the global findex data...agriculture payments . total percentage of adults . note: the height of the...

Measuring Financial Inclusion:

The Global Findex Data

Leora Klapper

Finance and Private Sector Development Team Development Research Group

World Bank

In 2014, the World Bank -- with funding from the Bill & Melinda Gates Foundation and in partnership with

Gallup, Inc. – updated and expanded the Global Findex dataset, an unprecedented study of financial

inclusion based on interviews with almost 150,000 adults in over 140 countries worldwide.

GLOBAL FINDEX DEFINITIONS

Why is Financial Inclusion important? • Financial inclusion means that households and businesses have access and can effectively

use appropriate financial services. Such services must be provided responsibly and sustainably in a well regulated environment.

• Financial inclusion can be a key driver of economic growth and poverty alleviation, as access to finance can boost job creation, reduce vulnerability to shocks and increase investments in human capital.

• Without inclusive financial systems, poor people must rely on their own limited savings to invest in their education or become entrepreneurs – and small enterprises must rely on their limited earnings to pursue promising growth opportunities.

• Growing evidence that financial inclusion has significant beneficial effects for individuals. Providing individuals access to savings instruments increases savings, female empowerment, productive investment, consumption (e.g. Aportela, 1999; Dupas and Robinson, 2009; Ashraf et al., 2010).

Financial Inclusion Overview

2014 Findex

• Triennial update of Findex data will add time-series dimension to database

• In 2013, additional funding from the Bill & Melinda Gates Foundation was granted to expand the 2014 Findex to include more nuanced questions on mobile money and an extended module on DOMESTIC PAYMENTS

Message Framework • Measuring ownership and usage of accounts

• Opportunities to expand financial inclusion among the unbanked

• Receive cash payments for wages, government transfers, remittances, and agricultural sales

• Semi-formal savings

• Opportunities to increase usage among people with accounts • Pay utilities and school fees in cash • Send remittance payments in cash

GLOBAL FINDEX Methodology

GLOBAL FINDEX Summary Statistics

World: Financial Inclusion Total Percentage of Adults

51%

61%

2%

62%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 FI Account 2014 FI account Mobile Money Account Any Account

+11 PP


Financial Inclusion Total Percentage of Adults

*Note: The change in account ownership from 2011 to 2014 is shown in red above each bar.

0%

10%

20%

30%

40%

50%

60%

70%

80%

Central Africa East Africa Southern Africa West Africa

6 PP

9 PP

18 PP

11 PP

Account at a financial

institution

Mobile Money account

Mobile Money & Financial

Inst. account

In Sub-Saharan Africa, 12% of adults (64 million

adults) have mobile accounts (compared to just

2% worldwide); 45% of them (28 million) have

only a mobile account

While just one percent of adults globally say

they use a mobile account and nothing else, an

estimated 10 percent of adults in East Africa

report using only a mobile account


Mobile Account Penetration: Sub-Saharan Africa Total Percentage of Adults

Data point to the powerful role that new

technology – such as mobile money accounts –

can play in rapidly moving many adults into the

financial system, especially in Africa


Financial Inclusion Total Percentage of Adults

*Note: The change in account ownership from 2011 to 2014 is shown in red above each bar.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

China East Asia &Pacific (ex.

China)

India South Asia(ex. India)

Europe &Central Asia

High Income:OECD

Latin America& Caribbean

Middle East Sub-SaharanAfrica

10 pp

18 pp 8 pp

4 pp

12 pp

10 pp

15 pp

Account at a financial

institution

Mobile Money account


Financial Inclusion: Women Total Percentage of Adults

Note: The gender gap between women and men is shown in black.

2011

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sub-Saharan Africa

Middle East

Latin America & Caribbean

High Income: OECD

Europe & Central Asia

South Asia (ex. India)

India

East Asia & Pacific (ex. China)

China

10 pp

5 pp

20 pp

11 pp

8 pp

6 pp

9 pp

2014

The gender gap is not significantly narrowing—

the gap in developing countries remains 9 PP


Financial Inclusion: Poorest 40% Total Percentage of Adults

Note: The income gap between the richest 60% and poorest 40% is shown in black.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sub-Saharan Africa

Middle East

Latin America & Caribbean

High Income: OECD

Europe & Central Asia

South Asia (ex. India)

India

East Asia & Pacific (ex. China)

China 12 pp

19 pp

15 pp

7 pp

12 pp

6 pp

17 pp

16 pp

12 pp

2011 2014

The percent of unbanked adults in the

poorest 40% of households in each country

dropped by 17 PP– but more than half of the

poorest 40 percent in developing countries

are still without accounts


Financial Inclusion in G7 Countries: Poorest 40% Total Percentage of Adults

87%

75%

80%

85%

90%

95%

100%

Italy UnitedStates

France Japan Germany UnitedKingdom

Canada High Income/OECD

What is the impact on financial inclusion of moving from cash-based to digital payments?

• Providing a first entry point into the formal financial system (Allen et al., 2013; Li et al.,

2014; Aportela, 1999; Prina, 2012; Masino and Nino-Zarazua, 2014; Batista and Vicente, 2013)

• Making payments more efficient by lowering the cost of disbursing and receiving payments (Aker et al., 2013; CGAP, 2011b; Babatz, 2013; Lindert, et al., 2007)

• Increasing the transparency of the payment and thus making it less likely for there to be leakage between the sender and receiver (Muralidharan et al., 2014)

• Increasing individuals’ risk management capacity (Jack and Suri, 2011; Blumenstock et

al., 2012)

• Increasing women’s economic empowerment (Docquier, Lowell and Marfouk, 2009; Dupas and Robinson, 2009; Morawcynski and Pickens, 2009; Duflo, 2012)

• Increasing the security, privacy and control over the funds received, especially for women (McKenzie and Yang, 2014; Ashraf, et al., 2014; Wright et al., 2014)

GLOBAL FINDEX BACKGROUND

GLOBAL FINDEX Debit Cards

Use of debit cards for direct payments Total Percentage of Adults

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

World Developingeconomies

East Asia &Pacific


High-incomeOECD

economies


Middle East South Asia Sub-SaharanAfrica

Used a debit card

Did not use a debit card 14% of account holders in developing

economies use a debit card

Note: the height of the bar is the percentage of adults with an account at a financial institution

Did not have a debit card

GLOBAL FINDEX Credit Cards

Use of credit cards Total Percentage of Adults

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


East Asia &Pacific


High-incomeOECD

economies



Did not have a credit card

Used a credit card

Did not use a credit card

1 in 10 adults have a credit card in developing countries— of these, 80% report using it

Note: the height of the bar is the percentage of adults with an account at a financial institution

0%

10%

20%

30%

40%

50%

60%

70%

80%

Turkey Brazil China India Russian Federation United States

GLOBAL FINDEX Use of Account

Modes of payments from accounts Total Percentage of Adults

14% of adults in China report using a mobile phone to access their

access

Used a debit card for direct

payments

Used a credit card for direct

payments

Used a mobile phone to make

direct payments from an account

Nearly a quarter of adults in

Turkey report using a credit

card

GLOBAL FINDEX Internet

Internet payments Total Percentage of Adults

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


East Asia &Pacific


High-incomeOECD

economies



Note: the height of the bar is the percentage of adults with access to internet.

Make online payments

Have access to the internet

at home

GLOBAL FINDEX BACKGROUND

What is the impact of moving to digital payments on entrepreneurship?

• Speeds-up business registration & payments for business licenses and permits (Klapper et al., 2007; Daye, Serna et al, 2014)

• Increases participation in e-commerce and improves interaction with clients, vendors and financial institutions (Hejazi, 2014; Adractas et al, 2015, Denecker et al. 2014)

• Improves operational efficiency by improving supply chain management and risk management (Rai, Patnayakuni, Seth, 2006., Manfre & Nordehn, 2013)

• Provide ways to reduce gender gap in business ownership by improving access to formal financial products, market place (Salma, 2014; Malhotra, Kanesathasan & Patel, 2012 )

• For medium-to large sized businesses, digital applications like e-filing and e-payment of taxes can help reduce the cost of tax compliance (Che Azmi et al, 2012; Handbook for Tax Simplification, IFC, 2009; Yilmaz and Coolidge , 2013)

• Can help build credit history

GLOBAL FINDEX Usage of Accounts

Wage Payments Total Percentage of Adults

Note: the height of the bar is the percentage of adults receiving wage payments.

0%

10%

20%

30%

40%

50%

60%

East Asia &Pacific


High-incomeOECD

economies



Developingeconomies

World

Into an account

60% of wage recipients in ECA

receive wages into an account

Only 19% of wage recipients

in South Asia receive wages

into an account

In cash only Globally, paying wages through accounts can increase the number of adults with an account by more

than 300 million


Government Transfer Payments Total Percentage of Adults

Note: the height of the bar is the percentage of adults receiving government transfer payments.

0%

10%

20%

30%

East Asia &Pacific


High-incomeOECD

economies



Developingeconomies

World

In cash only

Into an account

88% of transfer

recipients in Brazil receive transfers into an account

Globally, government transfers through accounts can increase

the number of adults with an account by up to 130 million


Agriculture payments Total Percentage of Adults

Note: the height of the bar is the percentage of adults receiving agriculture payments

0%

10%

20%

30%

40%

East Asia & Pacific Europe & CentralAsia

Latin America &Caribbean

Middle East South Asia Sub-Saharan Africa Developingeconomies

440 million unbanked adults in developing countries receive agricultural payments in cash

In cash only

To an account


Agriculture payments Total Percentage of Adults

Note: the height of the bar is the percentage of adults receiving agriculture payments

0%

10%

20%

30%

40%

50%

60%

70%

80%

Kenya Tanzania Uganda

In cash only

To an account


School fee payments Total Percentage of Adults

Note: the height of the bar is the percentage of adults paying school fees.

0%

10%

20%

30%

40%

East Asia & Pacific Europe & CentralAsia



Developingeconomies

Over half a billion adults in developing countries

with an account pay school fees in cash—

over a billion adults with

an account pay utility bills in cash

In cash only

From an account

In India, 230 million adults with an account

pay school fees or utilities in cash


Domestic Remittances Share of Adults sending or receiving domestic remittances, normalized

Note: the percentage of adults that report sending or receiving domestic remittances is shown in parentheses.

(26%) (28%) (24%) (17%) (17%) (18%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Developingeconomies

East Asia &Pacific




(48%)

In cash only

Using an OTC/MTO

From/ To an account

In Sub-Saharan Africa, 11% of unbanked adults

report sending or receiving domestic remittance

payments in cash/OTC

GLOBAL FINDEX Usage of accounts

Make and Receive Payments Total Percentage of Adults

Note: the height of the bar is the percentage of adults with an account

Didn’t make or receive a

payment

Received payments

only

Made & Received payments

Made payments

only 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

High Income:East Asia &

Pacific


China)



South Asia Sub-SaharanAfrica

GLOBAL FINDEX Savings

Savings behavior Total Percentage of Adults

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

High Income:OECD


China)

India South Asia(ex. India)



Sub-SaharanAfrica

Saved using an account

Saved using a community

savings group

Did not save

Saved in other ways

GLOBAL FINDEX Savings

Financial Inclusion: Semi formal savings Total Percentage of Adults

0%

10%

20%

30%

40%

50%

60%

70%

Ghana Pakistan Uganda Ethiopia Nigeria

Can double account

ownership in Ethiopia

Unbanked and saving semi-

formally

Has an account

GLOBAL FINDEX Financial Resilience

Financial Resilience: Source of emergency funds Total Percentage of Adults

Note: the height of the bar is the percentage of adults that report being able to come up the equivalent of 1/20th of GNI in a month.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

World Developing East Asia &Pacific


High Income:OECD



1.2 billion adults in developing countries say they would use

savings in case of an emergency—but 56% of these adults do not save at a financial institution

Family & Friends

Savings

Employer

GLOBAL FINDEX

www.worldbank.org/globalfindex

#Globalfindex

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the global findex data...agriculture payments . total percentage of adults . note: the height of the...

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