The number of unbanked individuals across the globe dropped 20 per cent after 700 million people became account holders at banks, other financial institutions, or mobile money service providers between 2011 and 2014.

According to the World Bank’s Global Findex report released yesterday, technology is the driving force behind the growing number of banked individuals.

Speaking at the launch of the report, Jim Yong Kim, the World Bank president, said the drop in the unbanked population is a great step towards the hugely ambitious goal of universal financial access by 2020.

Between 2011 and 2014, the percentage of adults with an account increased from 51 to 62 per cent, indicating a 13 per cent increase, mainly driven by the growing number of account holders developing countries.

Anand Sanjeev, the mananaging director of I& M Bank - Rwanda, agreed with the analysis, explaining that indeed, technology has given way to new forms of banking such as electronic banking, mobile money and internet banking.

But, according to the World Bank, even though there is remarkable progress, there is still a large population that is unbanked and this is an indicator that there’s still more to do to deepen financial inclusion.

"This effort will require many partners - credit card companies, banks, microcredit institutions, the United Nations, foundations, and community leaders. But we can do it, and the payoff will be millions of people lifted out of poverty,” Sanjeev said.

In Rwanda, less than 50 per cent of the population are banked in the formal financial sector, and the plan is to have at least 80 percent by 2017 and encourage cashless transactions in the economy.

"So it’s technology that will help reduce the unbanked population,” Sanjeev added.

The World Bank report singles out mobile money service as the major factor behind the increase in account holders in sub-Saharan Africa, hence deepening financial inclusion.

"Mobile money accounts in sub-Saharan Africa are helping to rapidly expand and scale up access to financial services. Along with these gains, data also show big opportunities for boosting financial inclusion among women and poor people,” the report reads.

Lawson Naibo, the chief of operations for Rwanda’s largest financial institution, Bank of Kigali, also agreed with the report, noting that over the past few years, every bank has registered some kind of expansion whether in accounts or branch presence.

"For example, in 2009, we had about 50,000 accounts, today, we are talking about 300,000 and the number of our branches as well as Automated Teller Machines (ATMs) has increased. We have over 800 agency bankers across the country,” Naibo added.

However, according to financial technology experts, achieving the target for banked populations will require connecting the banks to mobile money services considering the high penetration rates of mobile technology.

The three top telecom companies in Rwanda – MTN, TIGO and Airtel – all provide mobile money services; however, full integration with the banks has not been smooth and policy makers may have to weigh in following reports of slow progress.

According to Global Findex, financial inclusion means having an account that allows adults to store money and make and receive electronic payments. It’s also regarded as a critical step towards ending global poverty.

Some studies have concluded that broader access to, and participation in, the financial system can boost job creation, increase investments in education, and directly help poor people manage risk and absorb financial shocks.

However, the 2014 Findex found that there is still more work to be done to expand financial inclusion among women and the poorest households.

The index shows that more than half of adults in the poorest 40 per cent of households in developing countries were still without accounts in 2014 and that the gender gap in account ownership has not reduced.

"In 2011, 47 per cent of women and 54 per cent of men had an account; in 2014, 58 per cent of women had an account, compared to 65 per cent of men. Regionally, the gender gap is largest in South Asia, where 37 per cent of women have an account compared to 55 per cent of men (an 18 percentage point gap),” the report points out.

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