Financial Inclusion in EM: Look Who's Banking Now

Under-banked with Promising Potential

How productive can you be without access to credit? Only 63% of adults in emerging countries have a bank account
either at a financial institution or through a mobile money provider, compared to 94% of adults in developed markets. That’s around 1.7 billion adults who are classified as unbanked.

This represents a considerable catch-up opportunity as governments use technology to push their citizens into
the formal economy, which, in turn, provides people with collateral, credit, and access to life changing financial tools and services. At the same time, financial inclusion should cut the inefficiencies of corruption and also improve tax collections for governments, which decreases fiscal deficits, benefits credit ratings, lowers the cost of borrowing, and boosts investment.

 

Capitalizing on Financial Inclusion

Financial inclusion represents a key driver for economic growth across emerging markets. From the micro side, it empowers individuals and companies to establish credit, borrow, and invest. On the macro side, it formalized economies, improves tax collections, reduces fiscal deficits, and improves country credit profiles. For investors, financial inclusion creates attractive long-term investment opportunities based on both secular growth and idiosyncratic developments across financials, technology, housing, healthcare, retail, and education sectors.