The World Bank Global Findex

The Bill & Melinda Gates Foundation-funded Global Findex (GF) database is the benchmark for “Measuring Financial Inclusion and the FinTech Revolution.” Published first in 2011 by the World Bank (WB), the Global Findex is the comprehensive global database depicting the adult behaviour pertaining to saving, borrowing, payments, and risk management. The Global Findex data is collated in association with Gallup, Inc. (a global analytics and advice firm), comprising detailed survey insights of over 150,000 adults in 140 economies. The latest Global Findex is the 2017 edition (published in April 2018), including revised indicators on reception to and utilisation of official and casual financial services. Also included is the new data on the utilisation of FinTech (mobile phones and the internet to initiate financial transactions).

Global Findex: The World Scenario

On a global scale, the Global Findex 2017 revealed that from 2014 to 2017, 51.4 crore new accounts have come into existence. It also reported that, as of 2017, 69% of adults around the world hold a bank account. The same period was also recorded to account for a significant elevation in the number of smartphone and internet users using their devices and digital connection facilities to make financial transactions (paying, or receiving digital money). However, the Global Findex 2017 reveals that still 1.7 billion adults (nearly half of which largely emanate from the seven developing economies: Bangladesh, China, India, Indonesia, Mexico, Nigeria, and Pakistan) do not hold a bank account (or even an account through a mobile payment provider). But, it was also reported that, worldwide, two-thirds of those 1.7 billion adults have a smartphone (potential to access digital banking). Some of the primary reasons cited by adults of not having a financial institution account were: i. lack of enough money to deposit. ii. cost of account opening and maintenance. iii. distance to travel and reach the institution. iv. no necessity to open multiple accounts in a single family (when one family member already holds an account).

Global Findex: The Case of India

In the case of India, the Global Findex 2017 stated that Pradhan Mantri Jan Dhan Yojana (PMJDY) has resulted into the opening from India of 55% (of 51.4 crore new bank accounts opened globally from 2014—2017) of all new bank accounts in the world. As per the Global Findex Database, 11% of the world’s unbanked adults are in India. The World Bank Global Findex report suggests that the percentage of adult bank account subscribers in India increased to 80% in 2017 from 53% in 2014.

Interestingly, the Global Findex 2017 report also states that the PMJDY policy of the government has declined the gap in bank account possession among rich and poor—from 15% in 2014 to 5% in 2017. In India, according to the report, the biometric identification cards system introduced by the government has contributed significantly also in making the financial services accessible to women (the gender gap in this sphere now is only 6%, compared to 20% in 2014). Notably, as per the Global Findex report, the misappropriation of the funds for pension payments in India got reduced by 47% upon resorting to making such payments using the biometric smart cards in lieu of cash payments.