China’s share of unbanked population is 2.8x higher than the US
Wednesday, 04 28 2021, Category: Banking, Country: World
Financial inclusion continues to be elusive for most countries, and leading economic giants are accounting for a significant share of the unbanked population.
Data acquired by Finbold indicates about 287 million adults, or 20% of the Chinese population, are unbanked as of Q1 2021. There is a significant difference compared to fellow economic powerhouse the United States, where only 7% of the population or 23.17 million adults are unbanked. Therefore, the Chinese unbanked population is at least over 12 times higher when compared to the US.
Among the top ten most unbanked countries, Morocco ranks top at 71% representing 26.19 million people. Vietnam follows with an unbanked population of 69%, followed by Egypt at 67%. Notably, all the top ten countries have at least half of their population unbanked. The data is provided by British research platform Merchant Machine.
Based on China’s economic standing globally, the 20% unbanked population can be considered significant. However, the figure mainly constitutes people who live in rural areas where a majority have no access to essential financial services like bank accounts. In most cases, these regions lack banking branches. Rural households are also less educated with lower income streams. Additionally, the percentage correlates with the country’s 1.4 billion population.
The United States’ low unbanked population reflects how people are accessing banking services.
There has been a significant shift towards digital solutions powered by high internet and smartphone penetration in recent years. Furthermore, innovations in the banking sector enable citizens to use services from the comfort of their homes.
Overall, the unbanked population data comes in the wake of the ongoing coronavirus pandemic that resulted in an economic meltdown. The devastation on the economy ushered in the perfect conditions that contribute to growth in the unbanked populations. Amid the pandemic, there were massive job losses, especially in the United States, reducing income streams.