benefits of having a bank account are well
documented. People with accounts are better able to start businesses. Women
who get paid into an account spend more money on their children's health and
education. When faced with unemployment or the loss of a breadwinner, a savings
account can be the difference between destitution and stability.
we can add another item to that list: owning an account makes you happier. In
fact, the impact of account ownership on personal happiness is roughly the same
as getting married.
this sounds like a tricky thing to measure, it is. Here's how it’s done: First,
we used data from Gallup
World Poll surveys on wellbeing. Every year, Gallup researchers ask
people around the world to rate their own happiness on a scale of one to ten.
They also discuss their recent positive experiences (‘did you smile yesterday’)
and negative experiences (‘did you worry yesterday’).
we spliced Gallup's data with the Global Findex database, which tracks
how many adults worldwide own accounts, save money, and make digital payments. The
results were striking: We found that people who have an account or saved in the
past year tend to be happier than those who do not, regardless of differences
in income, age, gender, and education. And women seem to get a bigger boost
data doesn't tell us how the connection works, but it's not hard to see how
having an account makes life better for women, especially in poor countries. In
rural Zambia, a teacher has to shut down the schools in her village two days a
month so she can make a bus trip to the capital and collect her wages in cash. This
is not only costly, inconvenient, and unsafe; it steals valuable instructional
time from students. Women who have their salaries wired into an account are
spared this frustration.
could also be a factor. For example, people who save money might be more optimistic
and excited about the future. They might also get a boost in wellbeing by
working towards a saving goal, like investing in education or starting a
Having an account and a safe place to save
also gives people greater assurance, and an effective insurance, for the future
and their ability to weather unemployment, medical emergencies, or death of a
the challenge for women is that they're less likely than men to have an account
at the starting gate. Fifty-nine percent of men in the developing world have an
account compared to just 50 percent of women, according to the Global Findex. The gap
ranges from a low of 4 percentage points in East Asia and the Pacific to a high
of 18 percentage points in South Asia, but it is significant everywhere. And when it comes to using digital financial
services like mobile money, which is linked to an account in their name, women
are adopting by the millions in countries like India and Tanzania, but they
still lag men globally in adopting and trying these new ways of managing their
way to close this gap is to target working women who, like the schoolteacher in
Zambia, need an account for practical reasons. Women's employment is tightly
linked to account ownership: In the developing world, about half of women who
work for wages or are self-employed have an account. The regional leader is
Latin America, where about 60 percent of wage earners are paid digitally. Much
more needs to be done, however: about 300 million unbanked adults receive wage
payments in cash, including 120 million women.
addition to providing these women a safe and convenient way to receive
payments, accounts would open new opportunities to save money and build credit
history. Demand for appropriate savings options is widespread in the emerging
world, with about 40 million unbanked women in Sub-Saharan Africa saving through
informal groups or by keeping cash under the mattress. If those funds were
moved into accounts, they'd accrue interest and be less susceptible to impulse
spending by profligate relatives.
countries where the right regulations and technical infrastructure are in place
to support bringing low-income people into a digital financial service world
using accounts, the possibilities to better smooth consumption and improve
household outcomes are large. The evidence shows that when we economically
empower a poor woman, she invests more in education, nutritious food and
healthcare for her family.
digital financial connections between governments and their citizenry who have
accounts can streamline and improve the way payments are made to and from the
poor. Less leakage along the way means more money in poor peoples’
pockets. Research shows that in
developing countries, digitization will add trillions of dollars to GDP that
currently is floating around in unaccounted for cash transactions in the informal
payments isn't an exercise in philanthropy, as businesses have plenty of
selfish reasons to abandon cash. A factory owner in Bangladesh closes his
factory for two days a month just to dole out cash payments. He fills a truck
with the equivalent of over $2 million worth of $5 notes, hauls it out to the
factory gates, and pays his employees one by one. No doubt, paying these people
into an account would make everyone happier.