financial inclusion in the eccas region: where do we … for all: promoting financial inclusion in...

Finance for All: Promoting Financial Inclusion in Central Africa

March 23, 2015

ECCAS Regional Conference, Brazzaville, Congo 1

International Monetary FundAfrican Department

Financial Inclusion in the ECCAS region: where do we stand

Boriana YontchevaResident Representative Cameroon

African Department IMF

ECCAS Regional Conference ,

Brazzaville, CongoMarch 23, 2015

Outline

1. Access to financial service is very unevenccess to a c a se ce s e y u e e

2. Where to we stand in ECCAS

3. Causes

4. Reforms


March 23, 2015


Financial Inclusion tremendously around the world

Afrique Subsaharienne: Distribution des subventions aux carburants q

3

Source: Arze del Granado, Coady, and Gillingham (2010).

Only half of the world population has a bank account

Access varies a lot across SSA

Account at a formal financial institution(% age 15+), 2011

Account used to receive wages (% age 15+), 2011

Source: Findex.


March 23, 2015


…but is relatively lower in the sub-region…

40%

50%Financial Inclusion - a Regional Comparison

0%

10%

20%

30%

5Source: Findex.

0%

Ang

ola

Buru

ndi

Cam

eroo

n

Cent

ral A

fric

an

Rep. Ch

ad

Cong

o, D

em.

Rep.

Cong

o, R

ep.

Gab

on

Rwan

da

CEM

AC

SSA

Fron

tier a

nd

Emer

ging

… particularly for vulnerable populations such as the poor…

60%

75%Financial Inclusion by Incomepoorest 20% richest 20%

-15%

0%

15%

30%

45%

ngol

a

urun

di

eroo

n

n R

ep.

. Rep

.

Rep

.

Chad

abon

wan

da

MA

C

SSA

ergi

ng

poorest 20% richest 20%

6Source: Findex.

A B u

Cam

e

Cent

ral A

fric

an

Cong

o, D

em.

Cong

o, C

Ga

Rw CE

Fron

tier a

nd E

me


March 23, 2015


…and women

40%

50%Financial Inclusion by Gender

Men

0%

10%

20%

30%A

ngol

a

urun

di

eroo

n

n R

ep.

Chad

m. R

ep.

o, R

ep.

Gab

on

Rwan

da

EMA

C

SSA

mer

ging

Men

Women

7Source: Findex.

A B

Cam

Cent

ral A

fric

a

Cong

o, D

em

Cong

o G R C

Fron

tier a

nd E

mCountry comparison are useful but benchmarking

Step1: identify the benchmark

Financial Sector

Development

Economic development

Population/ Démographics

« Special » circumstancesOffshore center, oil exporters etc

(tool: World Bank: FINSTAT)

9


March 23, 2015


Step 2: Identify the gap

5

6

FinGap=Benchmark/Actual level

1

2

3

4Facts1. Many financial sectors in the region are relatively underdeveloped2. The size of the gap is not related to the economic development

10

0

Equa

toria

l Gui

nea

Seyc

helle

sLi

beria

Gab

onCh

adCo

ngo,

Rep

ublic

of

Sier

ra L

eone

Bots

wan

aG

uine

aCe

ntra

l Afr

ican

Rep

ublic

Cong

o, D

emoc

ratic

Rep

.G

uine

a-Bi

ssau

Leso

tho

Gha

naZa

mbi

aM

adag

asca

rCa

mer

oon

Swaz

iland

Mau

ritiu

sTa

nzan

iaG

ambi

a, T

heCo

mor

osRw

anda

Uga

nda

Cabo

Ver

deN

iger

Côte

d'Iv

oire

Ang

ola

Burk

ina

Faso

Mal

iEr

itrea

Beni

nM

alaw

iSo

uth

Afr

ica

Nam

ibia

Keny

aBu

rund

iM

ozam

biqu

eTo

goN

iger

iaSã

o To

mé

and

Prín

cipe

Sene

gal

Step 3: what are the factors that explain financial sector development

GDP/capita

Financial sector « gap »

pInflationDebt Natural resourcesInstitutional Variables (business climate, government effectiveness etcFinancial sector specific variable (depth of credit bureau)

Can be explained

by

“Financial Depth and Inclusion in Africa “ IMF Working PaperAdrian Alter and Boriana Yontcheva

11


March 23, 2015


Factors explaining financial sectors development in Africa

As expected and elsewhere macroeconomics (inflation and GDP) matterCFA zone countries with better business climate and better institutions have more developed financial sectorsCountries with more developed credit bureau coverage have more developed financial sectors

12

Financial access varies across SSA but some countries have seen a very rapid improvement

Commercial bank branches (per 100,000 adults), 2005

Commercial bank branches (per 100,000 adults), 2012

Source: Findex.


March 23, 2015


Financial access varies across SSA but some countries have seen a very rapid improvement

Example: Rwanda: Number of bank branches per

100 000 inhabitants100,000 inhabitants.

Actual level

Benchmark

Source: Finstat

Potential reforms

15


March 23, 2015


Th k !Thank you!www.imf.org

financial inclusion in the eccas region: where do we … for all: promoting financial inclusion in...

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