WASHINGTON, November 16, 2010 – The World Bank and the Bill & Melinda Gates Foundation today launched a new effort to better understand how the world’s poor save, borrow and make payments.
Through an $11 million, 10-year grant from the Bill & Melinda Gates Foundation, the World Bank’s Development Research Group will, for the first time, build a global database that allows researchers to measure and compare how individuals use bank accounts and other financial products – if they are available at all. The Gates Foundation provided the funds to cover three rounds of data collections, and the World Bank has already signed a contract for next year with Gallup, Inc., to interview at least 1,000 people per country in 150 countries about their finances through the Gallup World Poll.
“Financial inclusion is an important policy goal because access to financial services can improve the lives of the poor,” says Asli Demirguc-Kunt, Senior Research Manager at the Development Research Group and chief economist of the Bank's Financial and Private Sector Development Network. “Systematically measuring the use of financial services can be the first step in identifying gaps and spurring policy interventions to expand access.”
In most developing countries, less than half of the population has an account at financial institutions, according to a report by the Development Research group. The number is even lower in many countries in sub-Saharan Africa, with less than one in five households owning an account. By contrast, nearly everyone has a financial account in some of the richest countries.
Policy makers and researchers need comparable, systemic survey data on financial access, especially information directly from consumers, but data are costly and time consuming to collect and analyze. The new World Bank public database will fill this information gap by documenting financial access across gender, age, geographic regions, national income levels and other indicators.
"The goal of the project is to reliably measure financial inclusion in a consistent manner over a broad range of countries over time," says Leora Klapper, the project's director and Senior Economist at the Development Research Group. "This public database could facilitate a holistic approach to the financial problems of the poor and can be used to track global policy and the progress to improve access to financial services."
The World Bank will add to the Gallup World Poll a broad set of questions on the use of savings, credit, insurance and payment services, targeting the poor. For example, do they have a bank account? What is the distance to the nearest bank branch? Do they borrow money from an informal money lender? Do they buy life or health insurance?
The overall Gallup World Poll constitutes a continuous survey that provides a scientific window into the thoughts and behaviors of 98 percent of the world’s population.
“Systematically listening to the needs of seven billion people will advance our understanding of financial inclusion as much or more than any recent breakthrough,” says Jon Clifton, Deputy Director of the Gallup World Poll.
This grant was announced today by Melinda French Gates at the Global Savings Forum in Seattle, Washington, as a part of the foundation’s $500 million pledge to expand access to savings accounts and help the world’s poor build financial security. The pledge included a package of six grants, totaling $40 million, from the foundation’s Financial Services for the Poor initiative, to support projects and partnerships that will bring quality, affordable savings accounts and other financial services to the doorsteps of the poor in the developing world.
“Savings doesn’t just help people mitigate the risks posed by a medical emergency or a bad crop,” said Gates at the foundation-hosted event. “It also gives them the ability to marshal their resources to build something better for themselves and their children. It allows them to fund their own businesses, to look ahead with confidence. Savings helps families to take the giant leap from reacting to events to planning for a healthier, happier future.”
World Bank: Merrell Tuck-Primdahl, (202) 473.9516
Gallup, Inc: Eric Nielsen, (202) 715.3030
About the World Bank’s Development Research Group
The Development Research Group, part of the Development Economic Vice Presidency, is the World Bank’s research department. Our analytic work spans the developing world and all sectors of development. For more information, visit http://econ.worldbank.org/research.
For 75 years, Gallup’s global reputation for delivering relevant, timely, and visionary research on what people think and feel has been the organization's cornerstone. Gallup's research and consultants continue to assist leaders in identifying and monitoring behavioral economic indicators worldwide. For more information, go to www.gallup.com.