Omanye Payment Account White Paper

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Aiding unbanked

An estimated 2.5 billion working-age adults globally have no access to the types of formal financial services delivered by regulated financial institutions. For example in Sub-Saharan Africa only 24% of adults have a bank account even though Africa’s formal financial sector has grown in the recent years. Estimated unbanked in the US is 43 million and UK, 1.54 million.

Some consumers are unbanked for a variety of reasons. These include: a poor credit history or outstanding issue from a prior banking relationship, a lack of understanding about the banking system, a negative prior experience with a bank, language barriers for immigrant residents, a lack of appropriate identification needed to open a bank account, or living paycheck to paycheck due to limited and unstable income.

In June 2011, the US FDIC sponsored the second National Survey of Unbanked and Underbanked Households to collect data on the number of U.S. households that are unbanked and underbanked, their demographic characteristics, and their reasons for being unbanked and underbanked.

Some of the key overall findings from the 2011 include:

8.2 percent of US households are unbanked. This represents 1 in 12 households in the nation, or nearly 10 million in total.

The proportion of unbanked households increased slightly since the 2009 survey. The estimated 0.6 percentage point increase represents an additional 821,000 unbanked households.

20.1 percent of US households are underbanked. This represents one in five households, or 24 million households. The 2011 underbanked rate in 2011 is higher than the 2009 rate of 18.2 percent, although the proportions are not directly comparable because of differences in the two surveys.

29.3 percent of households do not have a savings account, while about 10 percent do not have a checking account.

Underbanked consumers have either a checking or savings account, but also rely on alternative financial services. The FDIC estimates that the underbanked population includes about 43 million adults and 21 million households. These households use non-bank money orders or non-bank check-cashing services, payday loan institutions, rent-to-own agreements or pawn shops on a regular basis. Blacks, Hispanics and Native Americans are the most likely Americans to be underbanked.

 

Click here to read how Omanye can tackle these issues through various solutions. 

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