More than 50% of the population across emerging Asia still unbanked

But financial inclusion in emerging Asia has visibly progressed since 2011.

According to BBVA, the past five years have seen visible progress in deepening financial inclusion by economies in emerging Asia. As per World Bank’s Global Findex database, India saw robust growth in bank account ownership amongst adults (ages 15+) between 2011 and 2014 from 35% to 53%, which translates into 175 million newly banked over the period. India alone accounted for 25% of the 700 million new bank account holders between 2011 and 2014.

The expansion of new bank account holders in India has gained further traction over the past year (2014-2015) driven by the Prime Minister’s Jan Dhan Yojana (PMJDY), an initiative to accelerate financial inclusion. Indonesia too has seen a significant increase in bank account ownership between 2011 and 2014 from just 20% to 36%. 

Here's more from BBVA:

While all countries across emerging Asia have seen an improvement in banking penetration since 2011, the extent of account ownership differs widely across the region. Malaysia has the largest share of banked population (81%), followed by Thailand (78%), India (53%), Indonesia (36%), Vietnam (31%), and the Philippines (28%). 

Thus, on average, more than 50% population across most emerging Asian economies is still unbanked, in necessitating policymakers to step up regulatory reforms and enhance efforts in removing barriers to financial inclusion.

Financial inclusion is, however, beyond just expanding account ownership. The value of financial inclusion can only be realized if people actively use their bank accounts for basic banking services such as deposits, withdrawals and transfers and avail of various other beneficial services attached to the account.

Authorities need to ensure that existing bank accounts are not dormant, i.e. with zero deposits or no withdrawals in the past 12 months, by providing incentives to increase bank accounts use. For example, authorities could facilitate people’s access to bank accounts through banking agents and point of sales machines. The intensity of bank account use is the lowest in India and Thailand, which suggests that most accounts that are opened are never used.