The low-income population represents the 4 billion people in the world who live on less than $10 per day. This population is predominantly located in developing countries, with a large concentration in Africa, Asia and Latin America. The low-income population is estimated to have a collective purchasing power of over $5 trillion, making it a potentially lucrative market for businesses that can effectively serve this population.
Financial inclusion contributes to the health and efficiency of the economy and is a lever of poverty reduction. It is at the heart of 10 of the 17 SDG goals with evidence showing that financial inclusion can support overall economic growth and the achievement of broader development goals. Worldwide, account ownership reached 76 per cent of the global adult population in 2021. However, 1.4 billion adults are still unbanked – women, poor adults, the less educated and those outside the labor market continue to be underserved.
Extreme poverty is way off track to meet SDG1 – to end extreme poverty by 2030. Globally, there are about 682 million people (8.5% of the world population) living in extreme poverty. Extreme poverty is increasingly concentrated in Sub-Saharan Africa. In 2022, 62% of people living in extreme poverty lived in Sub-Saharan Africa. 1.8 billion people were living on less than $3.65 a day; and 4.2 billion people were living on less than $6.85 a day.
THE WORK WE DO TO SUPPORT THE LOW INCOME:
- Design social benefits programs, which can be disbursed digitally to deepen financial inclusion. Among adults account holders in developing economies, 865 million opened their first account to receive money from the government, including 423 million women. Globally, about 85 million unbanked adults received government payments in cash.
- Work with regulators to develop Consumer Protection Frameworks that encompass clearer guidelines about effective disclosure and pricing transparency to help build trust in the financial systems.
- Work with relevant stakeholders to develop financial literacy programs aimed at improving knowledge of the benefits of account ownership, consumer protection risks such as high and hidden fees, over-indebtedness, fraud, etc. Thereby fostering financial resilience and well-being.
- Through our Alchemy Labs, partner with financial institutions to develop a range of innovative micro products (i.e., micro pensions micro savings, micro loans, etc.) that are affordable and accessible and meet the needs of low-income earners.
- Support governments, telecommunications providers and financial institutions to create an enabling environment that makes digital payments safer, more affordable and transparent than cash-based alternatives.