Three quarters of the world's poor do not have a bank account, not only because of poverty, but also because of the cost, travel distance, and amount of paper work involved in opening one, says the World Bank.

The 2011 survey of about 150,000 people in 148 countries finds that more than 75% of adults earning less than $2 a day did not use a formal financial institution. The phenomenon of being "unbanked" is also linked to income inequality: the richest 20% of adults in developing countries are more than twice as likely to have a forma account as the poorest 20%.

Those without access to formal banking often have to rely on money lenders who often charge high fees. The "unbanked" are also less likely to start their own business or insure themselves against unexpected events.

Financial inclusion, or being "banked" can be transformative, as it allows poor people to build a more secure future. The ability to save and borrow allows them to build their assets, start a business, invest in education, establish a credit rating, and eventually own a home.

Source: bne