and 98 percent in the United Kingdom). But there is a sharp difference in account penetration in the poorest income quintile: in the United States 26 percent of adults in this group report having no formal account, while in the United Kingdom only 3 percent do. A 2009 FDIC survey found a similarly large gap in account penetration between rich and poor households in the United States.<sup>7</sup> A comparison with account penetration in the poorest quintile in Australia and Canada—two other countries with Gini coefficients and legal traditions broadly similar to those of the United States— adds further support to the suggestion that factors beyond income inequality help explain the variation in the use of formal accounts.

## **A strong correlation between inequality in the use of formal accounts and inequality in income**

Account penetration in the richest quintile as a multiple of that in the poorest <!-- Start of picture text --> 15<br>• •<br>• •<br>• PARAGUAY<br>10 •<br>• •<br>•<br>• •<br>• • • • •<br>• ••• ••<br>51 • • ••• •• • • ••••• • • • • •• •• • •• •• • • • •••••••• •• ••• • • • •• • •••••• • • • • • • •••• •• • ••• • •••• • ••• • •<br>SWEDEN<br>20 30 40 50 60 70<br>More equal Income inequality Less equal<br>(Gini coefficient)<br><!-- End of picture text --> _Note:_ Data on Gini coefficients are for 2009 or the latest available year. _Source:_ Demirguc-Kunt and Klapper 2012; World Bank, World Development Indicators database.

# VARIATION BY INDIVIDUAL CHARACTERISTICS

Financial inclusion also differs in important ways by individual characteristics such as gender, education level, age, and rural or urban residence. There are significant disparities in account penetration along gender lines. In developing economies 46 percent of men report having an account at a formal financial insti<!-- Start of picture text --> Non-account-holders in the poorest quintile<br>in selected high-income economies<br>1.6 FIGURE<br><!-- End of picture text --> <!-- Start of picture text --> Adults in the poorest quintile without an account<br>at a formal financial institution (%)<br>26<br>WITHOUT<br>ACCOUNT<br>9<br>3 3<br>AUSTRALIA UNITED CANADA UNITED<br>Gini = 33.6 KINGDOM Gini = 32.4 STATES<br>Gini = 34.5 Gini = 37.8<br><!-- End of picture text --> tution, while only 37 percent of women do. These shares reflect the use of both individually and jointly owned formal accounts, as the Global Findex survey captures the use of an account together with a family member.

The gender gap is particularly large in South Asia and the Middle East and North Africa (figure 1.7). But it is relatively small in Sub-Saharan Africa, where 27 percent of men and 22 percent of women report that they have an account.<sup>8</sup> The gender gap is statistically significant in all regions, even when controlling for education, age, income, and countrylevel characteristics.

_Note:_ Data on Gini coefficients are for the latest available year. _Source:_ Demirguc-Kunt and Klapper 2012; Organisation for Economic Co-operation and Development data.

The gender gap in account penetration persists across income quintiles. In developing economies women are

**15**

MEASURING FINANCIAL INCLUSION