What is Global Findex?
- In 2011 the World Bank—with funding from the Bill & Melinda Gates Foundation —launched the Global Findex database.
- It is the world’s most comprehensive dataset on how adults save, borrow, make payments, and manage risk.
- The Global Findex database covers more than 140 economies around the world. Till now, three rounds of Global Findex was released
- The initial survey round was followed by a second one in 2014 and by a third in 2017.
How it is calculated?
- The index is compiled by using nationally representative surveys of more than 150,000 adults age 15 and above in over 140 economies.
- This year Global Findex also includes updated indicators on various parameters like access to and use of formal and informal financial services of different countries.
- It has additional data on the use of financial technology (or fintech), including the use of mobile phones and the internet to conduct financial transactions. The data reveal opportunities to expand access to financial services among people who do not have an account—the unbanked—as well as to promote greater use of digital financial services among those who do have an account
Important facts related to India:
- The recent index shows that total number of current and savings accounts in banks has risen to 157.1 crore in March, 2017, compared with 122.3 crore two years .
- In India most of the adults are using their bank accounts for transacting more purposes and restricting the use of cash which is a behavioural shift that could help improve the government’s tax revenues
- 4/5th of Indian adults have opened bank accounts by 2017. It is just 53% in 2014, when the NDA government came to power. The share was just 35% of the adults in 2011.
- As the number of account holders in the country increased leads to the rapid increase in financial inclusion that has taken place in India.
- The index also pointed out the availability of bank accounts, debit cards and mobile connections in India, which would be critical in improving the account usage in India in future
- The index also pointed that, in India the leakage of funds for pension payments dropped by 47 percent compared to payments were made through biometric smart cards rather than being handed out in cash.
- A sizable 36% of account owners in India are already using their accounts to make or receive digital payments
- The index mentioned the success of the Jan Dhan Yojana which is the government’s pet project that is aimed at bringing the masses within the formal banking system of India.
How it is useful?
- The Global Findex database has become a important tool of global efforts to promote financial inclusion.
- In addition the index is being widely mentioned by scholars and development practitioners, Global Findex data are used to track progress toward the World Bank goal of Universal Financial Access by 2020 and the United Nations Sustainable Development Goals.
What's trending in BankExamsToday
Smart Prep Kit for Banking Exams by Ramandeep Singh - Download here