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Why India’s Unbanked Could Be Drivers of the Formal Economy

While most professionals are used to having bank accounts and credit cards, an enormous number of the world’s population is completely locked out of these modern tools of prosperity. Only 70% of the world is fully engaged in the global economy, with some sort of banking relationship in place to conduct business and personal finance.

The other 30% — often called the global “unbanked” — are out in the cold. Prime Minister Narendra Modi of India compared being unbanked to social exclusion: He acknowledged in 2014 that the only way to reduce poverty is to “get rid of financial untouchability.”

That may finally be changing, thanks to concerted efforts from governments as well as from financial technology companies looking for new customers. If it works, the net result will be a sharp reduction in global poverty and rising standards of living for the global poor.

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