Sub-Saharan Africa is home to over 57% of unbanked adults, an alarming figure that illustrates a real obstacle to the financial inclusion so often cited by many economies, according to a new analysis by the World Bank.
The cause? “The lack of supporting documents, including identity cards.
As for the impact of mobile money in the region, by 2022 an average of 28% of adults will have a mobile money account, a remarkable figure given the average of 13% of developing economies with a mobile money account.
When it comes to financial well-being in sub-Saharan Africa, the analysis shows that only 41% of adults are financially resilient.
The proportion of resilient women is even lower, at 35% versus 46% of men.
Furthermore, the inability to prove one’s identity leads to numerous difficulties. For example, in 10 of the 13 economies where the rate of identity card ownership is below 70%, the adults concerned are unable to buy a SIM card. A SIM card is essential for using a cell phone, and therefore for digital connectivity.
Experts from the institution point out that digital means of identification are becoming increasingly widespread as governments deploy online verification systems.
As such, they can overcome the barriers of cost and distance and, provided they are framed by standards and regulations, they can also reduce the risks of cybercrime and enable easy and secure access to dematerialized services and payments.
By way of illustration, Uganda saved around US$7 million in one year by verifying the identity of its civil servants using its new national identification database.
In Malawi, the merger of the electoral registration system and the national identification system reduced expenditure by 44 million US dollars.
Administrative obstacles to adult banking in sub-Saharan Africa!
Although a major obstacle, the lack of an identity card alone does not prevent adults in the region from banking.
Adults also come up against far-reaching obstacles.
In the face of the region’s decried failure of digital security, financial providers often need additional proof (such as water or electricity bills) to comply with their customer due diligence requirements.
As a result, having a national identity card is not enough to open a bank account.
Flory Musiswa