Can financial education delivery be successfully decentralized? This paper studies a large-scale field experiment with 200 Savings and Credit Cooperative Associations (SACCOs) in Rwanda, and tests competing models of local financial education delivery.
... See More + One-third of SACCOs, randomly selected, were invited to a comprehensive training-of-trainers (TOT) workshop and stipulated to send the SACCO manager, a loan officer, and a board member to be trained. Another one-third were invited to the same workshop, but allowed free selection of trainers. The latter resulted in significantly more community members and fewer loan officers being trained as trainers. Within a year, these trainers successfully disseminated content to 68,000 households, with higher session attendance in the autonomous selection group. Analysis from follow-up surveys finds stark differences in behavior change: recipients in the autonomous selection group show significant improvements in financial attitudes, rules of thumb, and planning, as well as budgeting and savings behaviors. In contrast, recipients in the fixed selection group show no significant improvements on any of the outcome measures. These results underscore the importance of community-led delivery of financial education programs.
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Policy Research Working Paper WPS8521 JUL 11, 2018
This results brief summarizes findings from a randomized-controlled trial of the Financial Education through SACCOs program in Rwanda. Members of participating SACCOs showed improvements in financial knowledge, attitudes and behaviors when SACCOs were given the autonomy to select trainers from the local community.
... See More + For the full Policy Research Working Paper please see report number WPS8521. The program and impact evaluation were supported under the Financial Inclusion Support Framework (FISF) Rwanda Country Support Program.
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Effective and efficient market conduct supervision is critical to ensuring that financial consumers are protected from unfair business practices and provided with clear and relevant information.
... See More + Yet market conduct supervision is a challenge in many jurisdictions. Many supervisory authorities are therefore seeking technology-enabled solutions to increase the efficiency and effectiveness of their supervisory activities. This discussion note examines Suptech (that is, supervisory technology) solutions that are being adopted for market conduct supervision, including the implications of these technology solutions for broader supervisory approaches. The note provides a general examination of Suptech, as well as three country case studies that illustrate how Suptech is currently being applied by market conduct supervisory authorities—specifically, in the context of financial consumer protection (using country case studies from the United States and Lithuania) and in the context of AML/CFT (using a country case study from Brazil). The note also highlights cross-cutting considerations, including the risks and challenges that may arise with Suptech.
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Working Paper 127577 JUN 01, 2018
Boeddu,Gian Luciano; Newbury,Laura Brix; Kachingwe,Nomsa Lutepo; De Souza Neves Lopes,Ligia; Randall,DouglasDisclosed
A national financial inclusion strategy (NFIS) can provide an effective instrument to chart a clear and coordinated path toward improving financial inclusion.
... See More + An NFIS enables stakeholders to jointly define financial inclusion objectives, identify obstacles and opportunities relevant to the achievement of those objectives, and outline a prioritized set of actions to pursue in a coordinated manner. This toolkit provides financial sector authorities and other stakeholders with practical guidance on developing and operationalizing an NFIS. The toolkit covers three key areas: (i) the process of developing an NFIS, (ii) the key content of an NFIS document, and (iii) the operationalization of an NFIS. The toolkit includes detailed operational tips as well as country examples from over 20 countries. The toolkit is informed by the World Bank Group’s experience as a technical partner in the development and implementation of NFISs in a diverse range of country contexts.
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At the request of the National Treasury of the Republic of South Africa, the World Bank Group (WBG) undertook a Retail Banking Diagnostic focusing on the provision of consumer transactional accounts and fixed deposits by retail banks in South Africa.
... See More + The aim of the Retail Banking Diagnostic was to identify potential deficiencies from a fair-treatment perspective in banks’ provision of such accounts and deposits, and whether and how any identified major fair-treatment deficiencies could appropriately be addressed through market conduct regulation, having regard to international good practices and the South African market context. A WBG team visited South Africa in April 2017 and undertook discussions to inform the diagnostic with regulators, a range of banks offering consumer transactional accounts and fixed deposits, relevant financial sector ombud schemes, and industry and consumer bodies. Further discussions and inquiries and desk-based research were undertaken following the visit. Except where stated otherwise, the report reflects research undertaken up to September 2017, and it does not cover developments after that time. This report sets out the findings of the diagnostic and provides recommendations for regulatory improvements and related measures for consideration by the South African authorities. Where the report recommends legal measures to address an issue, it is envisaged that these would be implemented either through fair-treatment conduct standards made by the FSCA pursuant to section 106 of the recently passed Financial Sector Regulation Act 2017 (FSR Act) or, in due course, through the Conduct of Financial Institutions Bill (COFI Bill) being developed by the National Treasury, and subordinate legislation, such as Standards, to be developed under the resulting COFI Act (referred to collectively in the report as the “COFI/FSR Laws”).
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Working Paper 129778 JUN 01, 2018
Boeddu,Gian Luciano; De Souza Neves Lopes,Ligia; Randall,DouglasDisclosed
Financial sector authorities increasingly prioritize financial inclusion and financial consumer protection, alongside existing priorities of stability and integrity.
... See More + An enabling environment that facilitates competition, promotes innovation and the use of technology, addresses risks in a proportionate manner, and empowers financial consumers to make informed choices is critical to improving financial inclusion and consumer protection. The 2017 Global Financial Inclusion and Consumer Protection (FICP) Survey tracks the prevalence of key policy, legal, regulatory, and supervisory approaches to advancing financial inclusion and consumer protection. The 2017 Global FICP Survey covers key topics related to the enabling environment for financial inclusion and financial consumer protection, including national financial inclusion strategies, the issuance of e-money by nonbanks, agent-based delivery models, simplified customer due diligence, institutional arrangements for financial consumer protection, disclosure, dispute resolution, and financial capability. The 2017 Global FICP Survey covers regulated retail institutions that provide standard loan, deposit, or payment services. Financial sector authorities in 124 jurisdictions – representing 141 economies and more than 90 percent of the world’s unbanked adult population – responded to the 2017 Global FICP Survey. This report presents main findings from an analysis of those responses.
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The World Bank Group, at the request of the Moroccan Central Bank (Banque Al-Maghrib BAM), completed a demand-side assessment on financial capability and inclusion in Morocco.
... See More + This report is based on a nationally representative financial capability and inclusion survey, the first of its kind in Morocco and the MENA region. The engagement provides an important new data set to measure the state of financial inclusion in Morocco and is an important tool to advance policy reform needed to develop a more inclusive financial sector in Morocco. The report finds that while the state of financial inclusion in Morocco is well above the average level for the Middle East and North Africa, there are sharp variations in the use of formal financial services across different population segments. The approximately 13 million financially excluded adults in Morocco those who use no formal financial products or services - are disproportionately female, poor, and living in rural areas. The survey results further suggest that lack of financial knowledge is an important barrier that prevents people from using financial products that could potentially benefit them. Specifically, Moroccans who tap into informal sources, or those who do not save or borrow at all are found to be significantly less aware of various financial institutions and their products than those who save and borrow from formal sources. Key findings and recommendations presented in this report cover 4 main areas: 1. Financial Inclusion, 2. Financial Capability, 3. Relationship between Financial Inclusion and Capability, and 4. Financial Consumer Protection. The remaining chapters are structured as follows. Chapter 1 explores the financial inclusion landscape in Morocco. Chapter 2 gives an overview of Moroccans' levels of financial capability, in particular about their financial knowledge, attitudes and behaviors. The relationship between financial capability and inclusion is discussed in chapter 3. The last chapter investigates if the products which financially included individuals use are effectively meeting their needs.
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Working Paper 94185 DEC 01, 2014
Zottel, Siegfried; Ortega, Claudia Ruiz; Randall, Douglas; Xu, Sarah YanDisclosed
This paper uses new panel data on the number of new firm registrations in 109 countries during 2002-2012 to study the relationship between entrepreneurship and economic growth.
... See More + The data show strong evidence of a pro-cyclical pattern in entrepreneurship. An examination of heterogeneous relationships between new firm registration and the business cycle finds that higher levels of financial development and better business environments are associated with stronger pro-cyclicality of entrepreneurship both across countries and within countries over time. The results are robust to various measures of business regulation, such as the cost and time of starting a new firm and closing an insolvent firm. These findings suggest that fostering an efficient regulatory environment for the financial and private sector is important for encouraging a speedier recovery in the formation of new firms during economic expansions and aiding the efficient wind-down of insolvent firms during economic slowdowns.
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Policy Research Working Paper WPS6775 FEB 01, 2014
In recent years, the Islamic finance industry has attracted the attention of policy makers and international donors as a possible channel through which to expand financial inclusion, particularly among Muslim adults.
... See More + Yet cross-country, demand-side data on actual usage and preference gaps in financial services between Muslims and non-Muslims have been scarce. This paper uses novel data to explore the use of and demand for formal financial services among self-identified Muslim adults. In a sample of more than 65,000 adults from 64 economies (excluding countries where less than 1 percent or more than 99 percent of the sample self-identified as Muslim), the analysis finds that Muslims are significantly less likely than non-Muslims to own a formal account or save at a formal financial institution after controlling for other individual- and country-level characteristics. But the analysis finds no evidence that Muslims are less likely than non-Muslims to report formal or informal borrowing. Finally, in an extended survey of adults in five North African and Middle Eastern countries with relatively nascent Islamic finance industries, the study finds little use of Sharia-compliant banking products, although it does find evidence of a hypothetical preference for Sharia-compliant products among a plurality of respondents despite higher costs.
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Policy Research Working Paper WPS6642 OCT 01, 2013
Compared with non-Muslims, self-identified Muslims are significantly less likely to own a formal account or save at a formal financial institution, after controlling for other individual and country characteristics, according to recent research using Global Findex data.
... See More + But the authors find no evidence that Muslims are less likely to borrow formally or informally. Data from an additional survey of adults in five North African and Middle Eastern countries with relatively nascent Islamic finance industries shows very little use of Sharia-compliant banking products, though there is evidence of a hypothetical preference for Sharia-compliant products among a plurality of respondents despite higher costs. The Global Findex database and related research can help Islamic finance industry leaders expand their outreach to Muslim clients, and help policymakers more clearly define their role in expanding financial inclusion, Islamic or otherwise, to Muslim adults.
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Younger adults make up a disproportionately large share of unbanked adults worldwide. Data from the Global Financial Inclusion (Global Findex) database show that 44 percent of youth (ages 18-25) have an account at a formal financial institution, compared with 55 percent of older adults (ages 26-64).
... See More + Just 18 percent of youth report having saved formally in the past year, and 6 percent having borrowed formally. The age gap in account penetration persists across regions and across income, gender, and education groups within economies. The Global Findex database can be used to track the effects of youth-specific financial inclusion policies worldwide and develop a deeper and more nuanced understanding of how younger adults save, borrow, make payments, and manage risk.
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In Europe and Central Asia 45 percent of adults have an account with a formal financial institution though just 7 percent report having saved formally in the past year, according to new data from the Global Financial Inclusion (Global Findex) database.
... See More + And how adults use financial services differs significantly by gender, education, employment status, and other individual characteristics. The database can be used to track the effects of financial inclusion policies in Europe and Central Asia and develop a deeper and more nuanced understanding of how adults in the region save, borrow, make payments, and manage risk.
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In Europe and Central Asia 45 percent of adults have an account with a formal financial institution though just 7 percent report having saved formally in the past year, according to new data from the Global Financial Inclusion (Global Findex) database.
... See More + And how adults use financial services differs significantly by gender, education, employment status, and other individual characteristics. The database can be used to track the effects of financial inclusion policies in Europe and Central Asia and develop a deeper and more nuanced understanding of how adults in the region save, borrow, make payments, and manage risk.
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In fragile and conflict-affected states just 15 percent of adults have an account at a formal financial institution while 26 percent report having saved in the past year, according to new data from the Global Financial Inclusion (Global Findex) database.
... See More + Adults in these economies are significantly more likely than those in the rest of the developing world to report borrowing for health or emergency purposes. And the use of financial services varies sharply across groups with different individual characteristics. The Global Findex database can be used to track the effects of financial inclusion policies in fragile and conflict-affected states and develop a deeper and more nuanced understanding of how people in these economies save, borrow, make payments, and manage risk.
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In India 35 percent of adults have a formal account and 8 percent a formal loan, according to new data from the Global Financial Inclusion (Global Findex) database.
... See More + The data allow comparison with other South Asian and BRICS economies as well as within India, where they reveal deep disparities by gender and other individual characteristics in how adults use financial services. The database can be used to track the effects of financial inclusion policies in India and develop a deeper and more nuanced understanding of how people save, borrow, make payments, and manage risk.
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In Latin America and the Caribbean 8 percent of adults have a formal loan and 39 percent have a formal account, according to new data from the Global Financial Inclusion (Global Findex) database.
... See More + The data also show deep disparities across economies and individual characteristics in how adults use financial services. The database can be used to track the effects of financial inclusion policies in Latin America and the Caribbean and develop a deeper and more nuanced understanding of how adults in the region save, borrow, make payments, and manage risk.
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In Latin America and the Caribbean 8 percent of adults have a formal loan and 39 percent have a formal account, according to new data from the Global Financial Inclusion (Global Findex) database.
... See More + The data also show deep disparities across economies and individual characteristics in how adults use financial services. The database can be used to track the effects of financial inclusion policies in Latin America and the Caribbean and develop a deeper and more nuanced understanding of how adults in the region save, borrow, make payments, and manage risk.
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Trade credit is an important source of financing for firms in emerging markets. In this note, the author identify the firm and market characteristics associated with the extension of supplier financing.
... See More + The author find that firms that operate in more competitive markets and that are less credit constrained are more likely to offer trade credit to their customers. The author also find that firms operating in a competitive market were more likely to increase the volume of goods sold on credit during the crisis. Finally, the author show that in countries hit hardest by the crisis, firms under competitive pressure were relatively more likely to extend trade credit, which might suggest an additional financial burden for some firms.
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