INTERVIEW: Why are Millions of People in the Global South Still Unable to Save Formally?

In this exclusive interview with Impact Newswire, as mobile phones become de facto bank accounts and financial inclusion reaches record highs, a deeper question persists across the Global South: why do so many people still struggle to turn banking access into actual savings, and what does it take for digital finance to translate into real financial security? Accion’s Raliat Sunmonu, Vice President for Middle East and Africa and John Fischer, Chief Investment Officer, give their perspective.

Roselin Vargas did not set out to become a business owner. A young mother in Bolivia with limited options in the formal job market, she began selling sugar in a local marketplace simply to earn enough to support her family. What started as a small, informal trade quickly gained traction as other vendors became her customers, and demand steadily grew beyond what she could supply.

When Roselin tried to expand, she encountered a familiar barrier. The banks she approached would not lend to her. Without formal collateral or a documented credit history, her business did not meet the threshold of bankable risk.

Her trajectory changed when she was connected to BancoSol, a longstanding partner of Accion and one of the earliest microfinance institutions in Latin America. With access to credit, Roselin expanded her inventory beyond sugar to include flour and salt, evolving from a market stall operator into a supplier serving a wider network of traders.

In 2018, Fatuma fled war in the Democratic Republic of Congo, joining millions of refugees who have sought safety across borders in East Africa. She arrived in Uganda with little more than the hope of starting over in a place where survival often depends on informal work and fragile support networks.

Through Soko Uganda, an e-commerce marketplace supported by Accion, Fatuma gained access not only to financial services but also to business management training. With that support, she opened a small salon, turning a space of displacement into a source of income and stability as she rebuilt her life.

Their stories point to a broader paradox in global finance. Even as access to accounts expands, formal saving remains out of reach or underused for many. An estimated 1.4 billion people worldwide are still poorly served by the formal banking system, leaving households exposed to shocks they cannot easily absorb.

As climate shocks, inflation and economic uncertainty intensify across the Global South, financial resilience has become one of the continent’s most urgent development challenges. A growing body of data now shows that millions of people in low income economies remain one emergency away from financial distress, even as digital financial services rapidly reshape how people save, borrow and transact.

According to the World Bank’s Global Findex 2025 report, for instance, only 35 percent of adults in Sub-Saharan Africa formally saved money through a financial institution in 2024, despite years of progress in financial inclusion. The report found that mobile money is increasingly filling the gap left by traditional banks, with mobile-based savings becoming one of the fastest-growing forms of financial participation across the continent. Sub-Saharan Africa now has the world’s highest use of mobile money accounts, with account ownership rising to 58 percent of adults, up from 49 percent in 2021.

The findings underscore a broader shift underway in African finance. For decades, formal banking systems struggled to reach low-income households, rural populations, refugees and small informal businesses due to high costs, limited branch networks and strict documentation requirements. In many countries, mobile phones have effectively become the first bank account for millions of people.

The World Bank estimates that 40 percent of adults in Sub-Saharan Africa now have a mobile money account, the highest level globally, helping drive a sharp rise in formal savings across the region. Analysts say this transition is increasingly critical as African economies face rising climate-related disruptions including floods, droughts and crop failures that disproportionately affect households operating outside formal financial safety nets.

The issue is particularly acute for Africa’s vast informal economy, which accounts for 83 percent of employment in some countries, according to the International Labour Organization. Smallholder farmers, market traders and microenterprises often lack access to affordable credit, insurance or emergency savings products, leaving them vulnerable to even minor economic shocks.

Against this backdrop, US-based nonprofit Accion has emerged as one of the longest-running organizations focused on expanding financial inclusion in underserved markets. Founded 65 years ago, Accion began its early work in Latin America, including Venezuela and Brazil, where it identified lack of capital access as a major barrier facing low-income entrepreneurs and small businesses.

Over the decades, the organization says it helped pioneer the development of microfinance before expanding into digital financial services and fintech investment. Today, Accion adds it has helped build 299 financial service providers serving more than 500 million low-income clients across 77 countries.

To better understand what is still preventing people from saving formally, and whether digital finance is closing that gap, editor Faustine Ngila spoke with Raliat Sunmonu, Vice President for Middle East and Africa at Accion Advisory, and John Fischer, Chief Investment Officer at Accion.

1. The Global Findex 2025 shows less than 40% of adults in Sub-Saharan Africa save formally, despite rising account ownership. What are the structural barriers preventing people from using accounts regularly, not just opening them? 

Raliat Sunmonu: There are several barriers that prevent people from consistently using savings accounts. First, in countries where cash is still predominant, people must physically go to a bank or Cash In / Cash Out (CICO) agent to deposit or withdraw their savings, which can be inconvenient and time-consuming. Second, service providers often charge fees, such as maintenance or withdrawal fees, that can quickly add up for people of modest means. Finally, a good dose of mistrust for formal financial institutions still exists in many markets, particularly in less urbanized areas.

2. Mobile money is clearly a driver of inclusion, but it still accounts for a minority of total savings behavior. What specific innovations are needed to move users from payments to long-term savings and wealth-building tools? 

Raliat Sunmonu: Mobile money payments can be a great gateway to other value-added services that build long-term usage. For customers without a formal credit history, lenders can use mobile money and digital wallet activity data such as account balance, transaction value, and transaction frequency, to build a more complete profile of a client that can then be used for additional wealth-building tools like productive loans. 

3. Informal savings groups and cash still dominate across much of Africa. How is Accion designing products that compete with or complement informal systems rather than trying to replace them?  

Raliat Sunmonu: “Accion works with financial intermediaries, such as fintechs, banks, microfinance institutions, and digital platforms, to design relevant and meaningful products for underserved and low-income customers. Often, this means identifying existing systems or providers who are already known and trusted by these customers. We leverage those trusted bridges to offer digitally-enabled solutions that integrate new partnerships and meaningful value-added services to create even better outcomes for both customers and service providers-alike. This is a sustainable, market-led approach that is centered around current customer realities. Examples of how this approach delivers real impact can be found here.” 

4. Many fintech solutions target urban users. How do you ensure digital financial tools are actually reaching rural populations and smallholder farmers, who face connectivity and literacy gaps? 

Raliat Sunmonu: Accion takes a holistic approach to catalyzing solutions for last-mile customers. We identify service providers with existing or potential capabilities to deliver services to the last-mile, using a mix of approaches such as field agents, low-end mobile phone support, and call centers. We then support these service providers in layering relevant services that meet the customers where they are on existing infrastructure and identify ways to deepen customer skills and trust in using those services. Finally, we amplify innovative new approaches through demonstration models, to crowd in investment, new solutions and other actors. A great example of this approach is our work in Ethiopia with rural smallholder farmers.”

5. The data suggests financial inclusion is improving, but resilience to shocks like climate events remains weak. Can you point to evidence that digital finance is meaningfully improving household resilience, not just access?  

Raliat Sunmonu: Though there’s still a lot of work to be done to fully understand how digital financial services improves household resilience, there are real, tangible examples from Accion’s work that demonstrate how digital financial services can contribute to the financial health of individuals and their households. For example, in 2018 Accion and the Mastercard Center for Inclusive Growth, initiated a program to support the digital enablement of micro and small businesses globally. During the first four years, we supported 56 institutions (9 financial service providers and 47 fintechs) to reach over 4 million microentrepreneurs through digitally-enabled financial and other services. Our findings show that nearly 80 percent of digital finance users interviewed across five countries perceived an increase in their capacity to manage financial challenges, such as repaying their loans on time or accessing credit for their needs. Globally, women-owned micro and small businesses also reported significant improvements in their financial health over a 12-month period, with more than 70 percent reporting that the digital products delivered through the program contributed to this improvement.  Digitalization can significantly improve the cost, relevance, and variety of financial services available to low-income customers, helping to build resilience to climate events and other economic shocks.

7. Women remain disproportionately excluded or under-served in financial systems. What gender-specific design or distribution strategies have proven most effective in closing this gap? 

Raliat Sunmonu:  Accion’s proven approach—through our investments, advisory, partnerships and research—is to demonstrate the business case for inclusive financial solutions that are aligned with women’s realities. We embed a gender lens in how we source and evaluate prospective investees and work with them to deliver more inclusive solutions, profitably. Our advisory team has created tools and methodologies to help institutions better see, understand and serve women customers, using strategic partnerships and new technologies to deepen our impact and amplify our work. Through the Center for Financial Inclusion, an independent think tank housed at Accion, we use evidence-led insights to help address systemic barriers and shift the policy environment to move the needle on women’s financial inclusion.

8. Given Africa’s low domestic savings rates and shallow capital markets, how realistic is it to expect fintech and microfinance alone to close the continent’s financing gap, without broader macroeconomic reforms? 

Raliat Sunmonu: The reforms in the financial services sector in many African countries clearly demonstrate the recognition—by governments and private sector alike—that unlocking the billions of dollars needed to close the financing gap requires strong capital markets, diversified financing instruments, and closer coordination between various actors, from governments to development finance institutions and banks. Institutions like Financial Sector Deepening-Africa (FSD Africa), the African Development Bank and the African Guarantee Fund are at the forefront of strengthening capital mobilization (especially domestic sources), introducing blended finance instruments to catalyze investments in key sectors, and improving capital market infrastructure. Other organizations such as the African Venture Philanthropy Alliance are dedicated to mobilizing and directing capital flows to high areas and enablers.

9. Impact investing in fintech has grown rapidly. How do you balance commercial returns with consumer protection, especially in markets where over-indebtedness from digital credit is rising? 

John Fischer: We believe fintechs can personalize products, making them relevant to the client’s context, and do so at a lower cost and at a greater scale. At Accion, we invest capital into innovative companies with the potential to reach large numbers of underserved people with responsible financial services. First, we invest off of our own balance sheet to test different technologies and approaches, enter new markets, and learn. We then build demonstrations models to explore pathways to scale. We created Accion Impact Management as our platform for impact investments in financial inclusion leveraging third-party capital. We believe our investments have shown that fintech companies can deliver both social and financial objectives and that strong consumer protection aligns with commercial returns. 

When fintechs embed responsible finance into their strategy rather than treat it as a constraint on growth, they are able to maintain better portfolio qua

lity, reduce customer churn, and ultimately achieve more durable returns. We believe consumer protection is not just good practice but part of how fintech models scale sustainably.

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