Government and social payments through banks could bring millions of people in the banking system

Aurel Dragan 18/06/2018 | 14:36

Million people around the world could be brought to the formal financial system, that being the banking system, if the governments would decide to make the social payments through the digital system, according to a World Bank report on financial inclusion.

The data in 2017 show that around 100 million people worldwide are not banked and receive various government payments in cash (wages, pensions and social benefits). World Bank experts say digitization of government payments would increase the number of people holding a bank account.

Among adults who already have a bank account, about 80 million (including 35 million women) opened their first bank account to receive public sector wages. About 140 million bank account holders (including 80 million women) opened their first account to receive government transfers, and another 120 million adults opened their first bank account to receive public sector pensions.

“In Europe and Central Asia, digitization of public sector pensions could have a significant impact, and in Russia and Ukraine about a quarter of non-banked adults receive such cash payments.” In Romania about one-third are in a similar situation “the World Bank report said.

According to World Bank data, 58% of adults in Romania have a bank account, the gap between men and women being nine percentage points. While globally fewer than one percent of adults receive public wages in cash alone, in Romania, the percentage of the wage-earning population is the largest in the region.

The World Bank’s Global Findex report also shows that there are only six countries in the world where women have more bank accounts than men, namely Argentina, Georgia, Indonesia, Laos, Mongolia and the Philippines.

WB has analyzed in 140 countries the financial behavior of adults in terms of access to banking services, payments, savings, loans and risk management.

Globally, for women, there is a lower level of banking: 65% of them have an account, while for men the percentage is 72%. This 7% difference has remained unchanged since 2011. The World Bank report reports that since 2011, about 1.2 billion people have opened a global bank account and that the number of clients has increased from 62% to 69% between 2014 and 2017.

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