The International Monetary Fund (IMF) has intimated that the number of commercial bank branches have remained relatively stable at 2013 level in developing economies.
In a recent report released by the IMF, a chart of figures showing the number of commercial bank branches per 100,000 adults indicates that for low-income countries, commercial bank branches hover around 3 and then middle-income economies have about 15 retail outlets.
This affirms the fact that lately most commercial banks are moving from the traditional forms of banking hence investing less in building more branches and focusing more on enhancing digital platforms to bridge financial access gap.
“These trends likely reflect the recent rise of non-branch retail agent outlets and digital financial service such as mobile money and mobile and internet banking which continue to play a significant role in advancing financial access especially in low- and middle-income countries,” the IMF revealed.
Digital financial services have received more attention to the detriment of retail banking outlets during the current pandemic because they promote “high market penetration and minimal physical contact to transact that support undisrupted financial transactions”.
Despite progress made with the use digital financial services, challenges of financial access still remain, the IMF whined adding that mostly women and small and medium-sized enterprises (SME) have often been excluded from the financial system as “lending to SMEs continues to be constrained”.
“Progress made in closing the financial access gender gap varies across countries with microfinance institutions playing an important role in satisfying the unmet demands of financial services for women in some economies”.
Detailing further the number of deposit accounts and loan accounts with commercial banks per 1,000 adults, the IMF reveals that deposit accounts keep soaring high increasing from a little below 200 in 2013 to approximately 400 in recent years for low-income countries and then slightly above 1000 to about 2000 for the same period in middle-income countries.
Loan accounts on the other hand seem to remain fairly stable over the years lingering below 100 and 500 for commercial banks per 1000 adults in low-and middle- income countries, correspondingly.
Also, regarding the use of Automated Teller Machines (ATMs), the “number of ATMs per 100,000 adults has grown for the past few years,” the IMF mentioned with low-and middle-income countries recording levels 5 and 45 as against previous levels of 4 and 40, respectively.
Overall, access to and usage of financial services, has deepened over time in low- and middle-income economies, the IMF said.
“The progress made in getting people into the folds of the financial system, especially in low-and middle-income economies, has been made possible, in part, through innovations such as digital financial services, including mobile money.
“Mobile money has taken deep root in both sub-Saharan Africa and Asia, providing financial services to the underbanked and unbanked populations in these regions”.
In Ghana for instance, a recent data released by the Central Bank shows that the value of mobile money transactions grew by GHS 29.6 billion between October 2019 and October 2020 translating into an increase in the value of mobile transactions from GH¢28.4 billion to GH¢58.0 billion in the same period.
