fii ghana 2015: the state of financial inclusion and mobile financial services
TRANSCRIPT
FII Ghana 2015: The state of financial inclusion and mobile money in Ghana
Peter ZetterliDecember 2015
About CGAPThink tank housed in the World Bank dedicated to expanding financial inclusion.
Supported by 30+ members, incl. bilateral and multilateral donors, private foundations.
Mission to understand and disseminate significant innovations in the inclusion field to practitioners, policy makers, regulators and donors active in the space.
Active in Ghana since 2011, focused on the mobile financial services market.
About FinScopeSurvey developed by FinMark Trust to measure levels of access and uptake of financial products and services (both formal and informal).
Ghana FinScope 2010 results form the basis for analysis of trend changes in this presentation.
While FinMark Trust has been helpful to this exercise, FinMark Trust is not in any way responsible for the analysis or any interpretations thereof.
Financial inclusion in Ghana3
The financial landscape in Ghana has developed since 2010
Access Strand in FII 2015 vs FinScope 2010
Note: Shows access to services, not accounts. Minor differences exist between surveys.
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded
Access to formal financial services has risen by nearly half Comparing FinScope 2010 and FII 2015
41%
58%
15%
17%
44%
25%
2010
2015
Formally included Informal only Excluded
41% expansion of access
The main driver is rapid growth in nonbank formal servicesAccess to these services tripled in five years
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded
3x
34%
36% 7% 8%
7%
7%
15%
17%
44%
25%
2010
2015
Bank MM only NBFI & MM NBFI only Informal only Excluded
Half of this is directly attributable to mobile moneyThe other half is thanks to both mobile money and other nonbank formal
Included only by MM
Ghanaians have roughly the same level of access to banking, mobile money and other formal financial services
Note: Slide shows access to services, not accounts. FinScope definitions are used.
Looking strictly at accounts, banking still contributes moreBut mobile money accounts have substantially outgrown NBFI accounts
of Ghanaian adults have registered accounts with a formal financial institution
34% have bank accounts
have nonbank financial institution accounts
have mobile money accounts
Note: FII definitions are used. NBFIs exclude credit-only institutions.
48%
20% 8%
Sour
ce:
Inte
rMed
ia F
II T
rack
er S
urve
ys 2
014-
2015
.
Ghanaians are highly banked compared to peers
14%16%
21%
28%
34%
Uganda Rwanda Tanzania Kenya Ghana
Share of adults who have a registered bank account (%)
Sour
ce:
Inte
rMed
ia F
II T
rack
er S
urve
ys 2
014-
2015
.
…while mobile money in Ghana is still developing
Share of adults who have a registered mobile money account (%)
63%
38%33%
23%20%
Kenya Tanzania Uganda Rwanda Ghana
But banking has expanded only very marginally since 2010
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded
The share with only informal access has also changed little
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded
Financial exclusion has been reduced by almost halfBut one in four Ghanaians are still excluded
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded
43% drop in exclusion
Financial inclusion has expanded fastest in more excluded areas
Access to formal financial services by region, 2010 vs 2015
0% 10% 20% 30% 40% 50% 60% 70%
Upper West
Northern
Volta
Upper East
Brong Ahafo
Central
Western
Eastern
Ashanti
Greater Accra
2010 2015
Use of most commercial financial products has grown since 2010The largest impact is on remittances
Share of adults using respective financial products (%)
Note: FinScope 2010 definitions are revised to match FII 2015 data. Insurance excludes NHIS
26%
45%
7%11%
24%
0%
10%
20%
30%
40%
50%Transactional
Savings
CreditInsurance
Remittance
Financial Inclusion Insights (2015)
21%
37%
9%5%
5%0%
10%
20%
30%
40%
50%Transactional
Savings
CreditInsurance
Remittance
FinScope (2010)
Use of formal remittance
products rose 5x
Use of insurance products doubled
Use of credit products fell
slightly
Transactional and savings products grew by 20-25%
The impact of MM in formalizing remittances is apparentA less apparent, but also clear, impact on savings
23%
40%
6%11%
11%0%
10%
20%
30%
40%
50%Transactional
Savings
CreditInsurance
Remittance
2015 without mobile money
26%
45%
7%11%
24%0%
10%
20%
30%
40%
50%Transactional
Savings
CreditInsurance
Remittance
2015 with mobile money 2 / 3 of the increase is
thanks to MM
2 / 3 of the increase on savings is due to MM
Share of adults who use various financial products (%)
0%
10%
20%
30%
40%
50%Transactional
Savings
CreditInsurance
Remittance
Total Banking ONLY
0%
10%
20%
30%
40%
50%Transactional
Savings
CreditInsurance
Remittance
Total Mobile Money ONLY
But the role of MM in the overall provision of formal financial products and services is modest compared to banking
Summary of takeaways on inclusion in Ghana
Financial inclusion has
expanded substantially in last five years
This is driven by nonbank
formal, notably mobile money
Banking is comparatively high but not
growing much
Lagging regions are catching up
faster
Vulnerable groups22
12%
18%
20%
25%
31%
30%
31%
12%
15%
15%
18%
20%
20%
20%
3%
5%
7%
6%
5%
7%
7%
Poor
Rural
Female
Total population
Male
Non-poor
Urban
Active bank account holders
Active MM account holders
Active NBFI account holders
Female, rural and poor Ghanaians are less likely to be using any type of financial accounts with formal institutions
Share of sub groups with active financial accounts (%)
Note: Bars are cumulative and may reflect multiple responses
The poor are as likely to be using MM accounts as they are bank accounts
Financial inclusion has expanded particularly fast in rural areasRural access to formal financial services has doubled since 2010
26%
51%
18%
21%
55%
29%
2010
2015
Formally included Informal only Excluded
2x
Rural
Rural banking access has grown better than national averageExpanded by 30% since 2010
21%
27%
5%
24%
18%
21%
55%
29%
2010
2015
Bank Non-bank formal Informal only Excluded
Rural
…but again the real change is driven by nonbank formalAccess grew fivefold since 2010
21%
27%
5%
24%
18%
21%
55%
29%
2010
2015
Bank Non-bank formal Informal only Excluded
Rural
5x
21%
27% 8% 8%
5%
8%
18%
21%
55%
29%
2010
2015
Bank MM only NBFI & MM NBFI only Informal only Excluded
Again thanks to a combination of mobile money and other nonbank formal financial institutions
Included by MM
Rural
Strikingly, fewer urban Ghanaians report having bank accountsHowever banking still represents 2/3 of formal inclusion
52%
43%
9%
22%
11%
13%
28%
22%
2010
2015
Bank Non-bank formal Informal only Excluded
17% drop
Urban
But rapid growth in nonbank formal is a counterweight
52%
43%
9%
22%
11%
13%
28%
22%
2010
2015
Bank Non-bank formal Informal only Excluded
2.5x
Urban
…as a result, urban inclusion still managed to expand
61%
65%
11%
13%
28%
22%
2010
2015
All formal Informal only Excluded
Urban
Access to formal financial services has grown slightly faster for women than for men
37%
57%
18%
20%
45%
24%
2010
2015
Male
Female
45%
62%
12%
12%
43%
26%
2010
2015
Formally included Informal only Excluded
Women have less access to banks—and the gap is growing—but nonbank formal has expanded their formal inclusion substantially
29%
31%
8%
26%
18%
20%
45%
24%
2010
2015
Male
Female
40%
43%
5%
19%
12%
12%
43%
26%
2010
2015
Banked Nonbank formal Informal only Excluded
40%
43% 7% 7%
5%
5%
12%
12%
43%
26%
2010
2015
Bank MM only NBFI & MM NBFI only Informal only Excluded
Women are more likely to rely on all kinds of nonbank formal for access than men are
Male
Female
29%
31% 8% 9%
8%
9%
18%
20%
45%
24%
2010
2015
Access to banks is the big distinguisher between the poor and non-poor in formal inclusion
41%
21%
24%
20%
14%
23%
21%
36%
Non-poor
Poor
Banked NBFI only Informal only Excluded
1.7x0.5x
The poor / non-poor inclusion gap is smaller for mobile money Inequity in active registered use of bank accounts is more than twice that for MM
30%
20%
12% 12%
Bank MM
Nonpoor Poor
2.3x
…as is the urban / rural gap
31%
19%18%
15%
Bank MM
Urban Rural
2.7x
…and the gender gap
31%
20%20%
15%
Bank MM
Men Women
1.7x
But women are twice as likely to not have a phone and more likely to need help to use it—not to mention use MM
4%
19%
12%
7%
27%25%
Do not have a phone, borrow fromother people (% of total population)
Need help using mobile phone (% ofmobile phone users)
Need help making MM transactions (%of MM users)
Males Females
93%87%
91%
71%
45%
19%
35%
15%
Non-poor women Poor women Non-poor women Poor women
Urban Rural
Own a mobile phone Own a DFS account
And poor women are less likely even than other women to have phones and mobile accounts, especially in rural areas
Share of women who own mobile phones and DFS accounts (%)
The mobile money space40
The market has been picking up speed for some time, growing at 2.5x per annum for the last couple of years
Source: CGAP estimates. Note: Shows accounts, not users. Includes non-MM DFS accounts.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015
Mill
ions
Active DFS accounts, market wide (90 days)
A few statistics on the mobile money market right now
Source: Bank of Ghana, Nov 2015. Note: Shows accounts, not users. Excludes non-MM DFS accounts.
44,000active MM agents
$100mMM wallet balances
10m registered MM accounts
$900mtransacted each month
4.4m active MM accounts
24m transactions each month
70%
17%
10%3%
MTN
Tigo
Airtel
Vodafone
MTN is the clear market leader—but also faces considerable competition
Market shares of 90 day active mobile money accounts (%)
Source: Bank of Ghana, Nov 2015. Note: Shows accounts, not users.
Nearly half of active MM account holders also use a bank account
Share of active users of bank and/or MM accounts who use either or both types (%)
51% 20% 29%
Bank only Bank and MM MM only
This is in line with evidence from peers that there is no contradiction between banking and mobile money services
Share of active users of bank or MM accounts who use either or both types of accounts (%)
5%
30%
1%
21%
51%
37%
20%
45%
26%
20%
59%
58%
53%
54%
29%
Uganda
Tanzania
Kenya
Rwanda
Ghana
Bank only Bank & MM MM only
MM customers find service points (agents) more accessible than customers of other financial institutions
0%
25%
50%
75%
100%
MM agent ATM Bank branch MFI branch Credit Unionbanch
Cooperativebranch
<1km from home 1-5km from home >5km from home
Proximity to service points (users of the respective financial institutions; %)
11%
30%
9%
10%
This greater proximity is particularly evident in rural areas
Distance from the bank for*: Distance from agent for**:Bank active users
Bank rural users
Less than 5 km More than 5 km
MM active users
MM rural users
This may be one explanation why MM is already more common than banking in some more rural and remote regions
Ashanti12%
Brong-Ahafo15%
Central16%
Eastern16%
Greater Accra13%
Northern13%
Upper East13%
Upper West18%
Volta21%
Western16%
22%
19%
16%
13%
10%
MM active usage Bank account active usage
Ashanti21%
Brong-Ahafo18%
Central20%
Eastern23%
Greater Accra27%
Northern13%
Upper East23%
Upper West13%
Volta19%
Western14%
30%
25%
20%
15%
10%
Mobile money accounts are also half as likely to be inactive
Share of adults with registered vs. active bank and MM accounts (%)
Note: Active is defined as having been used within the last 90 days. All figures are self reported.
34%
20%
25%
17%
Banks Mobile money
Registered Active
27% dormant
13% dormant
Mobile money is now arguably the most accessible form of financial service
99% of Ghanaians are
aware of at least 1 provider and 29% have
used MM
25% are actively using MM and 17%
are active account users
There are over 40,000 active MM agents in Ghana today
71% of MM users know of
a MM agent <1km from their home
This figure is for banks 52% and MFIs 32% of users
Broad takeaways
While Ghana is making great progress, a quarter of Ghanaians remain excluded
Access Strand in FII 2015
Note: Figures show access to services, not accounts
36% 22% 17% 25%2015
Bank Non-bank formal Informal only Excluded
…and almost a fifth have to rely on informal financial services to their financial access
Access Strand in FII 2015
Note: Figures show access to services, not accounts
36% 22% 17% 25%2015
Bank Non-bank formal Informal only Excluded
Banking is growing, but too slowly to be the main engine for expanding financial inclusion
Share of adults with access to various financial services, 2010 vs. 2014
34%
0%
20%
36%
29% 29%
Bank MM Other formal
2010 2014
MM has great potential to keep expanding access, as evidenced by the leading markets in East Africa
Share of all adults in Tanzania
Source: FinScope Tanzania
0% 1%
50%54% 55%
27%
2006 2009 2013
MM users
Financiallyexcluded
Ghana has all the base conditions for MM to be successfulIn fact conditions are better here than in the leading East African markets
0%
25%
50%
75%
100%
% with required ID % with basic numeracy % own a mobile phone % ever send/receive SMS
Kenya Tanzania Uganda Rwanda Ghana
Phone ownership is very high, even in disadvantaged groups
Share of sub groups who own a mobile phone (%)
0%
20%
40%
60%
80%
100%
National Male Female Urban Rural Non-poor Poor Rural, poorfemale
71%
19%
22%
26%
28%
28%
30%
31%
33%
36%
78%
99%
100%
Downloaded a mobile phone application
Made a financial transaction
Used on-demand provider services
Downloaded music, video or games
Sent/received MMS
Used touchscreen
Used social networking
Used the Internet
Taken a photograph
Sent/received SMS
Received calls
Made calls
Ghanaians are fairly sophisticated mobile phone users
% of adults with access to mobile phones
Advanced activities
…and also quite independent in their phone useMost can transact without assistance, including 4 out of 5 MM users
% of those who ever performed a specific activity who can do so without help
93% 92% 91% 89% 87%82% 82%
Internet Touchscreen MMS messages Downloadingmusic etc
Mobileapplications
Take photos Financialtransaction
Ghana’s regulatory environment for MM is steadily improvingTwo landmark regulations promulgated in 2015
E-Money Issuer
Guidelines
Agent Guidelines
And the mobile money space is now quite competitive
Sour
ce:
Inte
rMed
ia F
II T
rack
er S
urve
ys 2
014-
2015
.
So there’s no reason not to expect Ghana to catch up with the leading mobile money markets in East Africa
Share of adults who have a registered mobile money account (%)
63%
38%33%
23%20%
Kenya Tanzania Uganda Rwanda Ghana
7mGhanaians
This development is complementary to banking and should not be seen as a threat to banks, as East Africa also shows
Bank vs MM accounts in Kenya, 2007-2013
Data source: Central Bank of Kenya
On the contrary, the expansion of formal accounts enables a range of other services, many of which are powered by banks
The MFS ecosystem in TanzaniaAgriculture Water
Savings
Insurance
Merchant solutions
Credit
Energy
Mobile Money
FarajaInsurance farijika
Taxes and fees
A few things that we think should happen now
• Regulators need to stay abreast of the rapid developments in the space in order both to enable new services and to regulate them appropriately and protect customers’ interests.
• From a policy perspective, government should formulate a vision for mobile financial services and the digital ecosystem—not least how government itself should leverage MM.
• Banks should explore the many new opportunities that the mobile channel opens up, to deliver a broader array of mobile financial services in partnership with MM providers.
• MM providers must continue to improve reliability, build trust and deliver real value to customers.
Advancing financial inclusion to improve the lives of the poor
www.cgap.org