Mobile money refers to financial transactions and services that can be carried out using a mobile device such as a mobile phone or tablet. These services may or may not be linked directly to a bank account.
Only 31.1% of accounts are digitally enabled, meaning accounts linked to a card or phone, in India, the World Bank report said, indicating considerable room for growth in digital financial services. Notably, the gender gap in basic access has largely closed: 89.2% of women and 89.9% of rural residents now have accounts.Globally, financial account ownership has reached 79% of the adult population, up from 74% in 2021 and 51% in 2011. In low and middle-income economies (LMIEs), 75% of adults now own accounts. Mobile money, smartphone access, and digital payment systems like India’s own Unified Payments Interface (UPI) are playing a critical role in expanding reach, especially among underserved populations. Yet, despite the progress, 1.3 billion adults worldwide remain unbanked, with over half of them concentrated in just eight countries, including India, the World Bank report showed.
Higher share of inactive accounts
A critical area of concern is account inactivity. Despite its comparatively low rate of active accounts, both the absolute number and the percentage of adults with active accounts in India have increased, the World Bank noted. In India, 14% of adults, or 16% of account holders, have not used their accounts at all in the past 12 months. This is more than double the global average of 6% inactive account holders.
“The share of adults whose accounts are inactive varies across low- and middle-income economies. It is especially high in India, where 14% of adults—16% of account owners—do not have an active account. If India is excluded from the low- and middle-income average, the share of adults who do not have an active account falls to 3%, or 4% of account owners,” the World Bank said.
However, digital usage of accounts remains limited, with just 48.5% of Indian adults having made or received a digital payment in the past year. This is significantly below the LMIE average and well behind digital leaders in the region.
Barriers to account usage also present a different picture compared to most LMIEs. In India, the most common reason for not owning an account is that another family member already has one, a response that suggests potential unmet demand for personal financial autonomy among both men and women, said the World Bank.
Other frequently cited reasons include not having enough money, the cost of financial services, and the physical distance to financial institutions. Each of these factors was mentioned by roughly half of unbanked Indian adults in the World Bank’s survey.
The report highlights encouraging trends in closing gender gaps in active account usage. Between 2021 and 2024, the gender gap in active accounts fell from 12 percentage points to 7. This improvement is largely attributed to the growing digitisation of government payments to women. In 2021, only 13% of women (representing 59% of women receiving government-to-person (G2P) transfers) received them digitally. By 2024, that figure had risen to 24% (or 81% of women G2P recipients), reflecting the success of targeted policy interventions.
India also shows mixed results on financial behaviour. Only 38.6% of adults reported saving money in the past year, whether formally or informally, while 63.3% borrowed funds during the same period. These figures indicate that while access has improved, formal financial products are yet to become central to everyday financial lives for many Indians.
Digital infrastructure continues to be a limiting factor for the more widespread adoption of digital finance. Just 66.5% of adults in India own a personal mobile phone, and only 42% have a smartphone. Alarmingly, only 38.3% of phone users have password-protected their devices, raising concerns about security and fraud in digital financial transactions.
Despite having among the highest account ownership rates globally, India still has one of the world’s largest absolute numbers of unbanked adults, owing to its large population. The report suggests that enhancing digital access, improving trust and user experience, and delivering financial products tailored to low-income and rural populations will be key to deepening the country’s financial inclusion gains.
