More than a billion people alive today have never held a bank account. They cannot save formally, cannot receive a digital payment, and cannot access credit through any institution. For them, a financial shock such as a medical bill, a failed harvest, or a sudden job loss arrives without any buffer. That is not just personal hardship. It is an economic constraint operating at global scale.
An estimated 1.4 billion adults worldwide remain unbanked, lacking even basic financial accounts. The gap is narrowing, but unevenly, and the hardest populations to reach have remained stubbornly outside the system. What has changed in recent years is not the scale of the problem but the tools now available to address it.
Fintech executive Ivo Bozukov has a clear view on why earlier approaches fell short. “We spent decades trying to bring the unbanked into a banking system that was never designed for them,” he says. “Mobile-first digital finance is not an adaptation of that system. It is a different architecture entirely, built from the ground up for people the old system consistently failed.”
The Mobile Money Breakthrough
The clearest evidence for that architectural shift comes from Sub-Saharan Africa. The GSM Association ranks Sub-Saharan Africa as the world leader in mobile banking in terms of live services, subscribers, and transactions, with close to half of the world’s mobile banking accounts based in the region. That dominance did not emerge from mature financial infrastructure. It emerged despite the near-absence of it.
Many areas across the continent leapfrogged straight to mobile banking, meaning that millions of Africans gained access to banking services without ever visiting a traditional branch. The model proved that the branch network, long assumed to be the irreducible foundation of financial access, was simply not necessary. A mobile phone and a basic data connection could substitute for it entirely.
M-PESA is the most cited example, and with good reason. Launched in Kenya, M-PESA reached over 50 million customers across the continent, processing 21 billion transactions in a single financial year with a total transaction value of approximately KSh 35.9 trillion, equivalent to roughly $304 billion at prevailing exchange rates.
Its expansion demonstrates that demand for formal financial services amongst unbanked populations is not the constraint. Access is the constraint. Where access is genuinely lowered, uptake follows at scale.
As Ivaylo Bozoukov puts it: “When someone in Nairobi can send money home to a rural village in seconds, at a fraction of the cost of a traditional transfer, that is not a fintech story. That is a household resilience story. The money arrives before the crisis becomes a catastrophe. That is what genuine financial inclusion looks like in practice.”
Reducing the Real Cost of Exclusion
The economic case for financial inclusion rests on what exclusion actually costs. Transaction fees on informal money transfers, the risk premium attached to cash-based commerce, the inability to smooth household spending across difficult months: these are not abstract losses. They compound across a lifetime and across generations.
Research by J-PAL finds that digital financial services have dramatically improved access to formal accounts, particularly for low-income households and rural populations, and that increased access to digital services has reduced remittance transaction costs, helping households share financial burdens and build resilience during economic shocks.
The savings dimension matters just as much. In 2024, 40% of adults in developing economies saved in a financial account, a 16 percentage-point increase since 2021 and the fastest rise recorded in over a decade, with mobile-phone technology playing a central role in that surge.
These are not marginal gains. They represent a structural shift in how low-income households manage money, plan ahead, and absorb shocks. When access to a savings mechanism is as simple as a mobile phone top-up, the barriers that long kept informal saving dominant begin to fall.
Who Remains Excluded and Why It Matters
Progress has been real, but the distribution of that progress matters. Despite significant gains, 1.4 billion adults still remain outside the formal financial system, with women constituting 55% of the unbanked population and over half of those without accounts concentrated in just eight countries: Bangladesh, China, Egypt, India, Indonesia, Mexico, Nigeria, and Pakistan.
The gender dimension is particularly persistent. Women have historically been disproportionately excluded from the financial system, though the gender finance gap has been narrowing, with women’s account ownership in developing countries rising substantially over the past decade.
Ivo Bozukov sees the demographic concentration of exclusion as both a challenge and a design specification. “The remaining unbanked are not randomly distributed. They share characteristics: rural location, limited literacy, distrust of formal institutions, intermittent income. That is not a reason to give up on inclusion. It is a specification for what the next generation of platforms needs to solve. The services that reach those populations will be built around those constraints specifically, not copied from what works in London or Singapore.”
Financial Inclusion as Economic Imperative
There is a tendency to frame financial inclusion as a humanitarian objective, which it certainly is. But treating it only in those terms understates the economic case. Digital financial services, powered by fintech, have the potential to lower costs by maximising economies of scale, increase the speed, security, and transparency of transactions, and allow for more tailored financial services that genuinely serve lower-income populations.
Financial inclusion has the potential to improve lives and transform entire economies, with the World Bank noting that formal savings in low and middle-income economies reached record levels in 2024. The infrastructure to extend that transformation further already exists: mobile networks, digital wallets, and AI-driven credit assessment tools capable of underwriting borrowers with no formal credit history. What remains is the combination of regulatory will, product design, and distribution strategy needed to reach the final billion.
Ivaylo Bozoukov puts the stakes plainly. “Every person brought into the formal financial system is a net addition to the productive economy. That is not charity. That is growth policy. And the institutions that understand that distinction are the ones that will define what financial infrastructure looks like for the next generation.”
Lynn Martelli is an editor at Readability. She received her MFA in Creative Writing from Antioch University and has worked as an editor for over 10 years. Lynn has edited a wide variety of books, including fiction, non-fiction, memoirs, and more. In her free time, Lynn enjoys reading, writing, and spending time with her family and friends.
