COUNTRY BRIEF
India
Leora Klapper, Dorothe Singer,
and Saniya Ansar
The Global Findex Database 2021
In India, 78 percent of adults have an account, a share that is relatively unchanged from 2017, and 6 percentage
points higher than the developing economy average of 71 percent. India has no gender gap in account ownership.
Use of accounts has grown since 2017 driven by digital payments, which 35 percent of adults in India now use.
However, there is still room for growth to reach the developing economy average of 57 percent digital payment
adoption. There is also a signicant usage gender gap of 13 percentage points between men and women using
digital payments. Digitalizing payments could help promote use of accounts for the 160 million banked adults
in India who still pay utility bills in cash. These and other eorts could help decrease India’s share of inactive
accounts, which at 35 percent is 7-times higher than the average calculated for all other developing economies.
India’s account ownership growth has stagnated since 2017, though the
gender gap narrowed
Account ownership has more than doubled in India between 2011 and 2021, from 35 percent of adults to 78
percent (Figure 1). Much of that growth occurred between 2014 and 2017 as a result of a government program
that began in 2014 and provided unbanked adults with a nancial account leveraging an ocial government
identication document. Between 2017 and 2021, account ownership rates were unchanged, yet the Global
Findex 2021 shows that 35 percent of accounts are inactive, a rate that is 7 times higher than the average across
developing economies.
In addition to growing the total share of adults with access to nancial accounts, India has improved equity
in account access. In 2011, the income gap was 14 percentage points—meaning, a larger share of the richest
60 percent of households in India had accounts compared to the poorest 40 percent. By 2021, the gap was
insignicant. The gender gap also declined between 2017 and 2021 by 6 percentage points to eectively zero.
Promoting nancial account use is the next inclusion challenge in India
Evidence on the benets of nancial inclusion consistently point to increased safety and convenience and
decreased costs of using nancial services to make payments, save, manage money, and borrow.
Payments
In India, 35 percent of adults (45 percent of adults with an account) report that they used their account to make
or receive a digital payment in 2021 (Figure 2). This number shows signicant room for growth to be on par
with the 57 percent average of digital payment adoption seen across all developing economies, even to catch
up to regional peers like Bangladesh and Sri Lanka, which have higher digital payment adoption. Within its
peer group of BRICS countries (Brazil, the Russian Federation, India, and China and South African) India’s
payments usage rate is less than half that of its peers. Furthermore, India shows a signicant gender gap in
payment use, as women are 13 percentage points less likely than men to make or receive digital payments. While
there is no gap in account ownership between adults living in rural versus urban parts of India, there is a gap in
use of accounts for digital payments: While 40 percent of adults in urban areas (52 percent of account holders)
use accounts for digital payments, only 30 percent of adults (39 percent of account holders) in rural areas do.
The Global Findex Database 20212
Looking into the types of payments people receive reveals that 20 percent of adults in India received a payment
from the government in the 12-months prior to the survey either as a transfer or pension or in the form of public
sector wages (the Global Findex 2021 data was collected in India between June 30, 2021, and October 18, 2021,
such that the “12-month period” spans from June 30, 2020 and October 18, 2021). More than half of them
received that payment directly into an account. Among the 18 percent of adults in the country who are private
sector wage earners, 34 percent received their wages into an account.
As for the payments people made, merchant payments and utility bill payments are among the most common.
Twelve percent of adults made digital merchant payments using a card, mobile phone, or the Internet. COVID-19
was a major catalyst for digital merchant payments, with 8 percent of adults (two-thirds of everyone who
made digital merchant payments) making their rst digital merchant payment after the start of the pandemic.
Similarly, 10 percent of adults in India paid a utility bill digitally from an account; 7 percent did so for the
rst time after the start of the COVID-19 pandemic. The fact that more than 127 million adults (6 percent of
banked) in India made their rst merchant or utility payment directly from an account during the COVID-19
pandemic points to the digital readiness of the Indian population and the potential for additional growth.
FIGURE 1
India has doubled account ownership since 2011 and eliminated its gender and income gap
Adults with an account (%), 2011–21
Source: Global Findex Database 2021.
Country Brief: India 3
Saving, storying money, and borrowing using an account
The share of adults who saved in any way in India (formally or not) decreased by 10 percentage points since 2017
to 24 percent of adults. Slightly over half of savers—14 percent of adults, down from 20 percent in 2017—used
an account to do so; the rest used semiformal or other mechanisms. Among savers, women are 18 percentage
points more likely than men to save using a savings club: 45 percent of women who save used this method
compared to 27 percent of men. A larger share of 35 percent of adults used an account to store money for cash
management purposes. Here, too, there is an evident gender gap, as 41 percent of Indian men used an account
to store money while only 28 percent of women did so.
Forty-ve percent of adults in India borrowed, yet fewer than one in three of them did so from a nancial
institution, using a credit card, or through a mobile money account; 31 percent of adults (more than 2 in 3
borrowers) borrowed from friends and family. Informal borrowing is evident across South Asia.
Source: Global Findex Database 2021.
2021
2017
2021
2017
2021
2017
2021
2017
2021
2017
2021
2017
2021
2017
2021
2017
Only made
digital payments
Made & received
digital payments
Only received
digital payments
Neither made nor
received
digital payments
China
India
Indonesia
Kenya
Russian
Federation
South Africa
Türkiye
Brazil
FIGURE 2
A growing share of account owners are making and receiving digitial payments in
developing economies
Adults with an account (%), 2011–21
The Global Findex Database 20214
Examining the relationship between different uses of nancial accounts
Nineteen percent of adults in India receive payments into an account. Of those who do, 47 percent use their
accounts to also make payments, 28 percent saved formally, and 53 percent borrowed, suggesting that having an
account and receiving a payment makes it easy to use other nancial services (Figure 3).
FIGURE 3
Receiving a digital payment opens the door to broader engagement with the nancial
ecosystem through making payments, saving, storing, and borrowing money
Source: Global Findex Database 2021.
Note: Inows and usages are shown as percentages of the 19 percent of adults receiving payment(s) into an account.
Country Brief: India 5
FIGURE 4
Family and friends are the most common source of emergency funds in India
Adults identify the source of, and assessing how difcult it would be to access, emergency money (%), 2021
Source: Global Findex Database 2021.
India has low nancial resilience relative to the developing economy
average
Financial resilience is the ability to come up with emergency money to deal with an unexpected expense or loss
of income. In India, only 31 percent of adults could come up with emergency money within 30 days without
much diculty—a share that is 23 percentage points lower than the developing economy average (Figure 4).
Women in India are 14 percentage points less likely than men to be able to access emergency money with little
to no diculty. Furthermore, when asked about their nancial worries, 66 percent of adults in India report that
they are very worried about not having enough money to pay for medical costs, while 28 percent saying that
medical costs are their biggest worry—an unsurprising response given the severe impact COVID-19 has had
on the country.
Evidence on nancial resilience across developing economies shows that adults that have formal savings and
use them as the rst-line option for emergency money are more resilient than people who turn to less reliable
sources, such as friends and family or additional work hours. This points to the potential for savings to help
improve resilience in India, especially given the low and declining formal savings trends.
Source: Global Findex Database 2021.
The Global Findex Database 20216
Payments represent a proven opportunity to increase nancial inclusion
for both unbanked and underbanked adults in India
There continue to be a number of barriers to nancial inclusion for the 22 percent of adults in India who remain
unbanked. Chief among them is a lack of nancial condence: more than 70 percent of unbanked adults in
India say they would not be able to use an account at a nancial institution without help; unbanked women
are 10 percentage points more likely than unbanked men to express a lack of nancial condence. Another
common barrier cited by unbanked adults is distance to a nancial institution: 43% of adults in India say banks
are too far away, a 10 percentage point higher share than the developing economy average. This latter barrier can
be addressed by expanding agent and digital banking.
Digitalizing government payments and wage payments is a proven method in India for increasing account
ownership: two thirds of account owners in the country opened their rst account to receive either a
government payment or a wage payment. Millions more still receive private- or public-sector wages or payments
for agriculture goods in cash. Digital payments may be an eective way to reach a share of them. Additionally,
research has shown that new account holders who receive wage payments into their accounts develop nancial
capability independently, creating a case for digital payments as a tool to facilitate “learning by doing”.
Delivering payments directly to accounts also may encourage owners of inactive accounts to use them. This
is a critical nancial inclusion challenge in India given the 35 percent inactive account rate (meaning, those
accounts had no deposits or withdrawals, nor had any incoming or outgoing digital payments, in the year prior
to the survey). The gender gap for inactive accounts is 9 percentage points: 32 percent of women have an inactive
account, compared with 23 percent of men. Digitalizing utility payments and merchant payments could increase
the use of nancial accounts in India, given that more than 160 million banked adults in the country paid their
utility bills in cash—including 84 million women—and 670 million banked adults in India paid merchants only
in cash—including about 350 million women. Furthermore, for banked adults with inactive accounts, distance
from a nancial institution, lack of trust in nancial services rms, and lack of need for nancial services were
among the most common reasons for why they did not use them (Figure 5). Promoting digital payments and
other services, such as online account access to check balances—which 16 percent of Indian adults use—could
be a step towad increasing usage by banked adults who live too far from a branch.
FIGURE 5
In India, distance to nancial institutions, lack of trust, and lack of need were the
most commonly cited reasons for account inactivity
Adults with an inactive account reporting barrier as reason for not using account (%), 2021
Source: Global Findex Database 2021.
Country Brief: India 7
Any eorts to increase use for banked adults and inclusion for unbanked adults must consider the availability and
reliability of enabling infrastructure, such as identication documents, as well as energy and telecommunications
access (including mobile phones). For example, 66 percent of adults report having their own mobile phone,
including 75 percent of men and 56 percent of women. Technology, such as phones and access to the internet,
can be leveraged to boost both access to and use of nancial products. However, eorts to reduce the gender gap
are necessary for inclusive access to digital nancial services.
Financial inclusion initiatives must also consider the nancial capability of the users, given the common feeling
among unbanked people in India that they could not use an account by themselves. These future account
owners will need eective onboarding and ongoing product education to gain benet from an account and
avoid fees, inappropriate products, or exploitation. Improved digital literacy, data security, and grievance
mechanisms could increase the share of adults who use digital transactions, as well as reduce the large number
of inactive accounts.
About Findex
Since 2011, the Global Findex Database has been the denitive source of data on the ways in which adults
around the world use nancial services, from payments to savings and borrowing, and manage nancial events
such as a major expense or a loss of income. The 2021 edition is based on nationally representative surveys of
about 125,000 adults in 123 economies during the COVID-19 pandemic. In India, 3,000 adults across the
country took the survey in their preferred language (Assamese, Bengali, Gujarati, Hindi, Kannada, Malayalam,
Marathi, Odia, Punjabi, Tamil, or Telugu) between July 30 and October 18, 2021. The database, the full text
of the report, and the underlying economy-level data for all gures — along with the questionnaire, the survey
methodology, and other relevant materials — are available at http://www.worldbank.org/globalndex.
All regional and global averages presented in this publication are adult population weighted. Regional averages
include only developing economies (low- and middle-income economies as classied by the World Bank).
The Global Findex Database 20218
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