regional and country level poverty measures.

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uses data that is explicitly focused on usage, in large part because that is what was available. Access is more difficult to measure (though it can be approximated by, for example, measuring proximity to formal financial services outlets). Access, by definition, is always larger than usage so the numbers here put a lower bound on access. Being undeserved does not necessarily mean that these populations lack access. This is especially true for low income populations who lead active financial lives, and choose to use informal financial instruments even though they have access to formal services. Informal tools offer flexibility and convenience that might be missing from more structured financial services. However, informal financial services lack the reliability (e.g., consistent quality and availability), security (e.g., insured savings accounts, sound insurance), affordability and value (e.g., lower interest rates, positive real interest on savings), and potential for scale that formal financial services offer. The challenge in expanding use for policymakers and financial providers is how to provide financial services that match the flexibility afforded by informal tools, and are also reliable, secure, affordable and value-creating on a large scale.

The challenge in expanding use for policymakers and financial providers is how to provide financial services that match the flexibility afforded by informal tools, and are also reliable, secure, affordable and value-creating on a large scale.

Adults and households: Honohans data uses the concepts of adults

and households interchangeably. We realize that policymakers and financial providers might value the estimates differently. For many policymakers, especially those concerned about financial inclusion as a tool for poverty alleviation, household-level data may be more appropriate due to the focus on how many families can benefit from formal financial services. Financial services providers may care about households for some products (e.g., credit), while others, such as savings accounts, payments products or health insurance, may be relevant at the individual level. Honohans data sources provide a mix of household-level and adult-level information. Some of the surveys are based on household units (such as those from the LSMS program); others, such as Finscope, use individual adults as the unit.(Honohan 2008, 2496) In the future, it could be helpful to get usage data at both the household and adult levels in a comparative way, to correct for a potential bias where data at the household level suggests more widespread usage than is taking place (e.g., if there are two adults in each household, and in half of all households one adult is using financial services, household data could tell us that 50% of households are using financial services, while only 25% of adults are using services).

Key Findings
COUNTING THE UNBANKED To obtain the total number of adults who do and do not use financial
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services, we multiplied the percentage of adults who use financial services in each country from Honohans study with the number of adults in each country based on 2005 population data. In 2005, out of a total world population of 6.4 billion people, 4.7 billion were adults. As illustrated in Figure 1, only 2.2 billion of these adults used some form of formal financial services to borrow and/or save. 2.5 billion adults, just over half of the worlds adult population, did not use any formal financial services.
Figure 1: 2.5 billion adults globally do not use formal or semi-formal financial services
Adults who use and do not use formal or semi formal financial services globally Billions of adults 2.2 4.7

2.5

Total adult population

Use financial services

Do not use financial services

McKinsey & Company | 1

SOURCE: Honohan, 2008; Human Development Index; World Bank

We had complete adult population and usage data for 95% of the population. To conduct the analysis for the remaining countries for which we had adult data but no data on usage, we used a scaling-up approach, as shown in Table 2. We first conducted the analyses for all countries with complete data. We created a multiplier for each region (e.g., East Asia, Latin America, Sub-Saharan Africa) by dividing adult population for all countries by adult population for countries with complete data. We then multiplied the usage data drawn from countries with complete data with this multiplier to get the complete usage data for all countries. Another way to measure financial access is to focus on supply side data. The Financial Access 2009 report by the Consultative Group to Assist the Poorest (CGAP, 2009) does just that. CGAP uses new data from a survey of financial regulators from 139 countries to estimate the number of unbanked adults in the world. They begin by counting the total number of deposit accounts in countries and then dividing by three (a rough estimate of the number of deposits per banked adult world-wide). The result from
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this approximation is that 2.8 billion adults are unbanked, a number which is very similar to ours. Wherever possible, data on households or individuals seems most appropriate for measuring financial usage, but it is helpful to know that a supply-side approach yields similar results. WHERE ARE THE UNBANKED? Figure 2 depicts the geographical distribution of the adults who do not use formal financial services. The figure plots the number and percentage of unserved adults against the following regions: East Asia, South Asia, Sub-Saharan Africa, Latin America, Central Asia and Eastern Europe, Arab States and High income OECD countries. Nearly all of the 2.5 billion unserved adults live in Africa, Asia and Latin America. For these regions, the total percentage of unserved adults climbs to 60% of the adult population. The greatest number of unserved adults, almost 1.5 billion, reside in East and South Asia. In Sub-Saharan Africa 80% of the adult population, 325 million people, remains unserved, as compared to only 8% in high income OECD countries.
Figure 2: Nearly all of the worlds financially unserved adults live in Africa, Asia and Latin America
Adults who do not use formal financial services1 Millions of adults East Asia South Asia Sub-Saharan Africa Latin America Central Asia and Eastern Europe Arab States High income OECD Total
1 Regional groupings based on UN Human Development Index SOURCE: Honohan, 2008; Human Development Index; World Bank McKinsey & Company |

In Sub-Saharan Africa 80% of the adult population, 325 million people, remains unserved, as compared to only 8% in high income OECD countries.

Percent of total adult population that is financially unserved

876 612 326 250 193 136 60 2,455

59 58 80 65 49 67 8 53

WHO ARE THE UNBANKED? Given that financial inclusion is a stated goal for most governments, estimating the depth of financial services is a useful first step for policymaking. We examined usage by income distribution with the help of one strong, conservative assumption. We divided countries population into two segments: the percentage of
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population living on more than $5 a day and the percent living on less than $5 per day. We assumed a positive 1-to-1 correlation between use of financial services and income level, meaning that financial usage starts with those above $5 per day. This is an inherently conservative approach to estimating how far downmarket financial services provision goes, since it is unlikely that every adult living on more than $5/day uses formal financial services. We use India as an example in Figure 3 to illustrate our approach: In 2005 India had 760 million adults Using Honohan estimates, we knew that 48% of these adults, 365 million, used formal or semi-formal financial services We assumed that financial services usage begins top-down, meaning that the first set of adults to use formal services were the richest adults Approximately 20m adults live on more than $5/day, PPP-adjusted. We assume that all of the adults who live on more than $5/day are included in the ~365m adults who use financial services We then assume that the remainder of adults using financial services live on less than $5/day This means that roughly ~345m adults live on less than $5/day and use formal financial services
Figure 3: We have taken a conservative approach to estimating the depth of financial services penetration
Methodology used to estimate the profiles of the banked and unbanked Indian adult population by income segment Percent, 100% = 760 million adults (15+ years old), 2005 <$5/day 97% 2 Place line at point equivalent to total access to financial services, and assume all adults use financial services up to this line and no adults use them below it. Estimate usage by income segment 3% >$5/day 48% of Indians use formal financial services, according to Honohan, 2008 1 Segment Indias population by income segment, using PPP-adjusted HDI data

Estimated number of adults using formal financial services in India Millions of adults 365 345 20

Using financial services and earning < $5/day

Using financial services and earning > $5/day

Use financial services

McKinsey & Company | 6

SOURCE: Honohan, 2008; Human Development Index; World Bank

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We applied the same approach to countries in Africa, Asia and the Middle East. We omitted high-income OECD countries, Central Asia and Eastern Europe, and Latin America because of the relatively small percentage of the population living on less than $5/day, PPP-adjusted, in comparison to the amount of financial services usage. Figure 4 depicts the number of adults who live on less than $5/day and more than $5/day in East Asia, South Asia, Sub-Saharan Africa and the Middle East who use formal financial services. The news is not all bad. In these regions, 1.2 billion adults use formal financial services. About 800 million adults, two-thirds of the served population, actually live on less than $5/day. In South Asia alone financial providers serve 396 million low income adults (mostly in India). The key message from these analyses is that hundreds of millions of adults living on less than $5/day are already being reached with formal financial services. Serving these segments at scale is not only possible, but to a large extent, is already happening.
Figure 4: Hundreds of millions of adults who use financial services live on less than $5/day, PPP-adjusted
Adults who use formal financial services Billions of adults
<$5/day, PPP-adjusted >$5/day, PPP-adjusted

Serving adults living on less than $5/day at scale is not only possible, but to a large extent, is already happening.

East Asia

332

283

614

South Asia

396

45 441

Sub-Saharan Africa

56 25 81

Arab States

26 45 73

SOURCE: Honohan, 2008; Human Development Index; World Bank McKinsey & Company | 3

DRIVERS OF INCLUSION We compared the data on financial services usage separately with national levels of per capita income and urbanization to identify possible drivers of financial inclusion through a standard correlation. Our dataset included complete data for 102 countries in Africa, Arab states, Asia and Latin America. We did not include the high-income OECD countries or Central Asia and Eastern Europe because we wanted to focus on the poorest countries.
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Levels of financial inclusion are not determined by socioeconomic or demographic factors alone. Figure 5 plots the percentage of population who use formal financial services against GDP per capita (we had GDP per capital data for 94 of the 102 countries). We found a moderate to strong positive correlation between usage levels and per capita income across countries. Figure 6 plots the percentage of population who use formal financial services against level of urbanization. We found a weak positive relationship between use of services and urbanization.5 Many countries do not fit the overall pattern. For example, India and Thailand appear to be countries with relatively low per capita income and a large rural population, but have greater use of financial services than many relatively richer and more urban countries. These findings support the idea that countries can improve levels of financial inclusion by creating effective regulatory and policy environments and enabling the actions of individual financial services providers.
Figure 5: There is a moderate to strong relationship between GDP per capita and usage of financial services
Correlation between levels of financial inclusion and GDP per capita for Arab states, Africa, Asia and Latin America (for countries with complete data)

Effective regulatory and policy environments can improve levels of financial inclusion.

Relationship between GDP per capita and financial services

Percentage of population using financial services 0 20 40 60

All countries

Malaysia Thailand Chile

India

CostaRica Mexico

Argentina

Kenya

Pakistan Nicaragua

5,000

10,000 GDP per capita (PPP, 2005)

15,000

20,000

The red line indicates the linear prediction. SOURCE: Honohan, 2008; Human Development Index; World Bank
McKinsey & Company | 4

5. The coefficient of correlation between percentage of population using financial services and GDP per capita is 0.64 and the coefficient of correlation between percentage of population using financial services and urbanization is 0.36. Both are statistically significant at 1%.

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Figure 6: There is a weak positive correlation between usage of financial services and urbanization
Correlation between levels of financial inclusion and urbanization for Arab states, Africa, Asia and Latin America (for countries with complete data)

Relationship between urban population and financial services

Percentage of population using financial services 0 20 40 60

All countries

Malaysia SriLanka Thailand Chile

India

Mexico

Argentina

Kenya Tanzania

Pakistan Nicaragua

20

40 60 Percentage of urban population

80

100

The red line indicates the linear prediction.

SOURCE: Honohan, 2008; Human Development Index; World Bank McKinsey & Company | 5

Improving Data
The quality of these analyses hinge largely on the quality of Honohans cross-country data on financial services usage. This data is widely cited and is used in Finance For All, the World Banks 2008 publication on access to financial services. We constructed an alternate measure for twelve countries using more recent select financial services country-specific data from domestic news sources and others analyses. The countries account for about 2 billion people, almost one-third of the worlds population.6 In general, Honohans data held up well against this anecdotal testing. Using these alternate financial measures, we estimate 2.4 billion adults who do not use formal financial services compared to our original estimate of 2.5 billion. The number of unserved adults in Asia, Africa, the Middle East and Latin America drops from 2.2 billion to 2.1 billion. Relatively speaking, these differences are small and do not change the fundamental findings. Another consideration is that our estimates are based on population data from 2005. Given the rapid pace of change in financial inclusion over the last four years, it is likely that our analysis using Honohans data underreports the amount of financial inclusion today.

6. The countries were Botswana, Brazil, India, Indonesia, Kenya, Mexico, Namibia, Nigeria, South Africa, Tanzania Uganda, and Zambia. The alternate data sources included Finscope Africa surveys, Reserve Bank of India report, World Bank survey on Brazil, Business Latin America article and Bank Rakyat of Indonesia study.

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We use his data across countries even where other data was available, however, to ensure quality and consistency. And even at the extreme, if financial inclusion had increased globally by as much as 20% in the last four years, there would still be 2 billion adults who do not use any formal credit or savings products today. We undertook this analysis to create a reasonable estimate of financial services usage. This effort, even with its limitations, provides a quantitative starting point for future studies on the nature and amount of usage of financial services.

Conclusion
This study brings together available data to frame important debates on financial inclusion. The findings are striking: 1) approximately 2.5 billion adults do not currently use financial services, about half of the worlds adults; 2) existing practice shows that it is possible to serve low income populations at wide scale. Yet, billions of people, and especially those who live on under $5/day, are not using formal financial services. This can inhibit their ability to build wealth, increase their income and manage uncertainty. This is just a start. Updating and refining these analyses (and perhaps even refuting them) requires more detailed household and/or adult-level data. In the next few years we expect that there will be better household data that can help identify gaps and pin down numbers more firmly. Those efforts are crucial if policymakers are to realize their ambitions to spur the creation of new markets and expand access to the under-served.

References

Honohan, Patrick (2008). Cross-country variation in household access to financial services. Journal of Banking and Finance 32, May: 2493-2500. World Bank (2008). Finance for All? Policies and Pitfalls in Expanding Access. World Bank Policy Research Report. Washington DC: World Bank. Consultative Group to Assist the Poorest [CGAP] (2009). Financial Access 2009: Measuring Access to Financial Services around the World. September.

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Table 1: Country-level data on adult population from United Nations Human Development Index, financial service usage from Honohan 2008, and income data from World Banks PovCal Net.
Source HDI 2007/8 "Build your own tables" Population (m, 2005) 25.1 3.2 32.9 16.1 38.7 3 20.3 8.3 8.4 0.3 0.7 153.3 0.3 9.8 10.4 0.3 8.5 0.6 9.2 3.9 1.8 186.8 0.4 7.7 13.9 48 7.9 14 17.8 32.3 0.5 4.2 10.1 16.3 HDI 2007/8 "Build your own tables" Calculated Popolation < 15 (m, 2005) 13.303 2.3584 23.1616 8.6296 28.4832 2.376 16.3415 6.9886 6.2748 0.2172 0.5159 99.3384 0.2433 8.2614 8.632 0.1872 4.743 0.402 5.6948 3.2136 1.1592 134.8696 0.2816 6.6374 7.4782 34.896 4.3371 8.736 10.3596 26.6152 0.3025 2.4066 5.4338 12.2413 Honohan (2008) Calculated HDI 2007/8 "Build your own tables" GCP per capita (PPP, $ Intl, 2005) No data No data 7062 2335 14280 No data No data No data No data 18380 No data 2053 0 No data No data 7109 1141 0 2819 No data 12387 8402 No data No data 1213 0 699 2727 2299 No data 5803 1224 No data 12027 HDI 2007/8 "Build your own tables" Urban (%, 2005) No data No data 0.633 0.533 0.901 No data No data No data No data 0.904 No data 0.251 0.527 No data No data 0.483 0.401 0.111 0.642 No data 0.574 0.842 No data No data 0.183 0.306 0.1 0.197 0.546 No data 0.573 0.38 No data 0.876 PovCal Net (World Bank) PovCal Net (World Bank)

Country

Use of financial services (%, adults) No data 34% 31% 25% 28% 9% No data 96% 17% 53% No data 32% 56% 16% 97% 46% 32% 16% 30% 17% 47% 43% No data 56% 26% 19% 17% 20% 24% 96% 40% 19% No data 60%

Adults using financial services (m) No data 0.801856 7.180096 2.1574 7.975296 0.21384 No data 6.709056 1.066716 0.115116 No data 31.788288 0.136248 1.321824 8.37304 0.086112 1.51776 0.06432 1.70844 0.546312 0.544824 57.993928 No data 3.716944 1.944332 6.63024 0.737307 1.7472 2.486304 25.550592 0.121 0.457254 No data 7.34478

< $5/day (%) No data 0.5924 0.7644 0.9134 0.2846 0.9296 No data No data 0.7584 No data No data 0.9777 No data 0.1229 No data No data 0.9667 0.862 0.6088 0.1718 0.819 0.3931 No data 0.3673 0.9748 No data 0.9941 0.9461 0.9095 No data 0.7951 0.9731 0.9786 0.2509

< $5/day (year of data) No data 2005 1995 2000 2006 2003 No data No data 2005 No data No data 2005 No data 2005 No data No data 2003 2003 2005 2004 1993.9 2007 No data 2003 2003 No data 2006 2004 2001 No data 2001 2003 2002.5 2006

Afghanistan Albania Algeria Angola Argentina Armenia Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bhutan Bolivia Bosnia and Herzegovina Botswana Brazil Brunei Darussalam Bulgaria Burkina Faso Burma Burundi Cambodia Cameroon Canada Cape Verde Central African Republic Chad Chile

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Source

HDI 2007/8 "Build your own tables" Population (m, 2005) 1313 4.3 18.6 4.6 11.3 10.2 23.6

HDI 2007/8 "Build your own tables" Calculated Popolation < 15 (m, 2005) 1029.392 3.0788 10.8438 3.887 9.1304 8.6904 17.8888

Honohan (2008)

Calculated

HDI 2007/8 "Build your own tables" GCP per capita (PPP, $ Intl, 2005) 6757 10180 1648 No data 0 No data No data

HDI 2007/8 "Build your own tables" Urban (%, 2005) 0.404 0.617 0.45 No data 0.755 No data No data

PovCal Net (World Bank)

PovCal Net (World Bank)

Country

Use of financial services (%, adults) 42% 29% 25% 42% 45% 85% No data

Adults using financial services (m) 432.34464 0.892852 2.71095 1.63254 4.10868 7.38684 No data

< $5/day (%) 0.8006752 0.3573 0.8644 0.0059 No data 0.0104 No data

< $5/day (year of data) 2005 2005 2002 2005 No data 1996 No data

China Costa Rica Cte d'Ivoire Croatia Cuba Czech Republic Democratic People's Republic of Korea Denmark Djibouti Dominican Republic Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Fiji Finland France Gabon Gambia Georgia Germany Ghana Greece Grenada Guatemala Guinea GuineaBissau Guyana Haiti Honduras Hong Kong

5.4 0.8 9.5 13.1 72.8 6.7 0.5 4.5 1.3 79 0.8 5.2 61 1.3 1.6 4.5 82.7 22.5 11.1 0.1 12.7 9 1.6 0.7 9.3 6.8 7.1

4.3848 0.492 6.3175 8.8294 48.5576 4.4153 0.288 2.565 1.1024 43.845 0.5368 4.2952 49.776 0.8333 0.9408 3.6495 70.7912 13.725 9.5127 0.0658 7.2263 5.094 0.8416 0.4823 5.766 4.08 6.0279

99% No data 29% 35% 41% 26% No data 12% 86% 14% 39% 99% 96% 39% 21% 15% 97% 16% 83% 37% 32% 15% No data 20% 15% 25% 38%

4.340952 No data 1.832075 3.09029 19.908616 1.147978 No data 0.3078 0.948064 6.1383 0.209352 4.252248 47.78496 0.324987 0.197568 0.547425 68.667464 2.196 7.895541 0.024346 2.312416 0.7641 No data 0.09646 0.8649 1.02 2.290602

No data No data 8217 4341 4337 5255 7874 1109 No data 1055 6049 No data No data 6954 1921 No data No data 2480 No data 7843 4568 2316 No data 4508 1663 3430 No data

No data No data 0.668 0.628 0.428 0.598 0.389 0.194 No data 0.16 0.508 No data No data 0.836 0.539 No data No data 0.478 No data 0.306 0.472 0.33 No data 0.282 0.388 0.465 No data

No data 0.8668 0.4722 0.4391 0.8478 0.5398 No data No data 0.2205 0.9817 No data No data No data 0.6885 0.8927 0.7828 No data 0.9063 No data No data 0.6267 0.9812 0.9758 0.5785 0.9294 0.6312 No data

No data 2002 2006 2007 2004.5 2005 No data No data 2004 2005 No data No data No data 2005 2003 2005 No data 2005.5 No data No data 2006 2003 2002 1998 2001 2006 No data

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Source

HDI 2007/8 "Build your own tables" Population (m, 2005) 10.1 0.3 1134.4 226.1 69.4 28 4.1 No data 58.6 2.7 127.9 5.5 15.2 35.6 2.7 5.2 5.7 2.3 4 2 3.4 5.9 3.4 0.5 2 18.6 13.2 25.7 0.3 11.6 3 1.2 104.3 0.1 3.9 2.6 0.6 30.5

HDI 2007/8 "Build your own tables" Calculated Popolation < 15 (m, 2005) 8.5042 0.2337 760.048 161.8876 49.4128 16.38 3.2513 No data 50.396 1.8441 110.1219 3.454 11.5216 20.4344 2.0574 3.588 3.4314 1.9688 2.856 1.192 1.8054 4.1123 2.8288 0.4075 1.606 10.4532 6.9828 17.6302 0.198 6.0668 1.791 0.9072 72.1756 0.0614 3.12 1.8486 0.4824 21.2585

Honohan (2008)

Calculated

HDI 2007/8 "Build your own tables" GCP per capita (PPP, $ Intl, 2005) No data No data 3452 3843 7968 0 No data No data No data 4291 No data 5530 No data 1240 No data No data No data No data No data 3335 0 0 No data No data No data 923 667 10882 No data 1033 No data 12715 10751 No data No data 2107 No data 4555

HDI 2007/8 "Build your own tables" Urban (%, 2005) No data No data 0.287 0.481 0.669 0.669 No data No data No data 0.531 No data 0.823 No data 0.207 No data No data No data No data No data 0.187 0.581 0.848 No data No data No data 0.268 0.172 0.673 No data 0.305 No data 0.424 0.76 No data No data 0.567 No data 0.587

PovCal Net (World Bank)

PovCal Net (World Bank)

Country

Use of financial services (%, adults) 66% No data 48% 40% 31% 17% 88% No data 75% 59% No data 37% 48% 10% No data 1% No data 64% 79% 17% 11% 27% 70% 99% 20% 21% 21% 60% No data 22% 16% 54% 25% No data 13% 25% No data 39%

Adults using financial services (m) 5.612772 No data 364.82304 64.75504 15.317968 2.7846 2.861144 No data 37.797 1.088019 No data 1.27798 5.530368 2.04344 No data 0.03588 No data 1.260032 2.25624 0.20264 0.198594 1.110321 1.98016 0.403425 0.3212 2.195172 1.466388 10.57812 No data 1.334696 0.28656 0.489888 18.0439 No data 0.4056 0.46215 No data 8.290815

< $5/day (%) 0.0622 No data 0.9730299 0.9306022 0.4952 No data No data No data No data 0.4032 No data 0.4706 0.7079 0.8197 No data 0.9304 0.9761 0.1654 No data 0.8982 0.994 No data 0.2228 No data 0.3115 1 0.9876 0.476 No data 0.9693 0.873 No data 0.3364 No data 0.8368 0.9342 No data 0.6582

< $5/day (year of data) 2004 No data 2004.5 2005 2005 No data No data No data No data 2004 No data 2006 2003 2005.4 No data 2004 2002.2 2004 No data 2002.5 2007 No data 2004 No data 2003 2005 2004.3 2004 No data 2006 2000 No data 2006 No data 2004 2005 No data 2007

Hungary Iceland India Indonesia Iran Iraq Ireland Israel Italy Jamaica Japan Jordan Kazakhstan Kenya Kuwait Kyrgyz Republic Laos Latvia Lebanon Lesotho Liberia Libyan Arab Jamahiriya Lithuania Luxembourg Macedonia Madagascar Malawi Malaysia Maldives Mali Mauritania Mauritius Mexico Micronesia Moldova Mongolia Montenegro Morocco

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FINANCIAL ACCESS INITIATIVE FRAMING NOTE

Half the World is Unbanked

Source

HDI 2007/8 "Build your own tables" Population (m, 2005) 20.5 2 27.1 16.3 4.1 5.5 13.3 141.4 4.6 2.5 158.1 3.8 3.2 6.1 5.9 27.3 84.6 38.2 10.5 0.8 47.9 21.6 144 9.2 0.2 0.1

HDI 2007/8 "Build your own tables" Calculated Popolation < 15 (m, 2005) 11.439 1.218 16.531 13.3008 3.2185 3.4155 6.916 78.7598 3.6984 1.655 99.2868 2.0558 2.2272 3.6234 3.7878 18.6186 53.9748 31.9734 8.8515 0.6264 38.9906 18.2088 122.256 5.198 0.1442 0.0707

Honohan (2008)

Calculated

HDI 2007/8 "Build your own tables" GCP per capita (PPP, $ Intl, 2005) 1242 7586 1550 No data No data 3674 781 1128 No data 15602 2370 0 7605 2563 4642 6039 5137 No data No data No data No data No data No data 1206 6707 6568

HDI 2007/8 "Build your own tables" Urban (%, 2005) 0.345 0.351 0.158 No data No data 0.59 0.168 0.482 No data 0.715 0.349 0.716 0.708 0.134 0.585 0.726 0.627 No data No data No data No data No data No data 0.193 0.276 0.459

PovCal Net (World Bank)

PovCal Net (World Bank)

Country

Use of financial services (%, adults) 12% 28% 20% 100% No data 5% 31% 15% 84% 33% 12% 14% 46% 8% 30% 26% 26% 66% 84% No data 63% 23% 69% 23% 40% 45%

Adults using financial services (m) 1.37268 0.34104 3.3062 13.3008 No data 0.170775 2.14396 11.81397 3.106656 0.54615 11.914416 0.287812 1.024512 0.289872 1.13634 4.840836 14.033448 21.102444 7.43526 No data 24.564078 4.188024 84.35664 1.19554 0.05768 0.031815

< $5/day (%) 0.9896 0.8172 0.9616 No data No data 0.7222 0.98 0.9782 No data No data 0.9603 No data 0.4528 0.8815 0.4641 0.5378 0.8347 0.2146 No data No data No data 0.4649 0.2602 0.9861 0.8453 No data

< $5/day (year of data) 2002.5 1993 2003.5 No data No data 2005 2005 2003.7 No data No data 2004.5 No data 2006 1996 2007 2006 2006 2005 No data No data No data 2005 2005 2000 1995 No data

Mozambique Namibia Nepal Netherlands New Zealand Nicaragua Niger Nigeria Norway Oman Pakistan Palestine Panama Papua New Guinea Paraguay Peru Philippines Poland Portugal Qatar Republic of Korea Romania Russian Federation Rwanda Saint Lucia Saint Vincent and the Grenadines Samoa So Tom and Prncipe Saudi Arabia Senegal Serbia Sierra Leone Singapore Slovakia Slovenia

0.2 0.2 23.6 11.8 9.9 5.6 4.3 5.4 2

0.1184 0.1168 15.458 6.8204 8.0685 3.2032 3.4615 4.4928 1.718

19% 15% 62% 27% No data 13% 98% 83% 97%

0.022496 0.01752 9.58396 1.841508 No data 0.416416 3.39227 3.729024 1.66646

6170 2178 15711 1792 No data 806 No data No data No data

0.224 0.58 0.81 0.416 No data 0.407 No data No data No data

No data No data No data 0.9354 No data 0.9592 No data 0.0874 0.0076

No data No data No data 2005 No data 2003 No data 1996 2004

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FINANCIAL ACCESS INITIATIVE FRAMING NOTE

Half the World is Unbanked

Source

HDI 2007/8 "Build your own tables" Population (m, 2005) 0.5 8.2 47.9 43.4 19.1 36.9 0.5 1.1 9 7.4 18.9 6.6 38.5 63 1.1 6.2 0.1 1.3 10.1 73 4.8 28.9 46.9 4.1 60.2 299.8 3.3 26.6 26.7 85 21.1 11.5 13.1

HDI 2007/8 "Build your own tables" Calculated Popolation < 15 (m, 2005) 0.2975 4.5838 32.5241 37.1504 14.4778 21.8817 0.351 0.6622 7.434 6.1642 11.9826 3.9996 21.406 49.329 0.605 3.5154 0.0625 1.0114 7.474 52.341 3.2736 14.6234 40.0057 3.2882 49.364 237.4416 2.5146 17.7688 18.3429 59.84 11.4151 6.2445 7.9255

Honohan (2008)

Calculated

HDI 2007/8 "Build your own tables" GCP per capita (PPP, $ Intl, 2005) 2031 No data 11110 No data 4595 2083 7722 4824 No data No data 3808 No data 744 8677 No data 1506 No data 14603 8371 No data No data 1454 No data No data No data No data 9962 No data 6632 3071 930 1023 2038

HDI 2007/8 "Build your own tables" Urban (%, 2005) 0.17 No data 0.593 No data 0.151 0.408 0.739 0.241 No data No data 0.506 No data 0.242 0.323 No data 0.401 No data 0.122 0.653 No data No data 0.126 No data No data No data No data 0.92 No data 0.934 0.264 0.273 0.35 0.359

PovCal Net (World Bank)

PovCal Net (World Bank)

Country

Use of financial services (%, adults) 15% No data 46% 95% 59% 15% 32% 35% 99% 88% 17% 16% 5% 59% 13% 28% No data 53% 42% 49% No data 20% 24% No data 91% 91% 42% 16% 28% 29% 14% 15% 34%

Adults using financial services (m) 0.044625 No data 14.961086 35.29288 8.541902 3.282255 0.11232 0.23177 7.35966 5.424496 2.037042 0.639936 1.0703 29.10411 0.07865 0.984312 No data 0.536042 3.13908 25.64709 No data 2.92468 9.601368 No data 44.92124 216.071856 1.056132 2.843008 5.136012 17.3536 1.598114 0.936675 2.69467

< $5/day (%) No data No data 0.724 No data 0.8618 No data 0.6211 0.9648 No data No data No data 0.9337 0.9999 0.5742 0.9673 0.9647 No data 0.5333 0.5674 0.4349 0.8912 0.9604 0.2369 No data No data No data 0.2808 0.9734 0.4308 0.8975 0.9162 0.9655 No data

< $5/day (year of data) No data No data 2000 No data 2002 No data 1999 2000.5 No data No data No data 2004 2000.4 2004 2001 2006 No data 1992 2000 2005 1998 2005 2005 No data No data No data 2006 2003 2006 2006 2005 2004.3 No data

Solomon Islands Somalia South Africa Spain Sri Lanka Sudan Suriname Swaziland Sweden Switzerland Syria Tajikistan Tanzania Thailand Timor-Leste Togo Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Uganda Ukraine United Arab Emirates United Kingdom United States Uruguay Uzbekistan Venezuela Vietnam Yemen Zambia Zimbabwe

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FINANCIAL ACCESS INITIATIVE FRAMING NOTE

Half the World is Unbanked

Table 2: Total usage of financial services for 149 countries with data on adult population and financial services usage.
Region Adult Population (m) 191.7022 381.8651 1471.1953 588.9427 387.1273 1039.4968 370.0234 4430.3528 Using financial services (m) 63.283081 194.997908 607.900493 539.652729 136.815373 435.756134 74.426923 2052.832641 Not using financial services (m) 128.419119 186.867192 863.294807 49.289971 250.311927 603.740666 295.596477 2377.520159 % using

Arab States Central Asia and Eastern Europe East Asia High income OECD Latin America and the Caribbean South Asia Sub-Saharan Africa Total

33% 51% 41% 92% 35% 42% 20% 46%

Table 3: Total usage of financial services scaled up to 177 countries which had data on adult population but no data on usage.
Region Multiplier to scale-up 1.060321165 1.030965124 1.01476738 1.220591239 1 1.012988015 1.101498986 Adult population (m) 203.2659 393.6896 1492.921 718.8583 387.1273 1052.9978 407.5804 4656.4403 Using financial services (m) 67.10039016 201.0360423 616.8775906 658.6953932 136.815373 441.4157412 81.98118024 2203.921711 Not using financial services (m) 136.1655098 192.6535577 876.0434094 60.16290678 250.311927 611.5820588 325.5992198 2452.518589 % using 33% 51% 41% 92% 35% 42% 20% 47%

Arab States Central Asia and Eastern Europe East Asia High income OECD Latin America and the Caribbean South Asia Sub-Saharan Africa Total

We created a multiplier for each region based on total adult population for all countries (Adult population column in Table 3) divided by adult population for each region from Table 2. We used this multiplier to scale up the figures for financial services usage. For example, for Arab States, we first divided adult population 203 m (Table 3) by 188 m (Table 2) to obtain the multiplier 1.07. We then multiplied the figure for the population using financial services 58 m in Table 2 with 1.07 to obtain the 63 m adults using financial services in all 177 countries.

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FINANCIAL ACCESS INITIATIVE FRAMING NOTE

Half the World is Unbanked

Table 4: Usage by income for countries with usage and income data.
Region Adult population (m) 115.3208 1386.8666 1039.4968 358.5089 2900.1931 Usage <$5/ day (m) 15.90756064 308.128521 391.0915648 48.9139094 764.0415558 Usage >$5/ day (m) 25.48714036 262.618309 44.6645692 22.0031356 354.7731542 Total served (m) 41.394701 570.74683 435.756134 70.917045 1118.81471 # of countries with data 6 10 7 36 59

Arab States East Asia South Asia Sub-Saharan Africa Total

Table 5: Scaled-up usage by income data for all countries.

Region Multiplier to scale-up 1.762612642 1.076470513 1.012988015 1.136876658 Adult population (m) 203.2659 1492.921 1052.9978 407.5804 3156.7651 Usage <$5/ day (m) 28.03886749 331.691267 396.1710679 55.60908184 811.5102842 Usage >$5/ day (m) 44.92395581 282.7008658 45.2446733 25.01485126 397.8843461 Total served (m) 72.96282 614.3921 441.4157 80.62393 1209.395

Arab States East Asia South Asia Sub-Saharan Africa Total

Figures scaled up to cover all of Arab States, East Asia, South Asia, and Sub-Saharan Africa. Similar approach as described in Table 2.

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