Financial inclusion defined here as the use of formal accounts can bring many welfare benefits to individuals. Yet we know very little about the factors underpinning financial inclusion across individuals and countries. Using data for 123 countries and over 124,000 individuals, this paper tries to understand the individual and country characteristics associated with the use of formal accounts and what policies are effective among those most likely to be excluded: the poor and rural residents. The authors find that greater ownership and use of accounts is associated with a better enabling environment for accessing financial services, such as lower account costs and greater proximity to financial intermediaries. Policies targeted to promote inclusion such as requiring banks to offer basic or low-fee accounts, exempting some depositors from onerous documentation requirements, allowing correspondent banking, and using bank accounts to make government payments are especially effective among those most likely to be excluded. Finally, the authors study the factors associated with perceived barriers to account ownership among those who are financially excluded and find that these individuals report lower barriers in countries with lower costs of accounts and greater penetration of financial service providers. Overall, the results suggest that policies to reduce barriers to financial inclusion may expand the pool of eligible account users and encourage existing account holders to use their accounts to save and with greater frequency.  The use of formal financial services—has become a subject of growing interest for researchers, policymakers, and other financial sector stakeholders.1 Without financial inclusion, individuals and firms need to rely on their own resources to meet their financial needs, such as saving for retirement, investing in their education, taking advantage of business opportunities, and confronting systemic or idiosyncratic shocks (Demirguc-Kunt et al., 2008). Financial exclusion is problematic when it is involuntary. In other words, exclusion deserves policy action when there are individuals whose marginal benefit from using financial services exceeds the marginal costs, but who are excluded by barriers such as high account fees, large distances, and lack of suitable products—that result from market failures. The market failures could be due to a host of factors, such as imperfect information, noncompetitive markets, shortcomings in the contractual environment, and lack of physical infrastructure.