Unbanked

Unbanked is a term for people, usually counted as adults aged 15 or over, who do not have an account with a bank, credit union, microfinance institution or regulated mobile money provider. Without an account, they cannot easily receive wages or government payments electronically, store savings safely, build a credit history or pay bills online, and they depend largely on cash and on informal arrangements with family, moneylenders or savings groups. The term is central to the study and policy of financial inclusion.

Unbanked is often paired with "underbanked", which describes people who have an account but still rely on costly alternatives such as check cashers or payday loans for some needs. The best-known global measure comes from the World Bank's Global Findex database, based on surveys in more than 100 economies. Its 2021 edition estimated that about 1.4 billion adults worldwide were unbanked, most of them in developing economies. A later edition was published in 2025.

Imagine being paid in cash every week, keeping your savings in a tin at home and walking across town to pay each bill in person. Sending money to a relative in another city means asking a bus driver or paying a high fee to a transfer agent. If you need a small loan, you go to a moneylender who charges far more than a bank would. Every step takes more time and costs more money than it would for someone with an account.

That is daily life for many unbanked people. Cash is easy to lose or have stolen, and it leaves no record that could help someone prove income for a loan or a rental. Having an account is not a cure for poverty, but it is often the first step towards safer saving, cheaper payments and access to credit and insurance.

Surveys point to several recurring reasons, and many people cite more than one:

• Too little money. The most common answer in Findex surveys is that people feel they do not have enough money to need an account.
• Cost. Account fees, minimum balances and the cost of travelling to a branch can outweigh the benefits.
• Distance. In rural areas, the nearest branch or cash machine may be far away.
• Documents. Many people lack the identity papers or proof of address that know your customer rules require.
• Trust. Past bank failures, fear of fees or distrust of institutions deter some people.
• Other reasons. Religious concerns about interest, family members already holding an account, or a preference for cash also play a part.

The unbanked are disproportionately women, poorer households, younger adults, people with less formal education and those working in the informal economy. Rich countries have unbanked populations too: in the United States, the Federal Deposit Insurance Corporation estimated that about 4 per cent of households had no bank account in 2023.

Unbanked people often pay more for basic financial services. They may pay fees to cash cheques at a check casher, use money orders to pay bills, and rely on expensive informal lenders. Keeping savings as cash at home exposes them to theft, loss and inflation. Receiving remittances from relatives abroad can involve high fees and travel to collect cash. Governments also find it harder and costlier to deliver social payments, as became clear when many countries tried to send emergency support quickly during the COVID-19 pandemic.

The largest gains in account ownership over the past two decades have come from a few approaches:

• Mobile money. Services that store value on a phone account, such as M-Pesa, launched in Kenya in 2007, allowed millions of people to send and receive money without a bank branch. Mobile money accounts count as accounts in the Findex.
• Agent networks. Shops acting as banking agents let customers deposit and withdraw cash close to home.
• Digital identity. National digital identity systems, such as India's Aadhaar, made it easier to meet identity checks, and tiered rules allow simpler checks for low-value accounts.
• Government programmes. Paying wages, pensions and benefits into accounts encourages people to open them; India's Pradhan Mantri Jan Dhan Yojana, launched in 2014, opened hundreds of millions of basic accounts.

Supporters of cryptocurrency often argue that it can "bank the unbanked", since anyone with a phone and internet access can hold a wallet without asking a bank's permission, and stablecoin payments can move value across borders cheaply. In some countries with high inflation, stablecoins have become a practical way to hold dollar value. Critics reply that many unbanked people lack smartphones, reliable internet or digital skills; that price swings make most crypto unsuitable for savings; that converting crypto to local cash usually requires an exchange with identity checks; and that self-custody puts the risk of lost keys and scams on users with the least protection. Evidence so far suggests that mobile money and simplified bank accounts have done far more to reduce the number of unbanked people than crypto, though digital assets may play a larger role in remittances and dollar savings.

• World Bank Global Findex Database
• FDIC National Survey of Unbanked and Underbanked Households