Financial Inclusion at a Glance

June 2015

Arpitha BykereAssociate Economist, Global Macro Analysis

Felix Huefner Chief Economist, Global Macro Analysis

Tomás CondeBBVA Chair for Financial Inclusion, IIF

Dongyoon KimIntern, Global Macro Analysis

2

Financial Inclusion – From Access to Usage

Financial Access: The First Step Towards Financial Inclusion (Pages 3-10)

• Asia is leading the rise in access to financial services, but variation across and within countries remains wide

• Developed markets dominate traditional banking…• …but mobile banking and mobile money accounts are increasing rapidly in Sub-Saharan

Africa

Trends in Usage of Financial Services (Pages 11-15)

• Sub-Saharan Africa is on par with high-income countries in using mobile banking…• …but cash still dominates transfers in developing countries

Financial Inclusion and Financial Sector Development (Pages 16-17)

• Financial inclusion boosts borrowing and saving in the economy…• …and is associated with a rise in the credit-to-GDP ratio

Asia Leading the Rise in Financial Access

3

…But Rapid Catch-up in Recent Years

40% of World Population Still Without an Account…

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0

20

40

60

80

100

Account at a Financial Institution by Region in 2014 percent of 15+ years population

Source: World Bank Findex.

Global Average

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5

10

15

Increase in Account at a Financial Institution Between 2011-14 percent of 15+ years population

Source: World Bank Findex.

Financial Access is Not Progressing Evenly Within Regions

4

…While Some Other African Countries Lag Behind

Kenya Remains a Frontrunner…

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0

5

10

15

20

25

30

35

Increase in Account at a Financial Institution Between 2011-14 - Top 10 Countriespercent of 15+ years population

Source: World Bank Findex.

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Ma

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-15

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-5

0

Increase in Account at a Financial Institution Between 2011-14 - Bottom 10 Countriespercent of 15+ years population

Source: World Bank Findex.

Large Differences in Financial Access Within Countries

5

…But Income Gap Narrowing More Steadily

Slow Reduction in Gender Gap…

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10

15

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2011 2014

Account at a Financial Institution - Gap between Male and Femalepercent of 15+ years population

Source: World Bank Findex.

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0

5

10

15

20

25

30

2011 2014

Account at a Financial Institution - Gap Between Richest 60% and Poorest 40% percent of 15+ years population

Source: World Bank Findex.

6

Developed Markets Dominate in Traditional Banking

High Debit Card Ownership Leads to ATM Access in High-Income

Countries

Less than 20% of World Population Holds a Credit Card

Hig

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Mid

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0

10

20

30

40

50

Credit Card Ownership by Region in 2014 percent of 15+ years population

Source: World Bank Findex.

Global Average

Canad

a

China

, P.R

.: Mac

ao

Portug

al

Austral

ia

Russia

Brazil

Japa

n

Aruba

Isra

el

Spai

n

0

25

50

75

100

125

150

175

200

225

Number of ATMs in 2013per 100000 adults

Source: IMF Financial Access Survey.

Middle East Lags Behind in Traditional Banking Activity

7

Share of Formal Savings in High-Income Countries Nearly Twice the

Global Average

Share of Borrowers Twice as Large in Latin America Compared to Middle

East

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Mid

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5

10

15

20

Borrowed from a Financial Institutionpercent of 15+ years population

Source: World Bank Findex.

Global Average

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0

10

20

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40

50

Saved at a Financial Institutionpercent of 15+ years population

Source: World Bank Findex.

Global Average

Mobile Penetration Key Tool to Boost Financial Access

8

Sub-Saharan Africa Makes Most Use of Mobile Penetration

Mobile Penetration Exceeds Bank Account Ownership in All

Regions

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100

125

Mobile subscriptions per 100 people in 2013 (incl. prepaid + active subscrip-tions)Percent of population with an account at a financial institution in 2014

Mobile Penetration vs. Account Ownership by Region

Source: World Bank.

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50

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125

Mobile Subscriptions in 2013 (per 100 people)Used Mobile for Bank Account Transaction in 2014 (percent of popula -tion)Mobile Money Account Ownership in 2014 (percent of population)

Mobile Subscriptions, Mobile Banking and Mobile Money

Source: World Bank.

Sub-Saharan Africa Leads in Mobile Money

9

…With Kenya Being the Frontrunner

More Than 10% of Population in Sub-Saharan Africa Has a Mobile Money

Account…

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Mobile Money Account Ownership by Region in 2014 percent of 15+ years population

Source: World Bank Findex.

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60

Mobile Money Account Ownership in 2014 - Top 10 Countriespercent of 15+ years population

Source: World Bank Findex.

Growth in Mobile Money is a Recent Phenomenon

10

…But Remains Almost Non-Existent in Indonesia and

Argentina

Mobile Money Growth has Jumped in Uganda and Botswana since 2011…

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Mobile Money Account Ownership in 2014 - Bottom 10 Countriespercent of 15+ years population

Source: World Bank Findex.

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400

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2012

2013

Registered Mobile Money Accounts During 2011-2013per 1000 adults

Source: IMF Financial Access Survey.

Traditional vs. Innovative Modes of Usage

11

…But the Divide is Narrowing for Mobile Banking

High-Income Countries Still Dominate in Traditional Banking

Usage…

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Used Mobile Phone to Make a Transaction Through a Bank Account in 2014 percent of respondents with an account at a financial institution

Source: World Bank Findex.

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3 or More Withdrawals in a Typical Month

3 or More Deposits in a Typical Month

Account Usage in 2014percent of respondents with an account

Source: World Bank Findex.

Direct Deposit Services Gathering Pace

12

…But Cash Remains Important for Developing Countries Overall

8% of Sub-Saharan Population Receives Wages Through Mobile

Phone…

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40

50

60

70

80

90

Into an Account at a Financial Institu-tionThrough a Mobile Phone

Mode of Receiving Wages in 2014percent of respondents receiving wages

Source: World Bank Findex.

High Income Countries Low & Middle Income Countries

0

10

20

30

40

50

60

70

80

90

In Cash

Into an Account at a Financial Institu-tion

Through a Mobile Phone

Mode of Receiving Government Transfers in 2014percent of respondents receiving government transfers

Source: World Bank Findex.

Mobile Banking Promoting Account Usage

13

…With Greece Lagging Far BehindKenya Ahead of U.S. in Mobile Banking …

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15

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Used Mobile Phone to Make a Transaction Through a Bank Account in 2014 - Top 10 Countries percent of respondents with an account at a financial institution

Source: World Bank Findex.

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Used Mobile Phone to Make a Transaction Through a Bank Account in 2014 - Bottom 10 Countries percent of respondents with an account at a financial institution

Source: World Bank Findex.

Rising Mobile Payment Systems

14

…But Use of Mobile Phone to Pay Utility Bills is Picking Up

Cash Dominates Domestic Transfers in Most Countries…

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uth

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15

30

45

60

75

90

Handed Cash in Person or via Third Person

Via Financial Institution

Via Mobile Phone

Via Money Transfer Service

Money Received from Relative or Friend Living in Different Part of the Country in 2014percent of recipients

Source: World Bank Findex.

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30

40

50

60

70

80

Using a Mobile Phone

Using an Account at a Financial Institu-tion

Mode of Payment for Utility Bills in 2014percent of respondents paying utility bills

Source: World Bank Findex.

High Mobile Money Usage in Sub-Saharan Africa

15

…And in TransactionsTanzania and Kenya Lead in Active Mobile Money Accounts…

Ta

nza

nia

Ke

ny

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Ma

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sca

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0

200

400

600

800

1000

1200

1400

Registered AccountsAccounts Active in the Past 90 Days

Registered vs. Active Mobile Money Accounts in 2013per 1000 adults

Source: IMF Financial Access Survey.

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nza

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Ke

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0

10

20

30

40

50

60

70

Number of Transactions Per 1000 Adults ('000)Value of Transactions (% of GDP)

Mobile Money Transactions in 2013

Source: IMF Financial Access Survey.

Financial Inclusion Boosts Borrowing and Saving

16

…And Take Up MortgagesAccount Owners Tend to Save More…

0 10 20 30 40 50 60 70 80 90 100

0

10

20

30

40

50

60

70

80

f(x) = 0.48273127568464 x − 0.566680556287217R² = 0.735139774666533

Account Ownership vs. Savingsaved at a financial institution in 2014(percent of 15+ years population)

account at a financial institution in 2011 (% of 15+ years popula-tion)

Source: World Bank Findex, IIF.

0 10 20 30 40 50 60 70 80 90 100

0

5

10

15

20

25

30

35

40

45

f(x) = 0.245572648187184 x + 1.52282960633012R² = 0.666507563354138

Account Ownership vs. Mortgage from a Financial Institutionoutstanding mortgage at a financial institution in 2014 (percent of 15+ years population)

account at a financial institution in 2011 (percent of 15+ years popu-lation)

Source: World Bank Findex, IIF.

Financial Inclusion Contributes to Financial Sector Growth

17

Countries With Higher Account Ownership Experience a Rise in Credit-to-GDP in

Subsequent Years

0 10 20 30 40 50 60 70 80 90 100

0

50

100

150

200

250

300

350

400

f(x) = 1.40018125308654 x + 13.40641282022R² = 0.45697284985759

Account Ownership vs. Domestic Credit/GDPdomestic credit/GDP in 2013 (percent)

account at a financial institution in 2011

(percent of 15+ years population)Source: World Bank Findex, Haver, IIF.

Resources

World Bank Global Findex Database

IMF Financial Access Survey

World Bank Development Indicators

World Bank Financial Development and Structure Database

IIF Coverage on Financial Inclusion: https://www.iif.com/topics/financial-inclusion

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