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By Fiona Moore, for ExpatBriefing.com
18 September, 2014
Standard Chartered, a bank, has released a new report that looks at 30 countries' efforts to improve residents' access to banking services. The report presents a heatmap of how the countries fare based on 12 indicators of inclusion, including access to ATM machines, payments made by credit or debit card, savings, and the uptake of loans.
Many emerging countries lag behind on most indicators, with Nigeria, Uganda, Pakistan, Ghana, and Egypt at the bottom of the 30-country list. The report shows that nearly 50 percent or 2.5 billion adults are currently 'unbanked,' many of them living in developing countries in South Asia, Africa, and the MENA region.
The bank found that the highest rates of financial inclusion are found in the USA, followed by South Korea, Canada, the UK, and Germany.
Among large emerging markets, the report says that Brazil does well on indicators of inclusion, noting the number of commercial bank branches, the number of ATMs per 100,000 adults, and the widespread acceptance of cards for payment. It adds that there is a huge divergence across emerging market economies, with East Asian countries in general doing better than countries in Sub-Saharan Africa.
There are pockets of strength even amongst the less financially inclusive countries. About a fifth of adults in Bangladesh, Vietnam, and Thailand have savings at a financial institution. Although working from a very low base, some countries are making significant strides in improving the number of 'banked' adults and have begun offering modern banking sector innovations such as, for example, the use of electronic banking and retail points of sale in Indonesia and Malaysia.
The report also notes rapid growth in the uptake of mobile money or "branchless" banking schemes, such as in Kenya with its M-PESA service. More than two-thirds of the adult population in Kenya use this service, which allows the sending of money through mobile phone applications.
John Calverley, Head of Economic Research, commented: "Removing the physical, bureaucratic and regulatory barriers to financial inclusion remains a challenge for many emerging and developing countries. There is still much more to do, but it is promising that countries are pushing through reforms that are starting to bear fruit and should enable them to move many steps closer to greater financial inclusion."
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