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World Bank/Brookings Institution Global Conference World Bank Headquarters, Washington, DC May 30-31, 2006

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World Bank/Brookings Institution Global Conference World Bank Headquarters, Washington, DC May 30-31, 2006

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  1. Indicators of Access to FinanceThrough Household Level SurveysConcepts and Measures for Six CountriesPresented by: Anjali Kumar, World BankBased on the collaboration of a Joint Working Group of the World Bank/DFID/Finmark TrustPrepared by: Anne-Marie Chidzero, FinMark Trust, Karen Ellis, DFID, & Anjali Kumar, World Bank with contributions from Mukta Joshi and Adam Parsons World Bank/Brookings Institution Global Conference World Bank Headquarters, Washington, DC May 30-31, 2006

  2. Individual and Household Consumers: present focus • ‘Specialized’ surveys of financial access: • Brazil, India, Colombia, Mexico, and new surveys in Nepal, Pakistan, Jordan and proposed for West Africa (World Bank) • South Africa, Botswana, Lesotho, Swaziland, Namibia, Zambia, Uganda, and proposed for Ghana, Tanzania (Finscope) • Compatibility Desirable with Broad Based Income and Expenditure Surveys: • LSMS, US, UK, many other developed countries

  3. What should be Measured? Dimensions of Access • Institutional Dimension - Across providers; e.g.: • Formal /Informal • Public / Private • Domestic / Foreign • Functional Dimension – Across services: • Transactions: check cashing to cross border remittances • Savings: from safekeeping to investment • Loans and credits: Infrequent to readily available • (Insurance / risk transformation) • Product Dimension / Across devices / interfaces: • Types of bank accounts, types of loans, credit cards, etc

  4. Institutional Core Indicators% Adult Population with access to: • A1: Banks and Bank like providers: • Broad-spectrum intermediaries (including some credit unions, niche banks) Criteria: deposit taking, access to national payments network, supervision and oversight, standard terms • A2: Other formal financial institutions: • More specialized, e.g. insurance, money transfer agents, finance/ credit companies Also regulated, vary by country and by service, tradeoff of comparability / comprehensiveness • A3: Informal financial service providers: • No financial regulation, but organized ROSCAs, tontines, moneylenders, pawn shops, ususus, stokvels etc.

  5. Financially Served Formally Included Informally Served (only) Financially Excluded Formal other (only) Bank Country X 0% 20% 40% 60% 80% 100% Bank Formal other Informal Excluded The Access Strand:Formal to Informal Institutions

  6. Functional Core Indicators % Adult Population who: • A4 = Payments: • Receive money regularly through formal financial instruments Income, remittances • A5 = Savings: • Keep money in formal financial instruments which allow them to safeguard and accumulate money Transactions accounts, savings accounts, time deposits / CDs, bonds, stocks, funds, voluntary pension plans, etc. • A6 = Loans and Credits: • Have obtained / have outstanding a loan or credit facility from a formal financial institution now or over the past 12 months.

  7. Sub Indicators: Poverty and Financial Access: • S1 = % Adults who are Formally Served in the Bottom Quintile Household Financial Access: • S2 = Individuals vs Households: % Adults formally served either directly or indirectly through another household member

  8. A1: The Banked Percentage of total adult population with a bank account § Each Individual is randomly selected from every household

  9. A2: Headline Indicator – The Formally Included Percentage of total adult population which uses the services of any formal financial institution ± Formal access high due to large number of people of accessing lottery shops

  10. A3: The Financially Served Percentage of total adult population which uses any formal and/or informal financial institution

  11. A4: Payments Percentage of adults receiving money regularly through formal financial institutions

  12. A5: Savings The percentage of adults who keep money in formal financial instruments which allow them to safeguard and accumulate money

  13. A6: Loans and Credit Percentage of persons who have obtained/have outstanding a loan or credit facility from a formal financial institution

  14. S1: The Poverty Dimension – The Formally Served in the Bottom Quintile Percentage of total adult population in the bottom income quintile which uses the services of any formal financial institutions

  15. S2: Individuals vs. Households – Direct and Indirect Access Percentage of total adult population formally served either directly or indirectly through another household member

  16. Comparison of the Core Access to Finance Indicators across Countries∫ ∫Data in percentages ± includes AFORES Quintile calculation based on * income, ‡ on bedrooms per person, § on income, ネ on rent

  17. A3- Financially Served – 54% A2 - Formally Included – 49% A1- Banked Financially Excluded Formal Other Informal Only Bank Financial Access Strand: Botswana 2004

  18. A3- Financially Served – 83.8% A2 - Formally Included – 79.3% Financially Excluded A1- Banked Formal Other Informal Only Bank Financial Access Strand: Brazil 2002

  19. A3- Financially Served – 50.6% A2 - Formally Included – 48.1% A1- Banked Financially Excluded Formal Other Informal Only Bank Financial Access Strand: Colombia 2002

  20. A3- Financially Served – 78.6% A2 - Formally Included – 52.0% Financially Excluded A1- Banked Bank Formal Other Informal Only Financial Access Strand: Mexico 2002

  21. A3- Financially Served - 55.8% A2 - Formally Included – 53.9% A1- Banked Financially Excluded Formal Other Informal Only Bank Financial Access Strand: Namibia 2004

  22. A3- Financially Served - 63% A2 - Formally Included – 55% A1- Banked Financially Excluded Formal Other Informal Only Bank Financial Access Strand: South Africa 2005

  23. The Formally Served – S1: Total population vs Bottom quintile

  24. The Formally Served – S2: Direct and Indirect Access

  25. The International CommunityInformation, Involvement, Support • From the next small steps.. • Incorporation of access indicators in multiple forms of investigations, with different donor / national partners • Undertaking a set of follow up surveys across a range of countries • The Vision: Mapping Access in the developing world • To the final major goals • Incorporating Access indicators into stronger policies for financial inclusion • Achieving growth and poverty reduction through financial deepening

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