Financial Inclusion: How Banks Can Serve the Unbanked Population

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Rethinking the Role of Banking in a Disconnected World

The global financial system, despite its technological marvels and trillion-dollar flows, remains paradoxically inaccessible to over a billion adults worldwide. These “unbanked” are not merely numbers—they are entrepreneurs with untapped potential, families locked out of upward mobility, and communities whose economic participation is stifled by structural neglect. In my decades of research and experience at the intersection of real estate, global investment, and economic innovation, I have observed that the quest for financial inclusion is not just a moral imperative, but a pragmatic strategy for sustainable economic growth and global stability.

As we transition toward a digital-first economy—one where value creation, payment systems, and wealth management are increasingly decentralized—the banking sector stands at a pivotal crossroad. Banks are uniquely positioned to transform exclusion into opportunity, using digital innovation to unlock latent economic value in underserved markets. This article explores actionable strategies for banks to bridge the financial divide, focusing on digital banking, mobile payments, and microfinance as keystones for meaningful inclusion.

1. The Unbanked: Context, Causes, and Economic Consequences

To understand the urgency and complexity of financial inclusion, we must first confront the realities faced by the unbanked. According to the World Bank’s latest Global Findex Database, over 1.4 billion adults remain outside the formal financial system, predominantly in emerging markets, rural regions, and marginalized urban communities. The reasons are multifaceted:

• Lack of Accessible Financial Infrastructure: Physical bank branches are often distant, especially in rural areas of Africa, Asia, and Latin America.

• Documentation Barriers: Many lack formal identification, making account opening impossible under traditional compliance frameworks.

• High Costs and Minimum Balances: Even where banking exists, fees and minimum requirements deter low-income individuals.

• Distrust and Lack of Financial Literacy: Past experiences with predatory lending or informal financial systems create skepticism toward formal banks.

The macroeconomic consequences are profound. The unbanked have limited access to credit, insurance, and savings mechanisms—restricting entrepreneurial growth, heightening vulnerability to shocks, and reinforcing cycles of poverty. For investors, policymakers, and global institutions, the exclusion of a significant portion of humanity from formal finance represents not only lost opportunity, but also a latent source of systemic instability.

2. Digital Banking: The Gateway to Universal Access

The digital revolution has fundamentally altered the calculus of financial inclusion. Where once the physical presence of banks was a limiting factor, digital banking platforms now enable the extension of services to even the most remote or marginalized populations.

a. Removing Physical Barriers

Mobile-first banking solutions, such as Kenya’s M-Pesa or India’s Paytm, have proven that it is possible to leapfrog legacy infrastructure and deliver financial services at scale. Digital onboarding, e-KYC (Know Your Customer) protocols leveraging biometrics, and cloud-based account management have dramatically reduced the cost and complexity of reaching new customers.

b. Lowering Costs and Increasing Flexibility

Digital banks operate with lower overhead and are able to offer no-fee accounts, micro-savings products, and tailored services to users who would otherwise be excluded by traditional banks’ cost structures. Through automation and data-driven credit scoring, digital lenders can provide microloans and flexible products without the high administrative costs that have historically made serving the unbanked unprofitable.

c. Building Trust Through Transparency

The transparency inherent in digital transaction records, coupled with intuitive user interfaces and robust consumer protection policies, can overcome distrust and create positive banking experiences for first-time users.

3. Mobile Payments: The Great Equalizer

Perhaps the most disruptive force in the quest for financial inclusion is the proliferation of mobile payments. With mobile phone penetration exceeding 70% globally (even in many low-income countries), mobile payment systems bridge the gap between informal cash economies and formal financial networks.

a. Ubiquity and Ease of Use

Mobile payment platforms allow users to store value, send and receive funds, and pay for goods and services with unprecedented convenience. For unbanked populations, mobile wallets often serve as their first entry point into the formal financial system.

b. Enabling Commerce and Entrepreneurship

Access to mobile payments empowers small business owners, farmers, and gig workers to transact beyond local cash economies, access broader markets, and build credit histories that can support future financing.

c. Integration with Public Services

Increasingly, governments and NGOs are leveraging mobile payments to deliver social benefits, subsidies, and emergency relief directly to individuals—reducing leakage, enhancing accountability, and accelerating economic stimulus in times of crisis.

4. Microfinance: Unlocking Entrepreneurial Potential

Microfinance, when implemented with discipline and vision, remains a cornerstone of financial inclusion. By extending small loans, micro-insurance, and savings products to those excluded from traditional credit systems, banks and microfinance institutions (MFIs) empower individuals to build businesses, smooth consumption, and invest in education and health.

a. Beyond Microcredit: Toward Holistic Financial Services

The next generation of microfinance is not just about lending—it’s about integrating micro-savings, micro-insurance, and even micro-investment products that enable the unbanked to weather shocks, invest in growth, and accumulate assets.

b. Leveraging Technology for Scale and Efficiency

Banks and MFIs are now leveraging AI-driven credit scoring, digital onboarding, and mobile disbursement to dramatically reduce costs and reach customers at scale, all while maintaining prudent risk controls.

c. Impact on Community Development

Research consistently shows that microfinance, when responsibly deployed, can catalyze community-level development, boost female entrepreneurship, and create resilient local economies. Banks have a unique opportunity to forge public-private partnerships and integrate financial education into microfinance programs, ensuring that gains are both sustainable and inclusive.

5. Strategic Insights: The Path Forward for Banks

For banks seeking to serve the unbanked profitably and sustainably, a multi-pronged strategy is essential:

• Partnerships with Telecoms and Fintechs: Banks should form alliances with mobile operators, payment networks, and fintech startups to co-develop digital solutions, leverage existing distribution networks, and accelerate customer acquisition.

• Regulatory Innovation: Working with policymakers to develop inclusive, risk-based compliance frameworks—such as tiered KYC requirements or digital ID systems—can lower barriers for marginalized groups while maintaining system integrity.

• Product Innovation: Designing products that reflect the realities of unbanked users—irregular incomes, low savings, need for micro-insurance, and preference for cash—will drive adoption and engagement.

• Financial Literacy and Trust-Building: Banks must invest in financial education, community outreach, and local agent networks to demystify banking and establish enduring trust relationships.

6. The Global Economic Case for Financial Inclusion

The benefits of financial inclusion are not confined to the individuals who gain access—they reverberate across economies. The IMF and World Bank estimate that widespread financial inclusion can boost GDP by up to 14% in developing economies, drive entrepreneurship, and foster greater economic resilience.

For global investors, the expansion of formal financial networks into new markets creates investable opportunities in fintech, real estate, infrastructure, and consumer markets. For policymakers, inclusion reduces vulnerability to shocks, enhances tax revenues, and supports more effective governance.

At ALand, we have observed how financial inclusion catalyzes real estate development, encourages responsible investment, and creates more vibrant, resilient communities. It is no exaggeration to say that the future of sustainable economic growth hinges on our collective ability to bring the unbanked into the formal fold.

From Vision to Action

Financial inclusion is not a charity project; it is a foundational pillar for a stable, innovative, and prosperous global economy. The banking sector’s willingness to embrace digital transformation, forge unconventional partnerships, and design for the realities of the unbanked will determine not only its social relevance, but also its commercial success.

The path forward is clear: banks must become enablers of opportunity, architects of trust, and engines of economic empowerment. In doing so, they not only unlock the human potential of the world’s most underserved, but also build a more resilient and prosperous future for all.

About Dr. Pooyan Ghamari

Dr. Pooyan Ghamari is a Swiss Economist, Global Thought Leader, and Founder of the ALand Platform—a pioneering hub for real estate, digital innovation, and economic development. Renowned for his expertise in global macroeconomics, real estate markets, and international finance, Dr. Ghamari has shaped investment strategies and policy frameworks across continents. His deep analysis of financial trends, digital inclusion, and emerging markets continues to influence decision-makers, investors, and policymakers worldwide. As an advocate for financial decentralization and sustainable economic growth, Dr. Ghamari’s vision bridges the gap between innovation and inclusion, unlocking new pathways for prosperity and global resilience.

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