The Global Findex Database Measuring Financial Inclusion and the Fintech Revolution 2017 Asli Demirgüç-Kunt Leora Klapper Dorothe Singer Saniya Ansar Jake Hess Financial Inclusion in Bangladesh
Account Ownership 90% 80% 70% 60% 50% 40% 30% 20% 10% Financial institution account only Mobile money account only 24 million bkash mobile money accounts in 2018 Both Financial institution and mobile money 0% 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Note : Bhutan was not surveyed in 2017.
Bangladesh cannot reach universal access without inclusive growth Total percentage of adults 70% 60% Account ownership (50%) 50% 40% 30% 20% 10% 0% Men Richest 60% Urban Age 25+
Bangladesh cannot reach universal access without inclusive growth Total percentage of adults 70% 30 PP 60% 50% Account ownership (50%) 40% 10 PP 30% 20% 10% 0% Men Women Richest 60% Poorest 40% Urban Rural Age 25+ Ages 15-24
The gender gap in Bangladesh is growing 29pp 20pp 28pp Gender gap in Bangladesh is significantly larger than developing country average of 9 percentage points. 15pp 16pp 12pp 9pp 6pp 5pp 8pp 9pp 9pp 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Developing Country Average Note: The height of the bar is the gap in account ownership among men and women, in percentage points.
Bangladesh has one of the highest income gaps in the region 13pp 17pp 16pp 16pp 12pp The income gap in Bangladesh increased to 17 percentage points between 2014 and 2017. 12pp 14pp 15pp 6pp 5pp 5pp 7pp 5pp 2pp 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Developing Country Note: The height of the bar is the income gap in account ownership among the richest 60% of households and the poorest 40%, in percentage points.
Why do women and poor adults not have financial institution accounts? Adults without a financial institution account reporting barrier as a reason for not having one (%), 2017 Do not need an account 31% Family member already has an account Religious reasons 5% 18% Women {gaps in labor force participation} Not enough money (only reason) 25% Lack of trust 11% Lack of necessary documentation Accounts to expensive Financial institutions too far away 14% 14% 16% Women and poor {product design} Poor {digital divide} Note: Respondents could report more than one reason.
Digital inclusion is key to financial inclusion In Bangladesh, 33 million unbanked have a mobile phone - This includes 18 million women More than 70% of adults own a mobile phone 20% of adults have access to the internet Women are 24 percentage points less likely than men to own a mobile phone 86% of men own a mobile phone compared with 62% of women Women are half as likely as men to have internet access.
1 in 5 financial institution accounts are inactive 39% 21 percent of account owners have an inactive account in Bangladesh - lower than the developing country average of 15 percent of adults. 25% 14% 15% 10% 5% 3% Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Developing Country Average Note : Bhutan was not surveyed in 2017.
Fewer than 10 percent of adults formally save 50% Formal Semi-formal Other Compared with 21 percent of adults on average in developing countries. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Note: the height of the bar is the percentage of adults who reported saving in any way in the past 12 months.
A quarter of loans are from a financial institution 70% Formal (bank or credit card) Semi-formal Family/friends Other 60% 50% 40% 30% 20% 10% 0% Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Note: the height of the bar is the percentage of adults who reported borrowing in any way in the past 12 months.
Women make or receive fewer digital payments 90% 80% 70% 60% 50% 40% 30% 20% 10% Make or receive digital payments 27 pp Do not make or receive digital payments On average in developing countries, the use of digital payments increased by 12 pp between 2014 and 2017. 0% 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 2014 2017 Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Note: The height of the bar is the percentage of adults with an account. Digital payments includes sending or receiving domestic remittances from or to an account; using a debit or credit card to make a payment; making a payment over a mobile phone or using the internet; paying a utility or school fee from an account; or receiving a wage, government transfer or agricultural sale payment directly into an account.
Reaching unbanked through G2P payments Thailand South Africa Peru Mongolia Mexico Kazakhstan Iran, Islamic Rep. Indonesia India Estonia Egypt, Arab Rep. Colombia Brazil 0% 20% 40% 60% 80% 100% Opened first account to receive government transfers, pension payments, or public-sector wage payments Adults with an account Note: The height of the bar is the percentage of adults with an account. In Thailand, 20% of banked women got their first account through govt. payments Women benefit just as much as men no gender gap between men and women opening first account to receive G2P payments in developing economies In Egypt, 38% of banked women got their first account through govt. payments
Majority of agricultural payments are received in cash only 35% 30% Into an account In cash In developing economies, 1 in 5 adults who receive agricultural payments, report receiving them into an account. 25% 20% 15% 10% 5% 0% Afghanistan Bangladesh India Nepal Pakistan Sri Lanka Note: the height of the bar is the percentage of adults receiving agricultural payments.
Agricultural Payments Received In Bangladesh, 12 million unbanked adults receive agricultural payments in cash - 58 percent have a mobile phone - 7.3 million are women 40 million unbanked adults in South Asia receive agricultural payments in cash, half of whom have a mobile.
https://globalfindex.worldbank.org Where are the opportunities in Bangladesh? Unbanked and makes or receives a payment using cash Number of adults in Bangladesh, millions Receives a private wage in cash 5 million Receives an agricultural payment in cash 12 million Makes or receives an OTC domestic remittance payment 4.2 million Pays utility bill payments in cash 13 million
https://globalfindex.worldbank.org Key Takeaways: Financial inclusion is rising Digital technology, and especially widespread access to cell phones and the internet, is driving access to and use of financial services. However, women and poor adults are less likely to have an account. Often driven by big gaps in access to mobile phones Digitizing government payments can bring opportunities for shifting other private sector wage payments, agricultural payments, remittances, and savings, credit products to digital platforms. An enabling environment supported by an appropriate regulatory and consumer protection framework is key.
Materials for download & sharing: - Full report (English) - Overview of key findings (English, Arabic, Chinese, French, Spanish) - Little Data Book - The complete database in Excel, Stata, and DataBank - Data glossary in English, Spanish, and French - Individual-level data coming September 2018! - Report figures and maps and underlying data for all countries - Video animation of key trends (English, Arabic, French, Spanish) - Three annotated maps in nine languages
How can digital Government to Person (G2P) payments help? Benefits to government: Lower cost for government Increased transparency Digital pension payments reduced incidence of bribe demands and ghost recipients in India (Muralidharan et al., 2014) Mexico trimmed its spending on wages, pensions, and social welfare by 3.3 percent annually (Babatz, 2013) Benefits to recipients: Lower cost and time for the recipient Increased incentive to save Increased risk management Increased security Increased financial inclusion Mobile transfers reduced travel cost and time, increasing the time that can be spent instead on productive tasks (Aker et al., 2013). Digital salary delivery in Bangladesh increased formal savings by over 40%, compared to workers still paid in cash (Breza et al., 2018) Accounts held by poor households in Mexico and Nepal continued to deposit and maintain balances in their accounts (Aportela, 1999, and Prina, 2012, respectively) Increases in women s economic participation and empowerment
Mobile money drives the high share of mobile or internet use for payments Afghanistan 1% Bangladesh 22% India 5% Nepal 4% Pakistan 7% Sri Lanka 8% 0% 5% 10% 15% 20% 25% Note: The length of the bar is the percentage of adults that are using a mobile or the internet to make a payment..