The Global Findex Database 2017 Measuring Financial Inclusion and the Fintech Revolution The Global Findex Database 2017 Measuring Financial Inclusion and the Fintech Revolution Asli Demirgüç-Kunt Leora Klapper Dorothe Singer Saniya Ansar Jake Hess ©2018 International Bank for Reconstruction and Development/The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 21 20 19 18 This work is a product of the staff of The World Bank with external contributions. The findings, interpre- tations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. 2018. The Global Findex Database 2017: Measuring Financial Inclusion and the Fin- tech Revolution. Washington, DC: World Bank. doi:10.1596/978-1-4648-1259-0. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned indi- vidual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org. ISBN (paper): 978-1-4648-1259-0 ISBN (electronic): 978-1-4648-1268-2 DOI: 10.1596/978-1-4648-1259-0 Cover design: Hank Isaac of 495 Digital Library of Congress Cataloging-in-Publication Data has been requested CONTENTS Foreword xi Acknowledgments xiii About the Global Findex database xv Overview 1 Why financial inclusion matters for development 1 Continued growth in account ownership 2 Persistent inequality in account ownership 4 Who remains unbanked — and reasons why 4 How people make and receive payments 6 How people access and use their accounts 7 Patterns in saving, credit, and financial resilience 8 Increasing financial inclusion through digital technology 10 1 Account ownership 17 Account ownership around the world 18 Gender gaps in account ownership 23 Gaps in account ownership between richer and poorer 26 Differences in account ownership by other individual characteristics 29 2 The unbanked 35 Who the unbanked are 36 Why people remain unbanked 39 3 Payments 43 Payments from government to people 44 Payments from businesses to people — private sector wages 47 Other payments for work 49 Payments from people to businesses — utility payments 50 Payments between people — domestic remittances 50 4 Use of accounts 55 Use of accounts for digital payments 55 Use of accounts for saving 64 Accounts that remain inactive 64 | v 5 Saving, credit, and financial resilience 69 How and why people save 69 How and why people borrow 76 Financial resilience 80 Spotlight: Access to mobile phones and the internet around the world 86 6 Opportunities for expanding financial inclusion through digital technology 89 The landscape for digital payments 89 Opportunities for expanding account ownership among the unbanked 94 Opportunities for increasing the use of accounts among the banked 102 References 109 Survey methodology 111 Indicator table 123 Global Findex glossary 127 Figures O.1 The gender gap in account ownership persists in developing economies 4 O.2 More people who have an account are using it for digital payments 7 O.3 Globally, more than half of adults who save choose to do so at a financial institution 9 O.4 Borrowers are more likely to rely on formal credit in high-income economies than in developing ones 9 O.5 People in high-income economies are more likely to be able to raise emergency funds—and to do so through savings 10 1.1 Account ownership differs substantially even within income groups 18 1.2 Financial institution accounts have fueled the growth in account ownership since 2011 19 1.3 Account ownership has grown in some developing economies, stagnated in others 20 1.4 Mobile money has boosted account ownership in parts of Sub-Saharan Africa 22 1.5 Mobile money can play an important part in fragile and conflict-affected economies 22 1.6 Overall in developing economies, women are less likely than men to have an account 23 1.7 The size of the gender gap in account ownership varies across economies 23 1.8 Some developing economies have no appreciable gender gap in account ownership — and a few have one that goes the other way 24 1.9 Gender gaps in account ownership have persisted over time 24 1.10 Large gender gaps in account ownership are holding back overall progress in financial inclusion in some economies 25 1.11 In some economies mobile money accounts might be helping to narrow the gender gap in financial inclusion 26 1.12 Poorer adults are less likely than wealthier ones to have an account 27 1.13 Developing economies tend to have a large gap in account ownership between richer and poorer adults 27 1.14 The gaps in account ownership between richer and poorer have changed little since 2011 28 1.15 Mobile money accounts might be helping to reduce the gap in financial inclusion between richer and poorer in some economies 29 1.16 Older adults are more likely than young adults to have an account 30 vi | F I N D E X 2 017 1.17 The gap in account ownership between older adults and young adults varies widely among developing economies 30 1.18 Account ownership is higher among adults active in the labor force 31 1.19 Across a range of economies, adults active in the labor force are more likely to have an account 31 2.1 Nearly half of all unbanked adults live in just seven economies 36 2.2 Worldwide, most unbanked adults are women 37 2.3 Women are overrepresented among the unbanked in most economies 37 2.4 Twice as many unbanked adults live in the poorest households in their economy as in the richest ones 37 2.5 In economies where a small share of adults remain unbanked, most of the unbanked are poor 37 2.6 Three in 10 unbanked adults are between the ages of 15 and 24 38 2.7 Most unbanked adults have a primary education or less 38 2.8 Almost half of unbanked adults are out of the labor force 38 2.9 Among the unbanked, women are less likely than men to participate in the labor force 39 2.10 Self-employment is the most common form of work for unbanked adults 39 2.11 Lack of enough money is the most commonly cited barrier to account ownership 40 3.1 Except in low-income economies, most people getting government payments receive them into an account 44 3.2 In most developing economies governments make payments to people primarily into accounts 45 3.3 Some European and Central Asian economies have a particularly high share of adults receiving public sector wages 46 3.4 Government transfers are important in some developing economies—and paid mostly into accounts 46 3.5 Poorer adults are as likely as richer ones to receive government payments—and to do so into an account 47 3.6 In most G-7 economies virtually all private sector wage earners are paid into an account 48 3.7 How private sector wage earners are most likely to receive their pay varies across developing economies 48 3.8 Women are as likely as men to receive their private sector wages into an account 48 3.9 In most developing economies, though not all, agricultural payments are received mainly in cash 49 3.10 Those earning money from self- employment in developing economies are paid mostly in cash 49 3.11 One in four people paying utility bills in developing economies does so directly from an account 50 3.12 In Sub-Saharan Africa domestic remittances are particularly important—and are sent and received mainly by using an account 51 4.1 More people are using their account to make or receive digital payments 56 4.2 The share of account owners using digital payments varies widely across developing economies 56 4.3 In developing economies where most adults already had an account, a growing share are using theirs for digital payments 57 4.4 In high-income economies four-fi fths of adults use a debit or credit card 58 4.5 Debit card ownership and use have grown in developing economies, though slowly 58 CONTENTS | vii 4.6 Debit card ownership and use vary widely among developing economies 59 4.7 Half of adults in high-income economies use a mobile phone or the internet to make transactions from their account 60 4.8 Account owners in China tend to make mobile payments through apps, those in Kenya through mobile money accounts 61 4.9 More than half of adults in high-income economies use a mobile phone or the internet to check the balance in their financial institution account 61 4.10 On average in high-income economies, two-thirds of adults use the internet to pay bills or shop online 63 4.11 In developing economies a far smaller share of adults use the internet for paying bills or shopping online 63 4.12 Online shoppers tend to pay online in China — but in cash on delivery in most other developing economies 64 4.13 Most people who use their account to save also use it to make or receive digital payments 64 4.14 Globally, one in five account owners has an account that was inactive in the past year 65 4.15 In India almost half of account owners have an account that remained inactive in the past year 65 5.1 Globally, more than half of adults who save choose to do so at a financial institution 70 5.2 More account ownership does not necessarily translate into more formal saving 71 5.3 Account owners do not necessarily use their account to save—or even save at all 71 5.4 Almost a third of unbanked adults save 72 5.5 Savings behavior varies widely across developing economies 73 5.6 In developing economies men are more likely than women to save formally 74 5.7 Adults living in the poorest 40 percent of households in their economy are less likely to save formally 75 5.8 The most common source of credit in high-income economies is formal borrowing— in developing economies, family or friends 76 5.9 Individual developing economies show much variation in the most common source of credit 77 5.10 Credit card use dominates formal borrowing in high-income economies 78 5.11 People in high-income economies are more likely to be able to raise emergency funds—and to do so through savings 81 5.12 People in different developing economies may turn to different sources for emergency funds 82 5.13 For adults active in the labor force in developing economies, money from working is the main source of emergency funds 82 5.14 Among agricultural households experiencing a bad harvest or significant loss of livestock in Sub-Saharan Africa, most bear all the financial risk themselves 83 6.1 Mobile phone ownership among the unbanked varies across economies but tends to be high 92 6.2 In Sub-Saharan Africa mobile phone ownership offers large opportunities among the unbanked 93 6.3 The unbanked are relatively unlikely to have both a mobile phone and access to the internet 93 6.4 Millions of adults opened their first account to receive digital payments 94 6.5 Digitizing government payments to people could reduce the number of unbanked 96 6.6 Most unbanked adults receiving private sector wages in cash have a mobile phone 97 viii | F I N D E X 2 017 6.7 Digitizing agricultural payments could reduce the number of unbanked adults 99 6.8 Digitizing domestic remittances could have a big effect in some economies 100 6.9 Millions of unbanked adults in Sub-Saharan Africa save using semiformal methods 101 6.10 Millions of account owners receive private sector wages in cash 102 6.11 Millions of account owners receive payments for the sale of agricultural products in cash 103 6.12 In many developing economies a third or more of account owners pay utility bills in cash 105 6.13 Millions who have an account use other means to send or receive domestic remittances 105 6.14 Millions of account owners save semiformally rather than by using their account 105 Maps O.1 Today, 69 percent of adults around the world have an account 3 O.2 Mobile money accounts have spread more widely in Sub-Saharan Africa since 2014 3 O.3 Globally, 1.7 billion adults lack an account 5 O.4 Two-thirds of unbanked adults have a mobile phone 11 O.5 About 235 million unbanked adults receive agricultural payments in cash 12 O.6 A billion adults who have an account still pay utility bills in cash 13 1.1 Account ownership varies widely around the world 17 1.2 Mobile money accounts have spread more widely in Sub-Saharan Africa since 2014 21 2.1 Globally, 1.7 billion adults lack an account 35 5.1 Formal saving around the world 69 5.2 In Sub-Saharan Africa saving semiformally is much more common than saving formally 74 5.3 Formal borrowing around the world 76 5.4 Formal housing finance outstanding around the world 79 S.1 Mobile phone ownership around the world 87 6.1 Two-thirds of unbanked adults have a mobile phone 92 6.2 About 100 million unbanked adults receive government payments in cash 95 6.3 About 230 million unbanked adults in private sector jobs are paid in cash 97 6.4 About 235 million unbanked adults receive agricultural payments in cash 98 6.5 About 260 million unbanked adults use cash or an OTC service for domestic remittances 100 6.6 Nearly 1 in 10 unbanked adults saves using semiformal methods 101 6.7 A billion adults who have an account still pay utility bills in cash 104 Table A.1 Details of survey methodology for economies included in the 2017 Global Findex survey and database 113 CONTENTS | ix FOREWORD For those of us committed to advancing financial inclusion, no tool is of greater value than the Global Financial Inclusion (Global Findex) database. This invalu- able data set provides a rigorous, multidimensional picture of where we stand and how far we have come in expanding access for all to the basic financial services people need to protect themselves against hardship and invest in their futures. The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution presents key findings from the Global Findex database, with detailed insight into how adults in more than 140 economies access accounts, make pay- ments, save, borrow, and manage risk. As the data show, each economy has its own successes, challenges, and opportunities when it comes to financial inclu- sion. A growing body of research demonstrates the impact of country advances on significant priorities such as reducing poverty, hunger, and gender inequal- ity. Today, member states at the United Nations are using Global Findex data to track progress toward the Sustainable Development Goals. Dozens of national governments have adopted policies to expand financial inclu- sion. These and other global and national efforts are paying off. New Global Findex data reveal that globally the share of adults owning an account is now 69 percent, an increase of seven percentage points since 2014. These numbers translate into 515 million adults who have gained access to financial tools. The 2017 figures on overall account ownership continue the upward trajectory we’ve seen since the Global Findex database was first released—with financial inclusion rising 18 percentage points since 2011, when account ownership was 51 percent. The 2017 Global Findex data reflect the continued evolution of financial inclu- sion. Recent progress has been driven by digital payments, government policies, and a new generation of financial services accessed through mobile phones and the internet. The power of financial technology to expand access to and use of accounts is demonstrated most persuasively in Sub-Saharan Africa, where 21 percent of adults now have a mobile money account—nearly twice the share in 2014 and easily the highest of any region in the world. While mobile money has been centered in East Africa, the 2017 update reveals that it has spread to West Africa and beyond. Digital technology is also transforming the payments landscape. Globally, 52 percent of adults have sent or received digital payments in the past year, up | xi from 42 percent in 2014. Technology giants have moved into the financial sphere, leveraging deep customer knowledge to provide a broad range of financial ser- vices. Payments made through their technology platforms are facilitating higher account use in major emerging economies such as China, where 57 percent of account owners are using mobile phones or the internet to make purchases or pay bills—roughly twice the share in 2014. Some advances have been made in helping women gain access to financial ser- vices. In India three years ago, men were 20 percentage points more likely than women to have an account. Today, India’s gender gap has shrunk to 6 percent- age points thanks to a strong government push to increase account ownership through biometric identification cards. Still, in most of the world women continue to lag well behind men. Globally, 65 percent of women have an account compared with 72 percent of men, a gap of seven percentage points that is all but unchanged since 2011. Nor has equality in account ownership been achieved in other regards. The gap between rich and poor has not improved since 2014: account ownership is 13 percentage points higher among adults living in the wealthiest 60 percent of households within economies than among those in the poorest 40 percent. And urban populations continue to benefit from far broader access to finance than rural communities. In China around 200 million rural adults remain outside the formal financial system. The continued involvement of businesses will be vital for unlocking opportuni- ties to expand financial inclusion. Companies pay wages in cash to about 230 mil- lion unbanked adults worldwide; switching to electronic payrolls could help these workers join the formal financial system. Mobile phones and the internet also offer strong openings for progress: globally, one billion financially excluded adults already own a mobile phone and about 480 million have internet access. But the private sector, governments, and development organizations all need to sharpen their focus on the use of accounts, which has stagnated for saving and borrowing. Without people actively using their accounts, the impact of our work will be lost. The Global Findex database is an indispensable resource for those of us work- ing to increase financial inclusion. I am proud to partner with the Global Findex team, and I thank the World Bank’s Development Research Group and the Bill & Melinda Gates Foundation for supporting this crucial initiative. I hope govern- ments, businesses, and development champions will continue to use The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolu- tion and its trove of information as we redouble our efforts to deepen financial inclusion. Her Majesty Queen Máxima of the Netherlands UN Secretary-General’s Special Advocate for Inclusive Finance for Development Honorary Patron of the G-20’s Global Partnership for Financial Inclusion xii | F I N D E X 2 017 ACKNOWLEDGMENTS The 2017 Global Findex database was prepared by the Finance and Private Sector Development Team of the Development Research Group, by a team led by Leora Klapper under the supervision of Asli Demirgüç-Kunt and comprising Saniya Ansar, Jake Hess, Deeksha Kokas, Adrienne Sigrid Larson, and Dorothe Singer. The work was carried out under the management of Shantayanan Devarajan. The team is grateful to Tito Cordella, Robert Cull, Loretta Michaels, Sebastian-A Molineus, Ceyla Pazarbasioglu-Dutz, Mahesh Uttamchandani, and World Bank colleagues in the Development Economics Vice Presidency and the Finance, Competitiveness & Innovation Global Practice as well as staff at the Bill & Melinda Gates Foundation, the Better Than Cash Alliance, the Consultative Group to Assist the Poor, the GSM Association, the G-20’s Global Partnership for Financial Inclusion, and the Office of the UNSGSA (UN Secretary-General’s Special Advocate for Inclusive Finance for Development) for providing sub- stantive comments at different stages of the project. The team is also grateful for the excellent survey execution and related support provided by Gallup, Inc., under the direction of Jon Clifton and Joe Daly and with the support of Cynthia English and Neli Esipova. The team is especially grateful to the Bill & Melinda Gates Foundation for pro- viding financial support making the collection and dissemination of the data possible. Maps were created by Tariq Afzal Khokhar and Andrew Michael Whitby from the World Bank’s Development Data Group. Bruno Bonansea from the World Bank’s Map Design Unit provided guidance on maps. A team at Communica- tions Development Incorporated led by Bruce Ross-Larson managed the design and typesetting. Hank Isaac at 495 Digital designed the cover. Alison Strong provided editorial assistance. The production team included Patricia Katayama (acquisitions) and Susan Graham (project manager). | xiii ABOUT THE GLOBAL FINDEX DATABASE In 2011 the World Bank—with funding from the Bill & Melinda Gates Foundation —launched the Global Findex database, the world’s most comprehensive data set on how adults save, borrow, make payments, and manage risk. Drawing on sur- vey data collected in collaboration with Gallup, Inc., the Global Findex database covers more than 140 economies around the world. The initial survey round was followed by a second one in 2014 and by a third in 2017. Compiled using nationally representative surveys of more than 150,000 adults age 15 and above in over 140 economies, the 2017 Global Findex database includes updated indicators on access to and use of formal and informal financial services. It has additional data on the use of financial technology (or fintech), including the use of mobile phones and the internet to conduct financial trans- actions. The data reveal opportunities to expand access to financial services among people who do not have an account—the unbanked—as well as to promote greater use of digital financial services among those who do have an account. The Global Findex database has become a mainstay of global efforts to promote financial inclusion. In addition to being widely cited by scholars and develop- ment practitioners, Global Findex data are used to track progress toward the World Bank goal of Universal Financial Access by 2020 and the United Nations Sustainable Development Goals. The database, the full text of the report, and the underlying country-level data for all figures—along with the questionnaire, the survey methodology, and other relevant materials—are available at http://www.worldbank.org/globalfindex. All regional and global averages presented in this publication are population weighted. Regional averages include only developing economies (low- and middle-income economies as classified by the World Bank). The reference citation for the 2017 Global Findex data is as follows: Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. 2018. The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. Washington, DC: World Bank. | xv OVERVIEW Financial services can help drive development. They help people escape poverty by facilitating investments in their health, education, and businesses. And they make it easier to manage financial emergencies—such as a job loss or crop failure —that can push families into destitution.1 Many poor people around the world lack the financial services that can serve these functions, such as bank accounts and digital payments. Instead, they rely on cash—which can be unsafe and hard to manage. That’s why the World Bank has made it a key priority to promote financial inclusion—access to and use of formal financial services. Why financial inclusion matters for development A growing body of research reveals many potential development benefits from financial inclusion—especially from the use of digital financial services, includ- ing mobile money services, payment cards, and other financial technology (or fintech) applications. While the evidence is somewhat mixed, even studies that do not find positive results often point to possibilities for achieving better out- comes through careful attention to local needs.2 The benefits from financial inclusion can be wide ranging. For example, stud- ies have shown that mobile money services—which allow users to store and transfer funds through a mobile phone—can help improve people’s income- earning potential and thus reduce poverty. A study in Kenya found that access to mobile money services delivered big benefits, especially for women. It enabled women-headed households to increase their savings by more than a fifth; allowed 185,000 women to leave farming and develop business or retail activi- ties; and helped reduce extreme poverty among women-headed households by 22 percent.3 Digital financial services can also help people manage financial risk—by mak- ing it easier for them to collect money from distant friends and relatives when times are tough. In Kenya researchers found that when hit with an unexpected drop in income, mobile money users did not reduce household spending—while nonusers and users with poor access to the mobile money network reduced their purchases of food and other items by 7–10 percent.4 | 1 In addition, digital financial services can lower the cost of receiving payments. In a five-month relief program in Niger, switching the monthly payment of gov- ernment social benefits from cash to mobile phones saved the recipients 20 hours on average in overall travel and wait time to obtain the payments.5 Financial services can also help people accumulate savings and increase spend- ing on necessities. After being provided with savings accounts, market vendors in Kenya, primarily women, saved at a higher rate and invested 60 percent more in their businesses.6 Women-headed households in Nepal spent 15 percent more on nutritious foods (meat and fish) and 20 percent more on education after receiving free savings accounts.7 And farmers in Malawi who had their earnings deposited into savings accounts spent 13 percent more on farming equipment and increased their crop values by 15 percent.8 For governments, switching from cash to digital payments can reduce corrup- tion and improve efficiency. In India the leakage of funds for pension payments dropped by 47 percent (2.8 percentage points) when the payments were made through biometric smart cards rather than being handed out in cash.9 In Niger, distributing social transfers through mobile phones rather than in cash reduced the variable cost of administering the benefits by 20 percent.10 Continued growth in account ownership The Global Findex database shows that 515 million adults worldwide opened an account at a financial institution or through a mobile money provider between 2014 and 2017. This means that 69 percent of adults now have an account, up from 62 percent in 2014 and 51 percent in 2011. In high-income economies 94 percent of adults have an account; in developing economies 63 percent do. There is also wide variation in account ownership among individual economies (map O.1). The vast majority of account owners have an account at a bank, a microfinance institution, or another type of regulated financial institution. Sub-Saharan Africa is the only region where the share of adults with a mobile money account exceeds 10 percent. This was also true in 2014. At that time East Africa was the region’s mobile money hub. But mobile money accounts have since spread to new parts of Sub-Saharan Africa (map O.2). The share of adults with a mobile money account has now surpassed 30 percent in Côte d’Ivoire and Senegal—and 40 per- cent in Gabon. Mobile money accounts have also taken root in economies outside Sub-Saharan Africa. In some, the share of adults with a mobile money account has reached about 20 percent or more—including Bangladesh, the Islamic Republic of Iran, Mongolia, and Paraguay. 2 | F I N D E X 2 017 MAP O.1 Today, 69 percent of adults around the world have an account Adults with an account (%), 2017 0–19 20–39 40–64 65–89 90–100 No data Source: Global Findex database. MAP O.2 Mobile money accounts have spread more widely in Sub-Saharan Africa since 2014 Adults with a mobile money account (%) 2014 2017 0–9 10–19 20–29 30–39 40–100 No data Source: Global Findex database. Note: Data are displayed only for economies in Sub-Saharan Africa. OVERVIE W | 3 FIGURE O.1 Persistent inequality in account The gender gap in account ownership ownership persists in developing economies Adults with an account (%) Even as account ownership continues to grow, 100 inequalities persist. While 72 percent of men 80 High-income economies have an account, 65 percent of women do. That gender gap of 7 percentage points was also pres- 60 ent in 2014 and 2011. In developing economies 40 Developing economies the gender gap remains unchanged at 9 percent- 20 age points (figure O.1). 0 Nor has the gap between richer and poorer nar- 2011 2014 2017 rowed. Among adults in the richest 60 percent of Men Women households within economies, 74 percent have an Source: Global Findex database. account. But among those in the poorest 40 per- cent, only 61 percent do, leaving a global gap of 13 percentage points. The difference is similar in developing economies, and nei- ther gap has changed meaningfully since 2014. Account ownership is also lower among young adults, the less educated, and those who are out of the labor force. But the picture is not entirely bleak. Consider India, where a strong govern- ment push to increase account ownership through biometric identification cards helped narrow both the gender gap and the gap between richer and poorer adults. And several developing economies have no significant gender gap, includ- ing Argentina, Indonesia, and South Africa. Who remains unbanked —and reasons why Globally, about 1.7 billion adults remain unbanked—without an account at a financial institution or through a mobile money provider. Because account ownership is nearly universal in high-income economies, virtually all these unbanked adults live in the developing world. Indeed, nearly half live in just seven developing economies: Bangladesh, China, India, Indonesia, Mexico, Nigeria, and Pakistan (map O.3). Fifty-six percent of all unbanked adults are women. Women are overrepre- sented among the unbanked in economies where only a small share of adults are unbanked, such as China and India, as well as in those where half or more are, such as Bangladesh and Colombia. Poorer people also account for a disproportionate share of the unbanked. Glob- ally, half of unbanked adults come from the poorest 40 percent of households within their economy, the other half from the richest 60 percent. But the pattern varies among economies. In those where half or more of adults are unbanked, the unbanked are as likely to come from a poorer household as from a wealthier one. In economies where only about 20–30 percent of adults are unbanked, how- ever, the unbanked are much more likely to be poor. 4 | F I N D E X 2 017 MAP O.3 Globally, 1.7 billion adults lack an account Adults without an account, 2017 1 million 10 million 100 million 200 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less. Unbanked adults are more likely to have low educational attainment. In the developing world about half of all adults have a primary education or less. Among unbanked adults the share is close to two-thirds. Slightly more than a third of the unbanked have completed high school or postsecondary education. Those active in the labor force are less likely to be unbanked. While about 37 per- cent of all adults in the developing world are out of the labor force, 47 percent of unbanked adults are. Among the unbanked, women are more likely than men to be out of the labor force. To shed light on why people are unbanked, the 2017 Global Findex survey asked adults without a financial institution account why they do not have one. Most offered two reasons. The most common one was having too little money to use an account. Two-thirds cited this as a reason for not having a financial institution account, and roughly a fifth cited it as the sole reason. Cost and distance were each cited by about a quarter of those responding to the question, and a simi- lar share said they do not have an account because a family member already has one. Lack of documentation and distrust in the financial system were both cited by roughly a fifth of adults without a financial institution account, and religious concerns by 6 percent. OVERVIE W | 5 How people make and receive payments Most people make payments, such as for utility bills or to send money to relatives in another part of the country. And most receive payments, such as wages or gov- ernment transfers. The 2017 Global Findex survey asked people what kinds of payments they make and receive and how they carry out these transactions— whether by using an account or in cash. Payments from government Globally, nearly a quarter of adults receive payments from the government— whether public sector wages, a public sector pension, or government transfers (social benefits such as subsidies, unemployment benefits, or payments for edu- cational or medical expenses). In high-income economies 43 percent of adults receive such payments; the share is half as large in developing economies. Except in the poorest economies, most people getting government payments receive them into an account. Payments for work The Global Findex data also cover payments for private sector wages as well as other payments for work—such as payments for the sale of agricultural products. Globally, 28 percent of adults receive private sector wages—46 percent of adults in high-income economies and 24 percent in developing ones. In high-income economies most receive these payments into an account; in developing econo- mies only about half do so. About 15 percent of adults in developing economies receive payments for the sale of agricultural products—and almost all receive these payments in cash. But in some economies in Sub-Saharan Africa—such as Ghana, Kenya, and Zambia— about 40 percent of those getting agricultural payments receive them into an account, in most cases a mobile money account. Domestic remittance payments Domestic remittances—money sent to or received from relatives or friends in another part of the country—are an important part of the economy in many places. This is particularly so in Sub-Saharan Africa, where nearly half of adults send or receive such payments. In developing economies those sending or receiv- ing domestic remittances are most likely to use an account to do so: 46 percent rely on an account, while 27 percent use cash, 19 percent an over-the-counter service, and 8 percent some other method. This pattern generally holds among many developing economies, including those in Sub-Saharan Africa. 6 | F I N D E X 2 017 How people access and use their accounts Owning an account is an important first step toward financial inclusion. But to fully benefit from having an account, people need to be able to use it in safe and convenient ways. The Global Findex database provides insights into not only who owns an account but whether and how people use their account for payments. For digital payments FIGURE O.2 More people who have an account are Globally, 52 percent of adults—or 76 percent using it for digital payments Adults with an account (%) of account owners—reported having made or received at least one digital payment using their High-income Developing World economies economies account in the past year. In high-income econo- 100 mies the share was 91 percent of adults (97 per- 80 cent of account owners), in developing economies 60 44 percent of adults (70 percent of account owners). 40 20 The use of digital payments is on the rise. The share of adults around the world making or 0 2014 2017 2014 2017 2014 2017 receiving digital payments increased by 11 per- Made or received digital payments in the centage points between 2014 and 2017 (figure past year O.2). In developing economies the share of adults Did not make or receive digital payments in the past year using digital payments rose by 12 percentage points, to 44 percent. Source: Global Findex database. Through a mobile phone or the internet Mobile phones and the internet increasingly offer an alternative to debit and credit cards for making direct payments from an account. In high-income econ- omies 51 percent of adults (55 percent of account owners) reported making at least one financial transaction in the past year using a mobile phone or the inter- net. In developing economies 19 percent of adults (30 percent of account owners) reported making at least one direct payment using a mobile money account, a mobile phone, or the internet. Ways of using a mobile phone When it comes to using a mobile phone for financial services, China and Kenya represent two different models. In China mobile financial services are provided primarily through third-party payment service providers such as Alipay and WeChat using smartphone apps linked to an account at a bank or another type of financial institution. By contrast, in Kenya mobile financial services are offered mainly by mobile network operators, and mobile money accounts do not need to be linked to an account at a financial institution. In Kenya most account owners have both a financial institution account and a mobile money account. This is reflected in how people make mobile payments. Forty percent of adults use only a mobile money account to make such payments. OVERVIE W | 7 Another 29 percent rely on two methods—using a mobile money account and using a mobile phone or the internet to access their financial institution account. And 2 percent make mobile payments only by using a mobile phone or the inter- net to access their financial institution account. In China 40 percent of adults make mobile payments. Ways of using the internet Another way that people make digital payments is by using the internet, to pay bills or to buy something online. Globally, 29 percent of adults used the internet for one of these two purposes in the past year. But the share ranged from 68 per- cent of adults in high-income economies to 49 percent in China to an average of just 11 percent in developing economies excluding China. Buying something online does not necessarily mean paying for it online. In many developing economies people commonly pay cash on delivery for internet orders. To measure how common that practice is, the 2017 Global Findex survey asked people in developing economies how they pay for internet purchases. On average in all developing economies except China, 53 percent of adults who made an inter- net purchase in the past 12 months paid for it in cash on delivery. In China, by contrast, 85 percent of adults who bought something online also paid for it online. Inactive accounts Not all people who have an account actively use it. Globally, about a fifth of account owners reported making no deposit and no withdrawal—in digital form or otherwise—in the past 12 months and therefore have what can be considered an inactive account.11 The share with an inactive account varies across econo- mies but is especially high for many economies in South Asia. Patterns in saving, credit, and financial resilience Saving money, accessing credit, and managing financial risk are all key aspects of financial inclusion. Global Findex data show how and why people save and borrow and shed light on their ability to meet unexpected expenses. Saving for the future About half of adults worldwide reported saving money in the past year. In high- income economies 71 percent reported saving, while in developing economies 43 percent did (figure O.3). People save money in different ways. Many save for- mally, such as by using an account at a financial institution. In high-income econ- omies more than three-quarters of savers (55 percent of all adults) save using this method; in developing economies just under half of savers (21 percent of all adults) save this way. A common alternative is to save semiformally, by using a savings club—particularly common in Sub-Saharan Africa—or by entrusting sav- ings to someone outside the family. And some save in some other way. This may include simply saving in cash at home (“under the mattress”) or saving in the 8 | F I N D E X 2 017 form of livestock, jewelry, or real estate. It may FIGURE O.3 also include using investment products offered Globally, more than half of adults who by equity and other traded markets or purchas- save choose to do so at a financial ing government securities. institution Adults saving any money in the past year (%), 2017 100 Savings patterns also vary by gender and income. In developing economies men are 6 percentage 80 points more likely than women to save at a finan- 60 cial institution, while wealthier adults are 15 per- centage points more likely than poorer adults 40 to do so. In high-income economies wealthier 20 adults are 23 percentage points more likely than 0 poorer adults to save formally. High-income Developing economies economies Nearly half of adults in high-income economies Saved Saved Saved using other reported saving for old age. In developing econo- formally semiformally methods only mies only 16 percent did. And in high-income and Source: Global Findex database. developing economies alike, 14 percent reported Note: People may save in multiple ways, but categories saving to start, operate, or expand a business. are constructed to be mutually exclusive. Saved Saving for a business is more common in many formally includes all adults who saved any money formally. Saved semiformally includes all adults who Sub-Saharan African economies—reported by saved any money semiformally but not formally. Data 29 percent or more of adults in Ethiopia, Kenya, on semiformal saving are not collected in most high- income economies. and Nigeria, for example. Borrowing money FIGURE O.4 Borrowers are more likely to rely on About half of adults worldwide reported borrow- formal credit in high-income economies ing money in the past year. A higher share did so than in developing ones Adults borrowing any money in the past year (%), 2017 in high-income economies, where most borrow- 80 ers rely on formal credit, extended by a financial institution or through a credit card. By contrast, 60 borrowers in developing economies are most likely to turn to family or friends (figure O.4). 40 For what purposes do people borrow? One com- 20 mon purpose is to buy land or a home, the largest 0 financial investment that many people make in High-income Developing their life. In 2017, 27 percent of adults in high- economies economies income economies reported having an outstand- Borrowed formally Borrowed semiformally ing housing loan from a bank or another type Borrowed from Borrowed from family or friends other sources only of financial institution. In contrast, that share Source: Global Findex database. was typically less than 10 percent in developing Note: People may borrow from multiple sources, but economies. categories are constructed to be mutually exclusive. Borrowed formally includes all adults who borrowed any money from a financial institution or through the Coming up with emergency funds use of a credit card. Borrowed semiformally includes all adults who borrowed any money semiformally (from a savings club) but not formally. Borrowed from family To measure financial resilience, the 2017 Global or friends excludes adults who borrowed formally or Findex survey asked respondents whether it would semiformally. OVERVIE W | 9 FIGURE O.5 People in high-income economies are more likely to be able to raise emergency funds—and to do so through savings Adults able to raise emergency funds (%), 2017 High-income economies Developing economies 0 20 40 60 80 Main source of funds Savings Money from working Borrowing from a bank, an Family or friends employer, or a private lender Other Source: Global Findex database. Note: Other includes all respondents who chose “selling assets,” “other sources,” “don’t know,” or “refuse” as their response for main source of emergency funds. be possible to come up with an amount equal to 1/20 of gross national income (GNI) per capita in local currency within the next month. It also asked what their main source of funding would be. Those in high-income economies were far more likely to say they could raise emergency funds (figure O.5). Among the respondents saying they could come up with funds, most in high-income economies said they would rely on savings, while most in developing economies said they would turn to family or friends or use money from working. Among those in developing economies who cited savings as their main source of funding, 85 percent have an account, but only 50 percent reported having saved at a financial institution. Increasing financial inclusion through digital technology Since being launched in 2011, the Global Findex database has provided insights into ways to increase financial inclusion. The 2017 edition, for the first time, features data on mobile phone ownership and access to the internet, revealing unprecedented opportunities to reduce the number of adults without an account and to help those who have one use it more often. Of course, digital technology alone is not enough to increase financial inclusion. To ensure that people benefit from digital financial services requires a well- developed payments system, good physical infrastructure, appropriate regu- lations, and vigorous consumer protection safeguards. And whether digital or analogue, financial services need to be tailored to the needs of disadvantaged groups such as women, poor people, and first-time users of financial services, who may have low literacy and numeracy skills. Having a simple mobile phone can potentially open access to mobile money accounts and other financial services. Having access to the internet as well 10 | F I N D E X 2 017 MAP O.4 Two-thirds of unbanked adults have a mobile phone Adults without an account owning a mobile phone, 2017 1 million 10 million 100 million 200 million Sources: Global Findex database; Gallup World Poll 2017. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less. expands the range of possibilities. These technologies could help overcome bar- riers that unbanked adults say prevent them from accessing financial services. Mobile phones could eliminate the need to travel long distances to a financial institution. And by lowering the cost of providing financial services, digital tech- nology might increase their affordability. How many unbanked adults have a mobile phone? Globally, about 1.1 billion—or about two-thirds of all unbanked adults. In India and Mexico more than 50 per- cent of the unbanked have a mobile phone; in China 82 percent do (map O.4). Fewer unbanked adults have both a mobile phone and access to the internet in some form—whether through a smartphone, a home computer, an internet café, or some other way. Globally, the share is about a quarter. But just as for accounts, access to digital technology—whether a mobile phone or both a mobile phone and the internet—tends to be lower among women, poorer adults, the less edu- cated, and other traditionally disadvantaged groups. Ways to increase the ownership of accounts By moving routine cash payments into accounts, governments and businesses could help dramatically reduce the number of unbanked adults. Governments make several types of payments to people—paying wages to public sector OVERVIE W | 11 MAP O.5 About 235 million unbanked adults receive agricultural payments in cash Adults without an account receiving payments for agricultural products in the past year in cash only, 2017 1 million 10 million 100 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less or the share receiving payments for agricultural products is 10 percent or less. workers, distributing public sector pensions, and providing government trans- fers to those needing social benefits. Digitizing these payments could reduce the number of unbanked adults by up to 100 million globally. Many of these adults have the basic technology needed to receive these payments in digital form. Of the 60 million unbanked adults worldwide who receive government transfers in cash, two-thirds have a mobile phone. Even bigger opportunities are available in the private sector. Globally, about 230 million unbanked adults work in the private sector and get paid in cash only —and 78 percent of these wage earners have a mobile phone. Unbanked farmers could benefit from the security and convenience of digital payments for agricultural sales. About 235 million unbanked adults worldwide receive cash payments for the sale of agricultural products (map O.5)—and 59 percent of them have a mobile phone. Digitizing agribusiness supply chains could also build payment histories and help expand access to credit and insur- ance for small farmers. Ways to increase the use of accounts While financial inclusion starts with having an account, the benefits come from actively using that account—for saving money, for managing risk, for making or 12 | F I N D E X 2 017 MAP O.6 A billion adults who have an account still pay utility bills in cash Adults with an account paying utility bills in the past year in cash only, 2017 1 million 10 million 100 million 200 million Source: Global Findex database. receiving payments. Global Findex data point to many opportunities to help peo- ple who already have an account make better use of it. Globally, a billion adults who have an account still use cash to pay utility bills (map O.6). If more utility providers offered an attractive option for paying bills digitally, both sides could benefit from greater efficiency. Many adults who are employed and have an account still get paid in cash. About 300 million account owners worldwide work in the private sector and get paid in cash, while roughly 275 million account owners receive cash payments for the sale of agricultural products. And roughly 280 million account owners in developing economies use cash or an over-the-counter service to send or receive domestic remittances—including 10 million in Bangladesh and 65 million in India. Notes 1. For overviews of how financial inclusion can drive development, see Karlan and others (2016); and Demirgüç-Kunt, Klapper, and Singer (2017). 2. A study on extending basic, no-frills accounts to the rural poor in Chile, Malawi, and Uganda, for example, found no evidence that doing so led to overall increases in savings OVERVIE W | 13 or improvements in such outcomes as health, schooling, or consumption (Dupas and others, forthcoming). The study speculates that several factors limited the impact of expanding access to accounts: the accounts not being tailored to specific needs, high transaction costs in using the accounts, and the individuals included in the study being poorer compared with those in other studies. Moreover, innovations making it easier and less costly to carry out financial transactions can have unintended consequences. In Kenya, for example, a study providing account owners with free automated teller machine (ATM) cards increased the accessibility of accounts, but this made accounts less attractive to women who used them to keep personal savings away from husbands with greater bargaining power (Schaner 2017). 3. Suri and Jack (2016). 4. Jack and Suri (2014). 5. Aker and others (2016). 6. Dupas and Robinson (2013). However, the study found no such impact for men working as bicycle taxi drivers. 7. Prina (2015). 8. Brune and others (2016). 9. Muralidharan, Niehaus, and Sukhtankar (2016). 10. Aker and others (2016). 11. It is not possible to ascertain whether accounts with no deposit and no withdrawal in the past 12 months are “dormant,” as they may be used for long-term saving. 14 | F I N D E X 2 017 1 ACCOUNT OWNERSHIP Globally, 69 percent of adults have an account. That gives them an important financial tool. Accounts provide a safe way to store money and build savings for the future. They also make it easier to pay bills, access credit, make purchases, and send or receive remittances. Having an account is therefore used by the World Bank and others as a marker of financial inclusion. The 2017 Global Findex database defines account ownership as having an indi- vidual or jointly owned account either at a financial institution or through a mobile money provider. The first category includes accounts at a bank or another type of formal, regulated financial institution, such as a credit union, a coopera- tive, or a microfinance institution.1 The second consists of mobile phone–based services, not linked to a financial institution, that are used to pay bills or to send MAP 1.1 Account ownership varies widely around the world Adults with an account (%), 2017 0–19 20–39 40–64 65–89 90–100 No data Source: Global Findex database. | 17 or receive money. These mobile money accounts allow people to store money and to send and receive electronic payments.2 To identify people with a mobile money account, the 2017 Global Findex survey asked respondents about their use of specific services available in their economy —such as M-PESA, MTN Mobile Money, Airtel Money, or Orange Money—and included in the GSM Association’s Mobile Money for the Unbanked (GSMA MMU) database. The definition of a mobile money account is limited to services that can be used without an account at a financial institution. People using a mobile money account linked to their financial institution are considered to have an account at a financial institution. The question on mobile money accounts was asked only in the 77 economies—among the 144 included in the survey—where the GSMA MMU database indicates that mobile money accounts were available at the time the survey was carried out. Account ownership around the world Account ownership is nearly universal in high-income economies, where 94 per- cent of adults have an account. In developing economies—those classified by the World Bank as low or middle income—the share is 63 percent. But there is wide variation in account ownership among economies (map 1.1). Indeed, there are large differences even within income groups (figure 1.1). Con- sider the lower-middle-income group, where the share of adults with an account varies from about 20 percent in Cambodia, Mauritania, and Pakistan to as high as 93 percent in Mongolia. Among high-income economies the share with an account ranges from 64 percent in Uruguay to 100 percent in such economies as Australia, Denmark, and the Netherlands. Among the 69 percent of adults around the world who are account owners, the vast majority have an account at a financial institution: 64 percent of all adults FIGURE 1.1 Account ownership differs substantially even within income groups Adults with an account (%), 2017 High-income economies Upper-middle-income economies Lower-middle-income economies Low-income economies 0 20 40 60 80 100 Source: Global Findex database. 18 | F I N D E X 2 017 reported having a financial institution account only; 3 percent having a financial institution account as well as a mobile money account; and 1 percent a mobile money account only. What are the trends since 2011? The first Global Findex survey was completed in 2011, followed by a second round in 2014 and the latest one in 2017. Globally over those intervals, the share of adults with an account rose from 51 percent to 62 percent and then to 69 per- cent (figure 1.2). Among developing economies, however, the growth in account ownership has been far from uniform (figure 1.3). In India the share of adults with an account has more than doubled since 2011, to 80 percent. An important factor driving this increase was a government policy launched in 2014 to boost account owner- ship among unbanked adults through biometric identification cards.3 This policy benefited traditionally excluded groups and helped ensure inclusive growth in account ownership. Between 2014 and 2017 account ownership in India rose by more than 30 percentage points among women as well as among adults in the poorest 40 percent of households. Among men and among adults in the wealth- iest 60 percent of households it increased by about 20 percentage points. Indo- nesia also saw equitable growth in account ownership among men and women as the overall share of adults with an account rose from 20 percent in 2011 to 49 percent in 2017. Some economies have had gains in account ownership but missed out on oppor- tunities for greater progress because women were insufficiently included. In Pakistan, for example, account ownership has doubled since 2011, though it started from a low base of 10 percent. But while it surged among men, it stag- nated among women. In Ethiopia account ownership has risen by 18 percent- age points among men since 2014, roughly twice the size of the increase among women. Bangladesh has also had uneven progress, with slower gains among FIGURE 1.2 Financial institution accounts have fueled the growth in account ownership since 2011 Adults with an account (%) High-income Developing World economies economies 100 80 Financial institution 60 account only Financial institution and 40 mobile money accounts Mobile money account only 20 0 2011 2014 2017 2011 2014 2017 2011 2014 2017 Source: Global Findex database. Note: No data are available for the share of adults with a mobile money account for 2011. ACCO U N T O W N E R S H I P | 19 FIGURE 1.3 women. Yet the picture is not entirely bleak in Account ownership has grown in some these economies. Most have seen account own- developing economies, stagnated in ership rise among women and poorer adults. But others more inclusive growth in account ownership Adults with an account (%) would have led to faster overall progress. Bangladesh Account ownership has remained largely unchanged in developing economies where it was Brazil already about 70 percent or more in 2014, such as Brazil, China, Malaysia, and South Africa. China How important are mobile money Egypt, Arab Rep. accounts? The Global Findex survey first collected data Ethiopia on mobile money accounts in 2014. These data showed that 12 percent of adults in Sub-Saharan India Africa had a mobile money account, while 2 percent did globally. Today Sub-Saharan Africa Indonesia remains the global leader in the use of mobile money: 21 percent of adults in the region have Malaysia a mobile money account. Among this group, nearly half reported having only a mobile money Mexico account, while the other half reported having a financial institution account as well. Nigeria Mobile money accounts are particularly wide- spread in Kenya, where 73 percent of adults Pakistan have one, as well as in Uganda and Zimbabwe, where about 50 percent do (map 1.2). Sub- Philippines Saharan Africa is also home to all 10 economies worldwide where more adults have a mobile Russian Federation money account than have a financial institu- tion account: Burkina Faso, Chad, Côte d’Ivoire, South Africa Gabon, Kenya, Mali, Senegal, Tanzania, Uganda, and Zimbabwe. 0 20 40 60 80 100 2011 2014 2017 In 2014 mobile money accounts were concen- Source: Global Findex database. trated largely in East Africa. Now these accounts Note: No data are available for Ethiopia for 2011. have spread to West Africa and beyond. In West Africa the share of adults owning a mobile money account has risen to about 33 percent in Burkina Faso, Côte d’Ivoire, and Senegal—and to 39 per- cent in Ghana. And it has reached nearly 45 per- cent in both Gabon and Namibia. 20 | F I N D E X 2 017 MAP 1.2 Mobile money accounts have spread more widely in Sub-Saharan Africa since 2014 Adults with a mobile money account (%) 2014 2017 0–9 10–19 20–29 30–39 40–100 No data Source: Global Findex database. Note: Data are displayed only for economies in Sub-Saharan Africa. Sub-Saharan Africa may be the only region where more than 10 percent of adults have a mobile money account, but the technology has taken root in other parts of the world as well. In Haiti the share of adults with a mobile money account rose from 4 percent in 2014 to 14 percent in 2017. In Bangladesh the share jumped from 3 percent to 21 percent. Other economies too have seen an increase from the low single digits to about 20 percent or more—including Chile, the Islamic Republic of Iran, and Mongolia. Three years ago in Turkey, few adults had a mobile money account. Now 16 percent do. In Paraguay 29 percent have a mobile money account. But these economies are not typical of global trends. Outside Sub-Saharan Africa mobile money accounts did not drive the growth in overall account ownership between 2011 and 2017. Most new accounts opened in this period were financial institution accounts (see figure 1.2). Within Sub-Saharan Africa the share of adults with a financial institution account has risen by a modest 4 percentage points since 2014, while the share with a mobile money account has grown roughly twice as fast—increasing by 9 percentage points. But the extent to which mobile money accounts raised overall account ownership between 2014 and 2017 varies among economies in the region. In Côte d’Ivoire the share of adults with only a mobile money account increased by 8 percentage points, while the share with both types of accounts or only a financial institution account stagnated. Trends were largely ACCO U N T O W N E R S H I P | 21 FIGURE 1.4 FIGURE 1.5 Mobile money has boosted account Mobile money can play an important part ownership in parts of Sub-Saharan Africa in fragile and conflict-affected economies Adults with an account (%) Adults with an account (%), 2017 2014 Afghanistan Burkina Faso 2017 Chad Côte d’Ivoire 2014 Haiti Gabon 2017 Iraq Liberia 2014 Ghana Madagascar 2017 Mali Myanmar 2014 Kenya Sierra Leone 2017 Togo 2014 0 10 20 30 40 50 Senegal 2017 Financial institution account only Financial institution and mobile money accounts Mobile money account only 2014 South Africa Source: Global Findex database. 2017 Note: The figure shows only fragile and conflict- affected economies for which data on mobile money 2014 accounts are collected. Tanzania 2017 similar in Tanzania and Uganda (figure 1.4). In 2014 some economies—such as Burkina Faso, Gabon, Uganda 2017 Ghana, and Senegal—there were large increases in the share of adults with only a mobile money 2014 account as well as in the share with both types Zambia 2017 of accounts. And in still others—such as Kenya, Zambia, and Zimbabwe—the biggest growth 2014 occurred in the share with both types of Zimbabwe accounts. 2017 0 20 40 60 80 Mobile money accounts play an important part Financial institution account only in some fragile and conflict-affected economies, Financial institution and mobile money accounts including areas requiring urgent emergency Mobile money account only responses, such as Ebola-affected West Africa Source: Global Findex database. and earthquake-stricken Haiti. Overall account ownership is low in these economies, with only 27 percent of adults reporting having an account, but mobile money accounts pro- vide an important boost in some of them. In Haiti as well as fragile and conflict- affected economies in Sub-Saharan Africa more than 40 percent of account owners have a mobile money account (figure 1.5). And in Côte d’Ivoire 83 per- cent of account owners have a mobile money account, 64 percent a mobile money account only. 22 | F I N D E X 2 017 Gender gaps in account ownership The growth in account ownership since 2011 has not benefited all groups equally. Women still are less likely than men to have an account. Globally, 72 percent of men and 65 percent of women have an account, a gender gap of 7 percent- age points (figure 1.6). The gender gap is similar in developing economies, with 67 percent of men but only 59 percent of women having an account. Indeed, most developing economies have a gender gap in account ownership, though the size varies. In Bangladesh, Pakistan, and Turkey, for example, the gender gap is nearly 30 percentage points (figure 1.7). Other developing econ- omies with a double-digit gender gap include Morocco, Mozambique, Peru, Rwanda, and Zambia. Smaller gaps are found in such economies as Brazil and India. Some developing economies have no appreciable gender gap. Several of these are in East Asia and FIGURE 1.7 the Pacific, such as Cambodia and Myanmar—or The size of the gender gap in account in Europe and Central Asia, including Azerbai- ownership varies across economies jan, Belarus, the Kyrgyz Republic, the Russian Adults with an account (%), 2017 Federation, and Serbia (figure 1.8). Other devel- Bangladesh oping economies with no significant gender China gap include Bolivia, Namibia, South Africa, Sri Lanka, and Vietnam. And in a few developing Colombia economies—such as Argentina, Indonesia, and Côte d’Ivoire the Philippines—women are more likely than Egypt, Arab Rep. men to have an account. Ethiopia India FIGURE 1.6 Kenya Overall in developing economies, women are less likely than men to have an account Mexico Adults with an account (%), 2017 Morocco World Mozambique 7 percentage points Nigeria High-income Pakistan economies Peru Rwanda Developing 9 percentage points Turkey economies Zambia 0 20 40 60 80 100 0 20 40 60 80 100 Women Men Women Men Source: Global Findex database. Source: Global Findex database. ACCO U N T O W N E R S H I P | 23 FIGURE 1.8 There is no discernible gender gap on average in Some developing economies have no high-income economies. But some economies in appreciable gender gap in account this group do have one. In Chile and Uruguay, ownership — and a few have one that for example, the share of men with an account goes the other way Adults with an account (%), 2017 is 6–7 percentage points higher than the share of women with one, while in Saudi Arabia the Argentina gender gap is 22 percentage points. In the United Azerbaijan Arab Emirates account ownership is nearly uni- Bolivia versal among men, at 93 percent, while among women the share with an account drops to Bulgaria 76 percent. Cambodia Congo, Dem. Rep. How have gender gaps changed since Indonesia 2011? Kazakhstan Gender gaps in account ownership remain mostly Kyrgyz Republic stuck where they were in 2011 and 2014. At 7 per- Montenegro centage points, the global gender gap is virtually the same today as it was in 2011 and 2014 (figure Myanmar 1.9). The average gender gap in developing econo- Philippines mies is also unchanged. None of the three rounds Russian Federation of the Global Findex survey found evidence of a Serbia significant gender gap in high-income economies on average. South Africa Sri Lanka At the economy level too, gender gaps have Vietnam mostly remained stable. Economies that had no gender gap in 2014 generally still do not have 0 20 40 60 80 100 one; the converse is also true. But there are Women Men exceptions. In 2014 no gender gap was found in Source: Global Findex database. Burkina Faso or Ethiopia. Since then these two FIGURE 1.9 Gender gaps in account ownership have persisted over time Adults with an account (%) 100 80 High-income economies 60 World 40 Developing economies 20 0 2011 2014 2017 2011 2014 2017 Women Men Source: Global Findex database. 24 | F I N D E X 2 017 economies have seen big growth in account ownership—but more among men than among women. As a result, both now have a double-digit gender gap in account ownership. In some economies a large gender gap is slowing national progress in finan- cial inclusion. Take Algeria, where 56 percent of men have an account but only 29 percent of women do, pulling the overall rate of account ownership down to 43 percent (figure 1.10). The rates are similar in such economies as Burkina Faso, Jordan, Mozambique, Nigeria, and Peru. Any effort to increase overall account ownership in these economies needs to prioritize financial inclusion for women. Other economies have moved in the opposite FIGURE 1.10 direction. In India in 2014 men were 20 per- Large gender gaps in account ownership centage points more likely than women to have are holding back overall progress in an account. That gap has shrunk to 6 percent- financial inclusion in some economies Adults with an account (%), 2017 age points. Bolivia’s gender gap, at 8 percentage points in 2014, has disappeared as account own- Algeria ership has surpassed 50 percent among both men Burkina Faso and women. Jordan Is mobile money helping women get Lebanon equal access to accounts? Mozambique Nigeria The spread of mobile money accounts has created Peru new opportunities to better serve women, poor people, and other groups traditionally excluded Togo from the formal financial system. Indeed, there 0 20 40 60 80 100 are some early signs that mobile money accounts Women Men All adults might be helping to close the gender gap. Source: Global Findex database. Consider the eight economies where 20 percent or more of adults have a mobile money account only: Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe. These economies all have a statistically significant gap between men and women in the overall share with an account as well as in the share with both a financial institution account and a mobile money account. But just two of them—Burkina Faso and Tanzania—have a gender gap in the share owning a mobile money account only (figure 1.11). The other six have no such gen- der gap. In Côte d’Ivoire, for example, men are twice as likely as women to have a financial institution account—yet women are just as likely as men to have a mobile money account only. In Kenya men are 18 percentage points more likely to have a financial institution account; they are also 18 percentage points more likely to have both types of accounts. But women are 11 percentage points more likely than men to have a mobile money account only. ACCO U N T O W N E R S H I P | 25 FIGURE 1.11 These results are encouraging, though it is still In some economies mobile money too early to say whether and how mobile money accounts might be helping to narrow the accounts can close the gender gap. Many more gender gap in financial inclusion years of data collection and research are needed Adults with an account (%), 2017 to truly understand any connections between Women mobile money accounts and gender inequality in Burkina Faso account ownership and use of formal financial Men services. Meanwhile, the distinctions between Women types of accounts may begin to blur as more Côte d’Ivoire Men financial institutions design services tailored to the needs of poor people and as more mobile Women Gabon money operators enter into partnerships with Men financial institutions. Women Kenya Men Gaps in account ownership Women Senegal Men between richer and poorer Women On average around the world, poorer adults Tanzania Men are less likely than wealthier ones to have an account. Among adults in the richest 60 percent Women Uganda of households within economies, 74 percent Men have an account. Among those in the poorest Women 40 percent of households, 61 percent do. That Zimbabwe leaves a global gap between these two groups of Men 13 percentage points (figure 1.12). The average 0 20 40 60 80 100 gap across developing economies is similar and Financial institution account only accounts for much of the global gap. In high- Financial institution and mobile money accounts Mobile money account only income economies account ownership is nearly universal among both groups. Source: Global Findex database. Note: The figure shows only the economies where 20 percent or more of adults have a mobile money In most developing economies the gap in account account only. ownership between richer and poorer adults reaches double digits. This is often true even in those where the overall share of adults with an account is relatively high, at about 70 percent or more. In Brazil and China, for example, account ownership is about 20 percentage points higher among wealthier adults than among poorer ones (figure 1.13). But sizable gaps also exist in economies where overall account ownership is relatively low, at about 50 per- cent or less. In the Arab Republic of Egypt, Ethiopia, Indonesia, Mexico, Nigeria, and Vietnam the gap is roughly 20 percentage points. Put differently, in these economies wealthier adults are about twice as likely as poorer ones to have an account. 26 | F I N D E X 2 017 FIGURE 1.12 FIGURE 1.13 Poorer adults are less likely than Developing economies tend to have a wealthier ones to have an account large gap in account ownership between Adults with an account (%), 2017 richer and poorer adults Adults with an account (%), 2017 World 13 percentage Economies with relatively high account ownership points Brazil High-income 6 percentage points China economies India Russian Federation Developing 15 percentage economies points South Africa Turkey 0 20 40 60 80 100 Poorest 40% of households Economies with relatively low account ownership Richest 60% of households Bangladesh Source: Global Findex database. Egypt, Arab Rep. Note: Data for the poorest 40 percent and richest 60 percent of households are based on household Ethiopia income quintiles within economies. Indonesia Mexico On average, high-income economies do not Nigeria have a large gap in account ownership between richer and poorer adults. But a few do have one Philippines —including Chile, the Czech Republic, Hungary, Vietnam Israel, the Slovak Republic, and Uruguay, all of 0 20 40 60 80 100 which have a double-digit gap between adults in Poorest 40% of households the richest 60 percent of households and those in Richest 60% of households the poorest 40 percent. Source: Global Findex database. Another way to assess such gaps is to compare account ownership among the very poorest with that among the very richest. In the United States account ownership is limited to only 79 percent of adults in the poorest 20 percent of households, while it is nearly universal among those in the richest 20 percent. By contrast, five of the country’s fellow members of the Group of Seven (G-7)— Canada, France, Germany, Japan, and the United Kingdom—have no rich-poor gap in account ownership, while the sixth, Italy, has a smaller one of 13 percentage points. How have gaps between richer and poorer changed since 2011? The global gap in account ownership between richer and poorer has changed little since the initial Global Findex data were collected. In 2011 wealthier adults were 17 percentage points more likely than poorer ones to have an account, and ACCO U N T O W N E R S H I P | 27 FIGURE 1.14 The gaps in account ownership between richer and poorer have changed little since 2011 Adults with an account (%) 100 80 High-income economies 60 World 40 Developing economies 20 0 2011 2014 2017 2011 2014 2017 Poorest 40% of households Richest 60% of households Source: Global Findex database. Note: Data for the poorest 40 percent and richest 60 percent of households are based on household income quintiles within economies. this gap is much the same now (figure 1.14). In developing economies on average, the gap narrowed slightly between 2011 and 2014, from 20 percentage points to 14 percentage points, and has not changed significantly since then. In most individual economies too, the gaps have remained largely unchanged since 2011. But in some economies government policies have helped boost account ownership among poorer adults. One of these is India. In 2014 adults in the richest 60 percent of its households were 15 percentage points more likely than those in the poorest 40 percent to have an account. Since then, thanks in part to a government policy aimed at increasing financial inclusion, account ownership has risen among wealthier and poorer adults alike—narrowing the gap to 5 percentage points. In Thailand, because account ownership grew among poorer adults while stagnating among wealthier ones, the gap shrank by almost half between 2014 and 2017, from 12 percentage points to 7 percentage points. But in Turkey during the same period, because account ownership increased sharply among wealthier adults but only modestly among poorer ones, the gap grew from 8 percentage points to 20 percentage points. Are mobile money accounts helping to shrink the gaps? There are hints that mobile money accounts may be helping to reduce the gaps between richer and poorer in account ownership. Consider again the eight econ- omies where 20 percent or more of adults have a mobile money account only. All of them have a statistically significant gap between richer and poorer adults in the share owning both a financial institution account and a mobile money account. But only half of them—Burkina Faso, Côte d’Ivoire, Senegal, and Uganda —have such a gap in the share owning a mobile money account only (figure 1.15). And in two of them, Kenya and Zimbabwe, poorer adults are more likely than wealthier ones to have a mobile money account only. 28 | F I N D E X 2 017 This suggests that mobile money accounts might FIGURE 1.15 be helping to increase access to financial services Mobile money accounts might be helping for poorer adults—and thus reducing inequality to reduce the gap in financial inclusion between rich and poor in financial inclusion. But between richer and poorer in some economies a better understanding of this relationship will Adults with an account (%), 2017 require more data and research. Poorest 40% Burkina Faso Richest 60% Differences in account ownership by other individual Côte d’Ivoire Poorest 40% characteristics Richest 60% Poorest 40% Gender and income are not the only individual Gabon Richest 60% characteristics that appear to matter for the like- lihood of owning an account. Grouping people by Poorest 40% Kenya age, education level, employment status, or rural Richest 60% residence can also reveal important differences Poorest 40% in account ownership. Senegal Richest 60% What are the differences by age group? Poorest 40% Tanzania Richest 60% Account ownership is higher among older adults Poorest 40% than among young adults. Globally, 72 percent of Uganda Richest 60% adults age 25 and older have an account, while only 56 percent of those ages 15–24 do (figure Poorest 40% Zimbabwe 1.16). The pattern is on average similar in both Richest 60% high-income and developing economies. 0 20 40 60 80 100 Financial institution account only The size of the gap between the two age groups Financial institution and mobile money accounts varies among developing economies. In Brazil Mobile money account only account ownership is 30 percentage points higher among older adults than among young ones (figure Source: Global Findex database. Note: The figure shows only the economies where 1.17). In Turkey the gap between the age groups is 20 percent or more of adults have a mobile money similar to the global average. Yet in Indonesia and account only. Poorest 40% and richest 60% refer to households, grouped by income quintiles. Vietnam there is no major difference in account ownership between the age groups, and in China young adults are 8 percentage points more likely than older ones to have an account. The story for mobile money accounts is different in some economies, with young adults more likely than older adults to have one. In Chile young adults are 5 per- centage points more likely than older adults to have a mobile money account; the gap is roughly twice as large in Bangladesh and the Islamic Republic of Iran. But in Mongolia and Paraguay older adults are more likely than young adults to have a mobile money account. And in still other economies there is no significant difference in mobile money account ownership between the two age groups— including Burkina Faso, Kenya, Tanzania, Uganda, and Zambia. ACCO U N T O W N E R S H I P | 29 FIGURE 1.16 FIGURE 1.17 Older adults are more likely than young The gap in account ownership between adults to have an account older adults and young adults varies Adults with an account (%), 2017 widely among developing economies Adults with an account (%), 2017 World 16 percentage points Bangladesh Brazil High-income 14 percentage points China economies Egypt, Arab Rep. India Developing 13 percentage economies points Indonesia Mexico 0 20 40 60 80 100 Ages 15–24 Age 25+ Mozambique Nigeria Source: Global Findex database. Note: The global gap between the age groups is larger South Africa than the average gap for high-income and developing economies because in high-income economies adults Tajikistan are relatively more likely to have an account and to belong to the older age group while in developing Turkey economies adults are relatively more likely to not have an account and to belong to the younger age group. Vietnam 0 20 40 60 80 100 Ages 15–24 Age 25+ Source: Global Findex database. What are the patterns by education level? Account ownership is lower among less educated adults. Globally, 56 percent of adults with a primary education or less have an account, compared with 76 per- cent of those who have completed secondary school and 92 percent of those with higher education. Those who have less formal education are also more likely to be poor, adding to the challenge of increasing account ownership among this group. What are the links with employment status? Adults who are active in the labor force—either employed or seeking work—are more likely to have an account than those who are out of the labor force. Working adults have many needs for financial services, such as receiving wages from an employer or saving their earnings from a business. Globally, 74 percent of adults who are active in the labor force have an account, while 59 percent of those who are out of the labor force have one, leaving a gap of 15 percentage points (fig- ure 1.18). The gap is similar in developing economies and smaller in high-income ones. 30 | F I N D E X 2 017 FIGURE 1.18 FIGURE 1.19 Account ownership is higher among Across a range of economies, adults adults active in the labor force active in the labor force are more likely Adults with an account (%), 2017 to have an account Adults with an account (%), 2017 World 15 percentage points Afghanistan Algeria High-income 6 percentage economies points Argentina Bangladesh China Developing 16 percentage economies points Egypt, Arab Rep. Ethiopia 0 20 40 60 80 100 Haiti Out of labor force Employed or seeking work India Sources: Global Findex database; Gallup World Poll 2017. Lebanon Mexico Nepal Most developing economies have a gap in account ownership between these two groups. Although Nigeria account ownership is relatively low overall in Pakistan Afghanistan, adults who are active in the labor Russian Federation force are roughly six times as likely to have an Tunisia account as those who are not (figure 1.19). Large gaps between the two groups are found in some Turkey economies in the Middle East and North Africa. West Bank and Gaza Compared with adults who are out of the labor 0 20 40 60 80 100 force, account ownership among adults who are Out of labor force active in the labor force is roughly twice as high Employed or seeking work in Algeria, about three times as high in Lebanon, and almost four times as high in West Bank and Sources: Global Findex database; Gallup World Poll 2017. Gaza. Argentina and Nepal are among the few developing economies with no such gap. What about the urban-rural gap? In developing economies account ownership tends to be lower in rural areas than in urban areas. But precisely quantifying the urban-rural gap presents difficulties. For one thing, distinguishing between urban and rural areas is not straightforward—should the distinction be based solely on population, on the availability of certain services and infrastructure, or on subjective mea- sures such as the judgment of the interviewer or respondent? This is especially ACCO U N T O W N E R S H I P | 31 challenging in a cross-country context; what might be considered rural in Bangladesh or India, for example, might be considered urban in less populous countries. The Gallup World Poll—the survey to which the Global Findex ques- tionnaire is added—uses different approaches across countries to account for country-specific characteristics, which makes it difficult to create a consistent definition of the urban-rural divide at the global and regional level. Another challenge is that the estimates of account ownership for urban pop- ulations are often imprecise. The Gallup World Poll surveys about 1,000 individuals in most economies, and in those with a predominantly rural population—including many Sub-Saharan African countries—this often means that the number of urban observations is small, resulting in estimates with large margins of error. Moreover, since 2011 Gallup, Inc., has changed its methodology in a number of countries to improve the within-country geographical representativeness of sam- ples. For some countries this has increased the challenges in making a meaningful comparison of account ownership in rural areas over time. For all these reasons the 2017 Global Findex database provides, in addition to overall nationally rep- resentative data on account ownership, estimates for account ownership among rural populations but not urban populations and offers no comparisons with 2011 and 2014 data on rural account ownership at the global or regional level. China and India are two countries where a consistent methodology does allow comparisons of account ownership among rural dwellers over time. In China the share of adults with an account among this group jumped from 58 percent in 2011 to 77 percent in 2014. India started with lower account ownership among rural adults in 2011, at 33 percent. By 2017 that share had more than doubled—to 79 percent, basically the same as in China. Notes 1. Data on adults with an account at a financial institution also include respondents who reported having a debit card in their own name. The data also include an additional 3.93 percent of respondents who reported receiving wages, government transfers, a public sector pension, or payments for the sale of agricultural products into a finan- cial institution account in the past 12 months; paying utility bills or school fees from a financial institution account in the past 12 months; or receiving wages or government transfers into a card (which is assumed either to be linked to an account or to support a card-based account) in the past 12 months. The definition of formal financial institution used by the Global Findex database encompasses all types of financial institutions that offer deposit, checking, and sav- ings accounts—including banks, credit unions, microfinance institutions, and post offices—and that fall under prudential regulation by a government body. The defini- tion does not include nonbank financial institutions such as pension funds, retirement accounts, insurance companies, or equity holdings such as stocks. As used throughout the report, financial institution refers to a formal financial institution. 32 | F I N D E X 2 017 2. Data on adults with a mobile money account include an additional 0.60 percent of respondents who reported receiving wages, government transfers, a public sector pension, or payments for the sale of agricultural products through a mobile phone in the past 12 months. Unlike for an account at a financial institution, the definition of a mobile money account does not include the payment of utility bills or school fees through a mobile phone; the reason is that the phrasing of the possible answers leaves it open whether those payments were made using a mobile money account or an over- the-counter service. 3. See Demirgüç-Kunt and others (2017). ACCO U N T O W N E R S H I P | 33 2 THE UNBANKED Globally, about 1.7 billion adults remain unbanked—without an account at a financial institution or through a mobile money provider. In 2014 that number was 2 billion. Because account ownership is nearly universal in high-income economies, virtu- ally all unbanked adults live in developing economies. China and India, despite having relatively high account ownership, claim large shares of the global unbanked population because of their sheer size. Home to 225 million adults without an account, China has the world’s largest unbanked population, fol- lowed by India (190 million), Pakistan (100 million), and Indonesia (95 million) (map 2.1). Indeed, these four economies, together with three others—Nigeria, Mexico, and Bangladesh—are home to nearly half the world’s unbanked popula- tion (figure 2.1). MAP 2.1 Globally, 1.7 billion adults lack an account Adults without an account, 2017 1 million 10 million 100 million 200 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less. | 35 FIGURE 2.1 Nearly half of all unbanked adults live in just seven economies Adults without an account by economy (%), 2017 Bangladesh 3 13 China 11 India 6 Indonesia 3 Mexico 4 Nigeria 54 6 Pakistan Rest of world Source: Global Findex database. Who the unbanked are Women are overrepresented among the world’s unbanked. About 980 million do not have an account, 56 percent of all unbanked adults globally (figure 2.2). Women are also overrepresented among the unbanked in most economies. This is true even in economies that have successfully increased account ownership and have a relatively small share of adults who are unbanked. In Kenya, where only about a fifth of adults are unbanked, about two-thirds of them are women (figure 2.3). Women make up nearly 60 percent of unbanked adults in China and India—and an even higher share in Turkey. Things are not much different in economies where half or more of adults remain unbanked: in Bangladesh 65 per- cent of unbanked adults are women, and in Colombia 56 percent are. Those without an account, men as well as women, tend to be concentrated among poorer households. Globally, about a quarter of unbanked adults live in the poor- est 20 percent of households within their economy, about twice the share living in the richest 20 percent (figure 2.4). Sorting households within each economy into just two groups—the poorest 40 percent and the richest 60 percent—provides another perspective. World- wide, half of unbanked adults come from the poorest 40 percent of households within their economy, while the other half live in the richest 60 percent. This global pattern is replicated in many economies where half or more of adults are unbanked, such as Colombia, Ethiopia, Indonesia, and Nigeria. In these econo- mies unbanked adults are just as likely to come from poorer households as from wealthier ones. But in economies that have expanded account ownership to two-thirds or more of adults, poor adults are more overrepresented among the unbanked (fig- ure 2.5). In China, for example, where about a fifth of all adults are unbanked, 36 | F I N D E X 2 017 FIGURE 2.2 FIGURE 2.4 Worldwide, most unbanked adults Twice as many unbanked adults live are women in the poorest households in their Adults without an account by gender (%), 2017 economy as in the richest ones Adults without an account by within-economy income quintile (%), 2017 56 Women Q5: Richest 13 Q1: Poorest 27 Q4: 17 Q3: Q2: 44 Men 20 23 Source: Global Findex database. Source: Global Findex database. FIGURE 2.3 FIGURE 2.5 Women are overrepresented among the In economies where a small share of unbanked in most economies adults remain unbanked, most of the Adults without an account (%), 2017 unbanked are poor Adults without an account (%), 2017 Economies with a third or less of adults unbanked Economies with a third or less of adults unbanked Brazil Brazil China China India India Kenya Kenya Turkey Turkey Economies with half or more of adults unbanked Economies with half or more of adults unbanked Bangladesh Bangladesh Colombia Colombia Ethiopia Ethiopia Indonesia Indonesia Nigeria Nigeria Pakistan Pakistan 0 20 40 60 80 0 20 40 60 80 Women Men Poorest 40% Richest 60% of households of households Source: Global Findex database. Source: Global Findex database. THE UNBANKED | 37 FIGURE 2.6 65 percent of this group belongs to the poorest Three in 10 unbanked adults are between 40 percent of households. In Brazil, where a little the ages of 15 and 24 less than a third of adults are unbanked, 58 per- Adults without an account by age group (%), 2017 cent of these adults live in the poorest 40 percent of households. 30 Ages 15–24 Unbanked adults are disproportionately young. Globally, 30 percent of unbanked adults are between 15 and 24 years old (figure 2.6).1 Among all adults in developing economies, only 23 per- cent fall in that age group. The unbanked pop- 70 Age 25+ ulation is even younger in economies where the share of unbanked adults is relatively small. In Brazil, India, and Kenya about 4 in 10 unbanked adults are in the age group 15–24. Source: Global Findex database. Unbanked adults tend to have low educational attainment. Globally, 62 percent of the unbanked have a primary education or less, compared with about half of adults overall in developing economies. This share is even higher in some economies, such as Ethiopia, where 92 percent of unbanked adults have a primary education or less —as well as Tanzania (86 percent) and Pakistan (75 percent). Worldwide, only 38 percent of the unbanked have completed high school or postsecondary edu- cation (figure 2.7). A slight majority of unbanked adults are either employed or seeking work. Yet compared with other adults, those who are unbanked are more likely to be out of the labor force. Among all adults in developing economies, 37 percent are out of the labor force. Among unbanked adults, that share is 10 percentage points higher (figure 2.8). FIGURE 2.7 FIGURE 2.8 Most unbanked adults have a primary Almost half of unbanked adults are out of education or less the labor force Adults without an account by educational attainment Adults without an account by labor force participation (%), 2017 (%), 2017 62 Primary education 47 Out of or less labor force 38 High school or postsecondary 53 Employed or seeking work Source: Global Findex database. Sources: Global Findex database; Gallup World Poll 2017. 38 | F I N D E X 2 017 FIGURE 2.9 Among the unbanked, women are less likely than men to participate in the labor force Adults without an account by gender and labor force participation (%), 2017 MEN WOMEN 32 Out of 59 Out of labor force labor force 68 Employed or 41 Employed or seeking work seeking work Sources: Global Findex database; Gallup World Poll 2017. These global numbers obscure gender inequal- FIGURE 2.10 ity in labor force participation among unbanked Self-employment is the most common adults. The majority of unbanked men— form of work for unbanked adults Adults without an account by employment status (%), 68 percent—are employed or seeking work. 2017 For unbanked women the picture is flipped: 59 percent are out of the labor force altogether (figure 2.9). 18 In wage employment Among unbanked adults who are economically active, self-employment is the most common 47 Out of form of work. Indeed, more than a quarter of all labor force unbanked adults reported being self-employed, while less than a fifth reported working for 28 Self-employed wages (figure 2.10). The reverse is true for adults 6 Unemployed overall in the developing world: the share work- ing for wages, at 31 percent, is slightly larger than the share who are self-employed. Sources: Global Findex database; Gallup World Poll 2017. Why people remain unbanked Globally, 31 percent of adults are unbanked. To help shed light on the reasons for this, the 2017 Global Findex survey asked adults without an account at a finan- cial institution why they do not have one. Respondents could offer more than one reason, and most gave two. The most commonly cited barrier was lack of enough money. Nearly two-thirds of adults without an account at a financial institution said that they have too little money to use one, and roughly one in five cited this as their sole reason THE UNBANKED | 39 FIGURE 2.11 for not having one (figure 2.11). No other rea- Lack of enough money is the most son was cited as the sole barrier by more than commonly cited barrier to account 5 percent. ownership Adults without a financial institution account reporting barrier as a reason for not having one (%), 2017 Worldwide, 30 percent of adults without an account at a financial institution said that they do Not enough money not need one, making this the second most com- Do not need an account mon reason cited. Yet only 3 percent cited it as their only reason for not having an account. This Accounts too expensive suggests that among those reporting lack of need Family member already has an account as one of several reasons, some might be open to Financial institutions using financial services if the services are acces- too far away Lack of necessary sible and relevant to their lives. documentation Lack of trust Cost is another important barrier, cited by Religious reasons 26 percent of adults without an account at a 0 20 40 60 80 financial institution. But the share reporting that Cited as sole reason Cited with other reasons accounts are too expensive was twice as high in Latin America and the Caribbean. In Brazil, Source: Global Findex database. Colombia, and Peru almost 60 percent cited cost Note: Respondents could choose more than one reason. as a barrier. A similar global share, 26 percent, said that they do not have an account because a family member already has one. In some economies women were more likely than men to cite this reason. Among those without an account in Turkey, 72 per- cent of women mentioned this reason, while 51 percent of men did. In China the share for women was 35 percent, and for men 27 percent. Distance is a barrier for many: 22 percent of adults without an account said that financial institutions are too far away. In some economies the share was higher, with about 33 percent citing distance as a barrier in Brazil, Indonesia, and Kenya—and 41 percent doing so in the Philippines. Documentation requirements also hamper account ownership. Twenty per- cent of adults without an account at a financial institution reported lacking the documentation needed to open one. Higher shares cited this barrier in such economies as Zambia (35 percent), the Philippines (45 percent), and Zimbabwe (49 percent). Distrust in the financial system features as a greater barrier in some regions than in others. Globally, 16 percent of adults without an account at a financial institu- tion cited this barrier—but the share was more than twice as high in Europe and Central Asia and in Latin America and the Caribbean. While only 6 percent of adults without an account at a financial institution cited religious concerns as a reason, the share was substantially higher in some 40 | F I N D E X 2 017 economies with a predominantly Muslim population. In Pakistan 13 percent mentioned religious reasons, and in Turkey 19 percent did. Yet high costs turned out to be at least as important as religious concerns in each of these economies —cited by 21 percent in Pakistan and 19 percent in Turkey. And the share who reported religious concerns as their sole reason for not having an account was minuscule—2 percent in Pakistan and 1 percent in Turkey. Moreover, in several other economies with a mostly Muslim population—including Bangladesh, the Arab Republic of Egypt, and Indonesia—the share citing religious reasons was virtually the same as the world average.2 Notes 1. This share does not change if young adults are defined as those ages 18–24. 2. The low share of adults without an account at a financial institution citing religious con- cerns as a reason in some economies with a predominantly Muslim population could reflect the presence of Sharia-compliant financial institutions in these economies. THE UNBANKED | 41 3 PAYMENTS Most people make payments—such as for utility bills or domestic remittances. And most receive payments—such as wages, other payments for work, or gov- ernment transfers. The 2017 Global Findex survey asked people what kinds of payments they make and receive and how they carry out these transactions— whether using an account or in cash. The Global Findex survey asked questions about nine types of payments that can be grouped into five broad categories: payments from government to peo- ple (public sector wages, public sector pensions, and government transfers); payments from businesses to people (private sector wages); other payments for work (payments for the sale of agricultural products and payments from self-employment); payments from people to businesses (utility payments); and payments between people (domestic remittances, both those sent and those received). In developing economies the survey collected data on all nine types of payments. But in most high-income economies, because of time limits on interviews conducted by phone, the survey collected data only on government payments, private sector wage payments, payments from self-employment, and utility payments.1 This chapter distinguishes mainly between payments using an account and payments in cash only.2 For domestic remittances it also distinguishes one addi- tional payment channel: using an over-the-counter (OTC) service. This involves a transaction completed in cash at a financial service provider, which transfers the money digitally on behalf of the sender and recipient. Some people who reported sending or receiving a payment, when asked about the payment channel used, provided a response of “no,” “don’t know,” or “refuse” to all possible options. These respondents, typically representing only a small share of adults in any economy, are reported as those using some other method. This category could include people making or receiving payments by check. | 43 Payments from government to people Globally, 23 percent of adults reported having received at least one payment from the government in the past year—in the form of public sector wages, a public sec- tor pension, or government transfers. Government transfers include any kind of social benefits—such as subsidies, unemployment benefits, or payments for edu- cational or medical expenses. Not surprisingly, the share of adults receiving gov- ernment payments is about twice as high in high-income economies (43 percent) as in developing ones (19 percent). And among developing economies, the share in upper-middle-income economies (24 percent) is about twice the share in low- and lower-middle-income ones. FIGURE 3.1 How do people receive government Except in low-income economies, most payments? people getting government payments receive them into an account In high-income economies the overwhelming Adults receiving government payments in the past year (%), 2017 majority (80 percent) of those getting govern- ment payments receive them into an account (fig- 50 ure 3.1). Another 21 percent reported receiving 40 such payments in some other way than into an 30 account or in cash, probably in the form of either checks or vouchers.3 Among developing econo- 20 mies, the most common way of receiving govern- 10 ment payments varies by income classification. 0 In upper-middle-income economies 74 percent High Upper Lower Low of recipients reported receiving government pay- income middle middle income income income ments into an account—a majority almost as large as that in high-income economies. In lower- Into an account In cash only Using other method middle-income economies just over half (55 per- Source: Global Findex database. cent) reported receiving the payments this way, and in low-income economies 39 percent did. Among developing regions, Europe and Central Asia has a particularly high share of adults receiving government payments. Indeed, this share is about twice the average for developing economies, driven by the large numbers receiving public sector wage or pension payments. In Kazakhstan and the Russian Fed- eration, for example, more than 30 percent of adults reported having received government payments, and more than two-thirds of them said that they received the payments into an account (figure 3.2). Government payments to people play an important part in other developing economies as well. These include Brazil, Indonesia, the Philippines, and South Africa, where 20 percent or more of adults reported receiving such payments. But while about 80 percent of the recipients in Brazil and South Africa receive the payments into an account, those in Indonesia are about equally likely to receive them into an account or in cash. And in the Philippines the majority 44 | F I N D E X 2 017 FIGURE 3.2 In most developing economies governments make payments to people primarily into accounts Adults receiving government payments in the past year (%), 2017 Brazil China Colombia Egypt, Arab Rep. Ethiopia Indonesia Kazakhstan Kenya Mexico Peru Philippines Russian Federation Rwanda South Africa Turkey Uganda Vietnam Zambia 0 10 20 30 40 50 Into an account In cash only Using other method Source: Global Findex database. receive the payments in cash. The same is true in Ethiopia and Vietnam, for example. In most developing economies, however, government payments to peo- ple are made primarily into accounts. What are the patterns for different types of government payments? The focus so far has been on overall government payments to people. What does a more detailed look at the data reveal? In developing economies on average, 4 percent of adults reported having received public sector wages in the past 12 months, 7 percent a public sector pension, and 12 percent government transfers. (Because people may receive more than one type of government payment, the sum of these percentages is larger than the overall share who reported having received government payments in the past year.) The corresponding averages in high-income economies are 11 percent for public sector wages, 18 percent for public sector pensions, and 23 percent for government transfers. PAY M E N T S | 45 FIGURE 3.3 Among high-income economies, Norway and Some European and Central Asian Sweden both have a notably high share of adults economies have a particularly high share (up to 25 percent) reporting public sector wage of adults receiving public sector wages payments. Beyond high-income economies, some Adults receiving public sector wages in the past year (%), 2017 of the highest shares can be found in Europe and Central Asia (figure 3.3).4 In Russia 12 percent Belarus of adults reported having received public sector Bulgaria wage payments, and in Belarus 20 percent did so. Public sector wages are paid almost exclusively Croatia into accounts in these economies. This pattern Kazakhstan holds across economies: globally, less than 1 per- Montenegro cent of adults reported having received public Romania sector wages only in cash. Russian Federation With the high share of adults in public sector Uzbekistan employment in high-income economies and 0 10 20 30 40 many European and Central Asian economies, Into an account In cash only Using other it is no surprise that these economies also have a method particularly high share receiving a public sector Source: Global Findex database. pension. In Russia 29 percent of adults reported having received a public sector pension in the FIGURE 3.4 past 12 months. Among other major developing Government transfers are important in economies, a much smaller share did so in Bra- some developing economies—and paid zil, China, and India, only 6–7 percent. But in mostly into accounts South Africa 19 percent of adults reported hav- Adults receiving government transfers in the past year (%), 2017 ing received a public sector pension in the past 12 months—one of only six economies outside Iran, Islamic Rep. Europe and Central Asia and the high-income Malaysia group where the share exceeds 10 percent.5 Mongolia Unlike for public sector wages, about a third of those receiving a public sector pension in Russia Philippines reported receiving the payments in cash. Glob- Russian Federation ally on average, 16 percent of those receiving a South Africa public sector pension said that they received it in Thailand cash. 0 20 40 60 80 Into an account In cash only Using other Government transfer payments play an impor- method tant part in many economies around the world. Source: Global Findex database. The share of adults receiving government transfers is predictably large in high-income economies, 23 percent on average. Among devel- oping economies the share ranges from less than 5 percent in some to as high as 64 percent in the Islamic Republic of Iran, which has a national unconditional cash transfer program (figure 3.4). In a handful of developing economies 46 | F I N D E X 2 017 about 20 percent or more of adults receive such FIGURE 3.5 payments. And while most transfer recipients Poorer adults are as likely as richer ones receive the payments into an account, the Phil- to receive government payments—and to ippines is among the few economies where most do so into an account Adults receiving government payments in the past year receive the payments in cash. (%), 2017 High-income economies Developing economies What do the data show about government pay- 50 ment recipients within economies? Notably, 40 poorer and richer adults are about equally likely to receive government payments, in high-income 30 and developing economies alike (figure 3.5). 20 Moreover, they are equally likely to receive such 10 payments into an account. And for all three types of government payments—public sector wages, 0 Poorest Richest Poorest Richest public sector pensions, and government transfers 40% of 60% of 40% of 60% of households households households households —poorer and richer adults are about equally likely to be recipients. Into an account In cash only Using other method Source: Global Findex database. Payments from businesses to Note: Data for the poorest 40 percent and richest 60 percent of households are based on household people —private sector wages income quintiles within economies. Globally, 28 percent of adults reported having received at least one wage payment from a private sector employer in the past year—46 percent of adults in high-income economies and 24 percent in develop- ing ones. In high-income economies 85 percent of these wage earners reported receiving their wage payments into an account, while in developing economies only about half did so (46 percent). But these averages mask variation within these two groups of economies. Among high-income economies, while the overwhelming majority of adults earning pri- vate sector wages reported receiving the payments into an account, there are still some differences. Take the Group of Seven (G-7) economies, for example. In Germany and the United Kingdom virtually all those receiving private sec- tor wages reported being paid directly into an account (figure 3.6). In Japan, by contrast, 13 percent of private sector wage earners—or 7 percent of all adults— reported being paid in cash. And in Canada, France, Italy, and the United States about 5 percent of all adults reported receiving private sector wages in some other way—probably by check. Not surprisingly, there are even more pronounced differences among developing economies, both in the share of adults receiving private sector wages and in how they receive these payments. For example, in Brazil, China, Russia, and South Africa—all upper-middle-income economies—between 60 and 70 percent of pri- vate sector wage earners reported receiving their wage payments into an account (figure 3.7). In Kenya, a lower-middle-income economy, a similarly large share PAY M E N T S | 47 FIGURE 3.6 reported being paid into an account. By contrast, In most G-7 economies virtually all in four other lower-middle-income economies private sector wage earners are paid into —the Arab Republic of Egypt, India, Indonesia, an account and Nigeria—where the average share of adults Adults receiving private sector wages in the past year (%), 2017 receiving private sector wages is smaller, most reported being paid in cash, much as in Ethiopia, Canada a low-income economy. And in Mexico, despite France its being an upper-middle-income economy, pri- Germany vate sector wage earners were about equally likely to report receiving wage payments into Italy an account or in cash, while about 20 percent Japan reported receiving them in some other way. United Kingdom United States In developing economies women were about half 0 20 40 60 as likely as men to report receiving private sector wages (figure 3.8). In high-income economies, by Into an account In cash only Using other method contrast, women were only moderately less likely Source: Global Findex database. than men to do so. But in developing and high- income economies alike, women earning private sector wages were just as likely as their male counterparts to report receiving their wage pay- ments into an account. FIGURE 3.7 FIGURE 3.8 How private sector wage earners are Women are as likely as men to receive most likely to receive their pay varies their private sector wages into an across developing economies account Adults receiving private sector wages in the past year Adults receiving private sector wages in the past year (%), 2017 (%), 2017 High-income economies Developing economies Brazil 60 China Egypt, Arab Rep. 40 Ethiopia India 20 Indonesia Kenya 0 Mexico Men Women Men Women Nigeria Into an account In cash only Using other method Russian Federation Source: Global Findex database. South Africa 0 20 40 60 Into an account In cash only Using other method Source: Global Findex database. 48 | F I N D E X 2 017 Other payments for work FIGURE 3.9 In most developing economies, though not all, agricultural payments are Around the world, most people getting paid for received mainly in cash their labor receive the payments in the form of a Adults receiving payments for agricultural products in salary or wages from an employer, whether in the the past year (%), 2017 public or private sector. But some receive other Bangladesh payments for work, such as from the sale of agri- cultural products or from self-employment. Ethiopia Ghana How do people receive payments for Indonesia agricultural products? Kenya Nigeria About 15 percent of adults in developing econo- mies reported having received payments for the Uganda sale of agricultural products in the past 12 months. Vietnam Most said that they received these payments in Zambia cash—on average across developing regions, only 0 20 40 60 one in five recipients of agricultural payments Into an account In cash only Using other reported receiving them into an account. But in method Sub-Saharan Africa, where the share receiving Source: Global Findex database. agricultural payments is about twice the average for developing economies, a much higher share of FIGURE 3.10 recipients reported receiving such payments into Those earning money from self- an account in some economies. Indeed, in Ghana, employment in developing economies Kenya, and Zambia about 40 percent of recipients, are paid mostly in cash and in Uganda 32 percent—more than 10 percent Adults receiving payments from self- employment in the past year (%), 2017 of all adults in these countries—reported receiv- ing agricultural payments into an account, in most Argentina cases a mobile money account (figure 3.9). Brazil How do people receive payments from Indonesia self- employment? Kenya Mexico In 2017, for the first time, the Global Findex sur- Mongolia vey asked respondents who reported receiving neither wage payments nor agricultural payments Nigeria whether they had received payments from self- Philippines employment in the past 12 months. These include South Africa payments from their business, from selling goods, or from providing services, including part-time 0 10 20 30 40 work. About 8 percent of adults in both high- Into an account In cash only Using other method income and developing economies reported having Source: Global Findex database. received such payments in the past year. But while about two-thirds of recipients in high-income economies reported receiving the payments into an account, only about a quarter did so in developing economies. Still, there are some exceptions. In Kenya, Mon- golia, and South Africa, for example, about half of those receiving payments from self-employment said that they received them directly into an account (figure 3.10). PAY M E N T S | 49 Payments from people to businesses— utility payments Worldwide, 57 percent of adults reported having made regular payments for water, electricity, or trash collection in the past 12 months. In high-income econ- omies 77 percent reported making such payments. In developing economies 53 percent did so, with the share ranging from 28 percent in Sub-Saharan Africa to around 70 percent in East Asia and the Pacific and Europe and Central Asia. FIGURE 3.11 In high-income economies the vast majority of One in four people paying utility bills in those making utility payments reported doing so developing economies does so directly directly from an account; in developing econo- from an account mies only about a quarter said this (figure 3.11). Adults paying utility bills in the past year (%), 2017 Yet there is wide variation across developing Bangladesh economies. In Egypt, Ethiopia, Morocco, the Brazil Philippines, and Vietnam, for example, virtu- ally everyone making utility payments does so in China cash. But a majority of those in Kenya and Malay- Egypt, Arab Rep. sia pay directly from an account—as do about Ethiopia 40 percent in China, Russia, Turkey, and Uganda. India Indonesia Payments between people — Kazakhstan domestic remittances Kenya Malaysia Domestic remittances are an important part of the economy in many places.6 In developing econ- Mexico omies on average, 27 percent of adults reported Morocco having used domestic remittances in the past 12 Philippines months—either sending money to or receiving it Russian Federation from a relative or friend living in another area of their country.7 Domestic remittances are partic- Thailand ularly important in Sub-Saharan Africa, where Turkey 45 percent on average reported having sent or Uganda received such payments.8 Gabon, Ghana, Kenya, Vietnam Namibia, and Uganda have the highest shares of adults using domestic remittances, about 0 20 40 60 80 60–70 percent (figure 3.12). Outside Sub-Saharan From an account In cash only Using other method Africa, only Cambodia, the Dominican Republic, Mongolia, the Philippines, and Thailand have Source: Global Findex database. shares exceeding 40 percent. People send and receive domestic remittances in different ways, including by using an account and in cash only. In addition to these payment channels, this section also considers the use of an over-the-counter service, such as at a money transfer service like Western Union. OTC services for domestic remittances are also offered by financial institutions and mobile money operators. Payments are classified as OTC if the sender or recipient did not use an account but instead 50 | F I N D E X 2 017 transacted in cash at the service provider, which FIGURE 3.12 transferred the funds electronically on his or her In Sub-Saharan Africa domestic behalf. Domestic remittances are therefore con- remittances are particularly important— sidered to have been sent or received through an and are sent and received mainly by using an account OTC service if the sender or recipient reported Adults sending or receiving domestic remittances in the either using a money transfer service or using a past year (%), 2017 financial institution or mobile money operator Outside Sub-Saharan Africa but did not report having an account. Bangladesh In developing economies the most common way Brazil of sending or receiving domestic remittances is Cambodia by using an account. On average in these econo- China mies, 46 percent of adults who reported having Colombia sent or received domestic remittances in the Egypt, Arab Rep. past year said that they used this method—while India 27 percent reported using cash only, 19 percent using an OTC service, and 8 percent using some Indonesia other method.9 This pattern generally holds, Mongolia including on average for economies in Sub- Morocco Saharan Africa. But in some economies people Philippines are most likely to use cash, and in still others Thailand they are most likely to use an OTC service. Sub-Saharan Africa Kenya has the highest share using an account: Burkina Faso among adults sending or receiving domestic remittances in the past year, 89 percent reported Congo, Dem. Rep. having used an account to do so, in most cases Côte d’Ivoire a mobile money account. This should come as Ethiopia no surprise—because when the mobile money Gabon operator M-PESA launched its business in Kenya Ghana in 2007, it specifically targeted the domestic Kenya remittances market, promoting its services with Liberia the slogan “send money home.” Indeed, among Mozambique those sending or receiving at least one domestic remittance payment in Sub-Saharan Africa, most Namibia reported having done so through a mobile phone Nigeria —through either a mobile money account or an Rwanda OTC service. But in some economies, including Senegal Ethiopia, Namibia, Nigeria, and South Africa, South Africa people sending domestic remittances through an Tanzania account are most likely to do so using an account Uganda at a bank or another type of financial institution. Zambia In Cambodia and the Philippines, by contrast, the most common way to send or receive domes- 0 20 40 60 80 tic remittances is by using an OTC service. And Using an account Using an OTC service In cash only Using other method in Egypt and India the most common way is by using cash only. Source: Global Findex database. PAY M E N T S | 51 Notes 1. Gallup, Inc., imposes a time limit on phone interviews, the typical survey method used in high-income economies, which limits the number of Global Findex survey questions that can be added to the Gallup World Poll core questionnaire. In 13 high- income economies included in the 2017 Global Findex database, however, Gallup, Inc., conducts face-to-face rather than phone interviews, and in these economies data were collected for all nine types of payments. And in 4 developing economies included in the database, Gallup, Inc., conducts interviews by phone, similarly limiting the number of questions that could be added. 2. Payments are considered to have been received into an account if the respondent reported receiving them directly into an account at a financial institution; into a card, which is assumed either to be linked to an account or to support a card-based account; or through a mobile phone—and they are considered to have been sent from an account if the respondent reported sending them directly from a financial institution account or through a mobile phone. However, a payment to or from a mobile phone is considered a payment into or from an account only if the respondent lives in an economy where mobile money accounts are provided by a service that was in the GSM Association’s Mobile Money for the Unbanked (GSMA MMU) database at the time of the survey. 3. Less than 1 percent of adults in both high-income and developing economies reported having received government payments both into an account and in cash. The reason could be that they received more than one type of government payment, with one being paid into an account and another being paid in cash. Because these adults reported having received at least one payment into an account, they are included in the category of those receiving payments into an account. (A similar principle applies to other types of payments discussed in this chapter.) 4. Outside Europe and Central Asia, the only developing economies with a comparable share of adults receiving public sector wages are the Dominican Republic (11 percent), Libya (13 percent), Mauritius (12 percent), and Namibia (16 percent). 5. The other five economies are Costa Rica (11 percent), the Islamic Republic of Iran (11 percent), Jordan (12 percent), Mauritius (22 percent), and Namibia (11 percent). 6. The Global Findex survey does not cover international remittances. While interna- tional remittances are economically important for some economies, the share of adults in developing economies who reported sending or receiving them is on average 4 per- cent (Gallup World Poll 2017). 7. In developing economies 17 percent of adults reported having sent domestic remit- tances in the past 12 months, and 20 percent having received them; 9 percent of adults reported having both sent and received domestic remittances. 8. In Sub-Saharan Africa 28 percent of adults reported having sent domestic remit- tances in the past 12 months, and 33 percent having received them; 17 percent of adults reported having both sent and received domestic remittances. 9. Respondents who reported sending or receiving domestic remittances in multiple ways are assigned to categories as follows: using an account if they reported having sent or received domestic remittances through an account; using an OTC service if they reported having sent or received domestic remittances through an OTC service but did not report having done so through an account; in cash only if they reported having sent or received domestic remittances only in cash; and using other method if they provided a “no,” “don’t know,” or “refuse” response to all categories. 52 | F I N D E X 2 017 4 USE OF ACCOUNTS Owning an account is an important first step toward financial inclusion. But to fully benefit from having an account, people need to be able to use it in safe and convenient ways. This chapter explores different ways in which people access and use their accounts. Use of accounts for digital payments According to the 2017 Global Findex survey, 52 percent of adults—or 76 percent of account owners—around the world reported making or receiving at least one digital payment in the past year (figure 4.1). In high-income economies 91 per- cent of adults (97 percent of account owners) reported doing so; in developing economies 44 percent of adults (70 percent of account owners) did. These per- centages include all respondents who reported using mobile money, a debit or credit card, or a mobile phone to make a payment from an account, or reported using the internet to pay bills or to buy something online, in the past 12 months. They also include those who reported paying bills, sending or receiving remit- tances, receiving payments for agricultural products, or receiving wages, gov- ernment transfers, or a public sector pension directly from or into a financial institution account or through a mobile money account in the past 12 months.1 What are the overall changes since 2014? The use of digital payments is on the rise. Between 2014 and 2017 the share of adults around the world making or receiving digital payments rose by 11 percent- age points, from 41 percent to 52 percent (see figure 4.1).2 Indeed, the growth in the share using digital payments outpaced the growth in the share owning an account, which hit 7 percentage points. In developing economies the share using digital payments increased by 12 percentage points—from 32 percent to 44 percent—among all adults, while it grew from 57 percent to 70 percent among account owners. In high-income economies the use of digital payments was already nearly universal among account owners in 2014, and it remained so. While the use of digital payments is generally high in developing economies— reported by more than two-thirds of account owners on average—there is also | 55 FIGURE 4.1 More people are using their account to much variation among these economies (figure make or receive digital payments 4.2). In Kenya, thanks to the widespread adop- Adults with an account (%) tion of mobile money accounts, the use of digi- High-income Developing tal payments is nearly universal among account World economies economies owners; indeed, the share reporting their use, 100 at 97 percent, is as high as that in high-income 80 economies. In the Russian Federation and 60 República Bolivariana de Venezuela the share of account owners using digital payments is simi- 40 larly high, and in China it is 85 percent. By con- 20 trast, Ethiopia and India stand out for low use of digital payments: only about a third of account 0 2014 2017 2014 2017 2014 2017 owners in these two countries reported making Made or received digital payments in the or receiving at least one digital payment in the past year past 12 months.3 Did not make or receive digital payments in the past year What do the data show about the use of digital Source: Global Findex database. payments in major developing economies that already had a high rate of account ownership in FIGURE 4.2 2014? These include Brazil, China, Kenya, Malay- The share of account owners using sia, Russia, South Africa, and Thailand, where digital payments varies widely across the share of adults with an account had reached developing economies about 70 percent or more. While account owner- Adults with an account (%), 2017 ship remained largely unchanged in these coun- Bangladesh tries, the share of adults using their account for Brazil digital payments generally grew substantially. In China, for example, the share of adults using China digital payments increased by about half, from Ethiopia 44 percent in 2014 to 68 percent in 2017 (figure India 4.3). In Thailand the share almost doubled, to 62 percent. Economies such as Brazil, Malay- Indonesia sia, and Russia also saw increases, though much Kenya more modest ones from a larger base. In Kenya Malaysia and South Africa the share of account owners Nigeria using digital payments had already surpassed 85 percent in 2014. Pakistan Russian Federation Does the use of accounts for digital payments Venezuela, RB vary by gender and by income? As explored in the chapter on account ownership, women and Vietnam poorer adults are less likely to have an account. 0 20 40 60 80 100 But does the use of accounts vary among those Made or received digital payments in the past year who do have one? Did not make or receive digital payments in the past year Source: Global Findex database. Among account owners in high-income econ- omies, the use of digital payments is nearly 56 | F I N D E X 2 017 universal for both men and women. Among FIGURE 4.3 those in developing economies, however, In developing economies where most men are on average 5 percentage points more adults already had an account, a growing likely than women to make or receive digital share are using theirs for digital payments payments—72 percent of male account owners Adults with an account (%) use digital payments, compared with 67 percent of female account owners. This gender gap of 2014 5 percentage points remains unchanged since Brazil 2017 2014 despite an overall increase in the use of dig- ital payments. 2014 China 2017 The gender gap in the use of digital payments varies substantially among developing econo- 2014 Kenya mies. In some it reaches double digits. These 2017 include economies that also have a double-digit gender gap in account ownership, such as Ban- 2014 Malaysia gladesh, the Arab Republic of Egypt, Ethiopia, 2017 Morocco, and Pakistan. By contrast, in Turkey, despite a gender gap in account ownership of Russian 2014 Federation 2017 almost 30 percentage points, the use of digi- tal payments is nearly universal among both male and female account owners. Conversely, a South 2014 Africa 2017 double-digit gender gap in the use of digital pay- ments also exists in some economies that have 2014 a smaller gender gap in account ownership. In Thailand 2017 India, for example, 42 percent of male account owners use digital payments, while just 29 per- 0 20 40 60 80 100 cent of female account owners do. And in the Made or received digital payments in the past year Did not make or receive digital payments in the past year Philippines, one of the few developing economies where women are more likely than men to have Source: Global Findex database. an account, the share of account owners using digital payments is 9 percentage points higher among men than among women. Not surprisingly, there are also differences between richer and poorer account owners in the share using digital payments. Globally, 80 percent of account owners living in the richest 60 percent of households within economies make or receive digital payments, while 70 percent of those in the poorest 40 per- cent of households do so. In high-income economies richer and poorer account owners are equally likely to use digital payments. In developing economies, by contrast, 74 percent of richer adults use digital payments, while 61 percent of poorer adults do. The gap between richer and poorer in the use of accounts for digital payments has narrowed by a third since 2014, when it was 22 per- centage points on average in developing economies and 15 percentage points globally. U S E O F ACCO U N T S | 57 How many people use debit and credit cards to make purchases? Payment cards such as debit or credit cards provide account owners a convenient way to make payments from their account without having to withdraw cash. In high-income economies 80 percent of adults reported using a debit or credit card to make at least one payment in the past 12 months, while in developing econo- mies only 22 percent did so (figure 4.4).4 FIGURE 4.4 People can use a debit card both to make direct In high-income economies four-fifths of payments from their account and to withdraw adults use a debit or credit card money from it through an automated teller Adults with an account (%), 2017 machine (ATM) rather than a bank teller. In 100 high-income economies on average, 89 per- 80 cent of account owners (83 percent of adults) reported owning a debit card in 2017, and three- 60 quarters of account owners said that they had 40 used their card to make a direct purchase in the 20 past 12 months (figure 4.5). In developing econo- mies only 63 percent of account owners (40 per- 0 cent of adults) said that they had a debit card, World High-income Developing economies economies and just half of them reported using it to make Used a debit or credit card in the past year a direct purchase in the past year. While debit Did not use a debit or credit card in the past year card ownership and use have grown in devel- oping economies since 2014, they have done so Source: Global Findex database. only modestly: The share of account owners with a debit card has increased by only 5 percentage points, from 58 percent to 63 percent. And the share using a debit card for a direct purchase has similarly increased by only 5 percentage points.5 FIGURE 4.5 Debit card ownership and use have grown in developing economies, though slowly Adults with an account (%) High-income Developing High-income Developing economies economies economies economies 100 80 Used a card for a direct purchase in the past year 60 Had a card but did not use it for a direct purchase in 40 the past year Did not have a card 20 0 2014 2017 2014 2017 2014 2017 2014 2017 Debit card Credit card Source: Global Findex database. 58 | F I N D E X 2 017 Debit card ownership and use vary considerably FIGURE 4.6 across developing economies (figure 4.6). Brazil, Debit card ownership and use vary China, Malaysia, Russia, and Turkey follow the widely among developing economies Adults with an account (%), 2017 general pattern among developing economies of relatively high debit card ownership and use, Brazil with about half of those with a debit card using China it to make a direct purchase in the past year. In India and Kenya, by contrast, less than half of Egypt, Arab Rep. account owners have a debit card, and among India those who do, only about a third used it to make a direct purchase. And in such economies as Indonesia Egypt, Indonesia, Nigeria, and the Philippines Kenya the number of account owners with a debit card Malaysia is relatively high, but only a third or fewer of those who have one used it for a direct purchase. Nigeria República Bolivariana de Venezuela stands out Philippines for very high debit card ownership and use— nearly universal among adults. A key reason is Russian Federation that the country’s economic challenges have led Turkey to a severe shortage of bank notes, so that out of Venezuela, RB necessity many people making a purchase use a debit card whenever possible.6 0 20 40 60 80 100 Used a debit card for a direct purchase in the past year In many economies people use a credit card Had a debit card but did not use it for a direct purchase in the past year rather than a debit card to pay bills and make Did not have a debit card everyday purchases.7 In high-income economies Source: Global Findex database. 55 percent of adults reported owning a credit card. In developing economies, despite recent growth in some, credit card ownership remains low and unchanged from 2014: on average only 10 percent of adults reported having one. Those who own a credit card are very likely to use it. Across both high-income and developing economies the share of credit card holders who reported having used their card in the past 12 months exceeds 80 percent. Where are payments using a mobile phone or the internet catching on? Mobile phones and the internet increasingly offer an alternative way to make direct payments from an account—either a mobile money account or, through an app or a website, a financial institution account. In high-income economies 51 percent of adults (55 percent of account owners) reported making at least one financial transaction in the past year using a mobile phone or the inter- net.8 But this average masks a large variation: in Norway the share was as high as 85 percent while it was just 33 percent in Japan and 22 percent in Italy (figure 4.7). U S E O F ACCO U N T S | 59 FIGURE 4.7 In developing economies 19 percent of adults Half of adults in high-income economies (30 percent of account owners) reported making use a mobile phone or the internet to at least one financial transaction in the past year make transactions from their account using a mobile money account, a mobile phone, Adults with an account (%), 2017 or the internet. But this figure similarly masks High-income economies large differences. In economies where a large share of adults have a mobile money account, Canada such as Kenya and Tanzania, the use of a mobile France phone to make transactions through an account is close to universal among account owners—in Germany Kenya 88 percent of account owners (72 percent Italy of adults) reported using a mobile phone or the internet to make a transaction through their Japan account in the past year. By contrast, in India Norway less than 10 percent of account owners reported doing so. In China 49 percent of account owners United Kingdom (40 percent of adults) reported using a mobile United States phone to make a financial transaction. Developing economies When it comes to using a mobile phone for Bangladesh financial services, China and Kenya represent two different models. In China mobile financial Brazil services are provided primarily through third- China party payment service providers such as Alipay India and WeChat using smartphone apps linked to an account at a bank or another type of finan- Indonesia cial institution (figure 4.8). By contrast, in Kenya Kenya mobile financial services are offered by mobile network operators, and mobile money accounts Mongolia do not need to be linked to an account at a finan- Nigeria cial institution. Pakistan In Kenya most account owners have both a finan- Russian Federation cial institution account and a mobile money account. This is reflected in how people make Tanzania mobile payments. Forty percent of adults use 0 20 40 60 80 100 only a mobile money account to make such pay- Used account in the past year ments. Another 29 percent rely on two methods— To make or receive digital payments using a using a mobile money account and using a mobile mobile phone or the internet To make or receive other types of digital phone or the internet to access their financial payments only institution account. And 2 percent make mobile Neither to make nor to receive digital payments payments only by using a mobile phone or the internet to access their financial institution Source: Global Findex database. account. In China 40 percent of adults make mobile payments from their financial institution account. 60 | F I N D E X 2 017 FIGURE 4.8 FIGURE 4.9 Account owners in China tend to make More than half of adults in high-income mobile payments through apps, those in economies use a mobile phone or the Kenya through mobile money accounts internet to check the balance in their Adults with an account (%), 2017 financial institution account Adults with a financial institution account (%), 2017 100 80 Australia 60 Canada 40 China 20 France 0 Germany China Kenya Italy Did not make mobile payments in the past year Japan Made mobile payments in the past year From a financial institution account only Kenya From both a mobile money account and a financial institution account Norway Using a mobile money account only Spain Source: Global Findex database. Note: Data on the use of mobile money accounts United Kingdom include adults making or receiving payments through such accounts. United States 0 20 40 60 80 100 Used a mobile phone or the internet to check account balance in the past year Did not use a mobile phone or the internet to check account balance in the past year Source: Global Findex database. In 2017, for the first time, the Global Findex survey also asked respondents with a financial institution account whether they used a mobile phone or the internet to check their account balance. In high-income economies 56 percent of adults reported having done so, including almost 90 percent of adults in Norway (fig- ure 4.9). In developing economies on average, 18 percent of adults reported hav- ing used a mobile phone or the internet to check their balance. But in a handful of economies about twice that share reported having done so. For example, in China 39 percent of adults did so, and in Kenya 32 percent did. And in Mon- golia and Russia about 45 percent did so, the largest share among developing economies. Most people who use a mobile phone or the internet for checking their account balance also use this technology for making transactions from their financial institution account. But this is not true everywhere: Italy and Spain are two notable exceptions. In these two countries 61 percent of adults reported using a mobile phone or the internet to check the balance in their financial institution account, but less than half of this group also reported doing so to make a transac- tion from their financial institution account. U S E O F ACCO U N T S | 61 How many people use the internet to shop and pay bills? Globally, 22 percent of adults reported using the internet to pay bills in the past 12 months, and 24 percent using it to buy something online. Overall, 29 percent of adults around the world reported using the internet to either pay bills or buy something online— 68 percent of adults in high-income economies and 21 per- cent in developing economies. In high-income economies the share of adults who reported having used the internet to pay bills averages 52 percent—but it exceeds 80 percent in Denmark, Finland, the Netherlands, Norway, and Sweden (figure 4.10). In developing econ- omies few adults use the internet to pay bills. The highest shares doing so—about 40 percent—are in Belarus, China, Croatia, and the Islamic Republic of Iran (fig- ure 4.11). In Russia and Turkey about a third of adults pay bills online. But on average in developing economies only 16 percent of adults do so, and the share is less than 5 percent in low- and lower-middle-income economies. Similarly, high-income economies have a larger share of adults who reported having used the internet to buy something online in the past year—59 percent on average, including up to three-quarters of adults in Denmark, the Netherlands, Norway, and the United Kingdom. In China 45 percent of adults reported having bought something online—by far the largest share among developing economies. Malaysia followed, with 34 percent. In Belarus, Croatia, the Islamic Republic of Iran, and Russia just under 30 percent of adults reported having made online purchases, and in Turkey and Vietnam about 20 percent did. On average, how- ever, just 7 percent of adults in developing economies excluding China reported having bought something online. Buying something online does not necessarily mean paying for it online. In many developing economies people commonly pay in cash on delivery for internet orders. To measure how common that practice is, the 2017 Global Findex sur- vey asked people in developing economies how they pay for internet purchases. On average in all developing economies except China, 53 percent of adults who reported making an internet purchase in the past 12 months said that they paid for it in cash on delivery. Even in economies where a relatively large share of adults reported having made an online purchase, such as Malaysia and Turkey, only about half of them reported paying for it online. In Lebanon and Vietnam, for example, more than 80 percent of adults who bought something online paid in cash on delivery. In China, by contrast, 85 percent of adults who bought something online also paid for it online (figure 4.12). Many of them probably used popular third-party online and mobile payment platforms such as Alipay and WeChat, which were developed specifically to facilitate online payments. Indeed, Alipay’s slogan is “experience fast, easy and safe online payments.” 62 | F I N D E X 2 017 FIGURE 4.10 FIGURE 4.11 On average in high-income economies, In developing economies a far smaller two-thirds of adults use the internet to share of adults use the internet for pay bills or shop online paying bills or shopping online Adults using the internet for specified purpose in the Adults using the internet for specified purpose in the past year (%), 2017 past year (%), 2017 Australia Belarus Canada Brazil Denmark China Finland Croatia France Indonesia Germany Iran, Islamic Rep. Italy Kenya Japan Lebanon Korea, Rep. Malaysia Netherlands Russian Federation New Zealand South Africa Norway Turkey Sweden United Kingdom Venezuela, RB United States Vietnam 0 20 40 60 80 100 0 20 40 60 80 100 To pay bills or buy something online To pay bills or buy something online To pay bills To pay bills To buy something online To buy something online Source: Global Findex database. Source: Global Findex database. U S E O F ACCO U N T S | 63 FIGURE 4.12 FIGURE 4.13 Online shoppers tend to pay online in Most people who use their account to China — but in cash on delivery in most other save also use it to make or receive digital developing economies payments Adults using the internet to buy something online in the Adults with an account (%), 2017 past year (%), 2017 High-income economies Belarus Developing economies Brazil Bangladesh China Brazil Croatia Indonesia China Kenya Ethiopia Lebanon India Malaysia Indonesia Russian Federation Nigeria South Africa Pakistan Turkey Russian Federation Venezuela, RB Vietnam Vietnam 0 20 40 60 80 100 0 10 20 30 40 50 Used account in the past year Paid for internet order online To make or receive digital payments but not to save Paid for internet order in cash on delivery To save and to make or receive digital payments To save but not to make or receive digital payments Neither to save nor to make or receive digital payments Source: Global Findex database. Source: Global Findex database. Use of accounts for saving Making or receiving digital payments is one important use of an account. Saving is another. But few people reported using their account for saving but not also for making or receiving digital payments in the past year. In developing economies only 3 percent of adults did so (figure 4.13). Ethiopia is an exception to this pat- tern, with 15 percent of adults reporting using their account for saving but not for digital payments. Indeed, it is the only economy where this share exceeded 10 percent. In India the share was 7 percent. Accounts that remain inactive Globally, 13 percent of adults, or 20 percent of account owners, reported hav- ing what can be considered an inactive account, with no deposit or withdrawal —in digital form or otherwise—in the past 12 months (figure 4.14).9 The share of 64 | F I N D E X 2 017 FIGURE 4.14 FIGURE 4.15 Globally, one in five account owners has In India almost half of account owners an account that was inactive in the past have an account that remained inactive in year the past year Adults with an account (%), 2017 Adults with an account (%), 2017 100 Afghanistan 80 Bangladesh 60 40 India 20 Nepal 0 World High-income Developing Pakistan economies economies Made at least one deposit or withdrawal in the past year Sri Lanka Made no deposit and no withdrawal in the past year 0 20 40 60 80 Source: Global Findex database. Made at least one deposit or withdrawal in the past year Made no deposit and no withdrawal in the past year Source: Global Findex database. account owners with an inactive account varies across economies, but it is espe- cially high in many South Asian economies (figure 4.15). In India the share is 48 percent—the highest in the world and about twice the average of 25 percent for developing economies. Part of the explanation might be India’s Jan Dhan Yojana scheme, developed by the government to increase account ownership. Launched in August 2014, the program had brought an additional 310 million Indians into the formal banking system by March 2018, many of whom might not yet have had an opportunity to use their new account.10 In Afghanistan, Nepal, and Sri Lanka about a third of account owners have an inactive account, while in Bangladesh 21 percent do. And Pakistan has a rate of just 13 percent, though it also has a low rate of account ownership compared with other economies in the region. In high-income economies only 4 percent of account owners have an inactive account. In developing economies female account owners are on average 5 percent- age points more likely than male account owners to have an inactive account. In India, however, this gender gap is about twice as large: while 54 percent of women with an account reported having made no deposit or withdrawal in the past year, only 43 percent of men with an account did so. In developing economies 76 percent of adults with an inactive account have a mobile phone, including 66 percent in India. This represents an opportunity for expanding the use of accounts through digital technology—a topic explored in detail in the chapter on opportunities for expanding financial inclusion through digital technology. U S E O F ACCO U N T S | 65 Notes 1. Globally in 2017, 0.28 percent of adults reported receiving payments from self- employment into an account in the past year but not making or receiving any other digital payments. Data on payments from self-employment were not collected in 2014. 2. No comparable data on digital payments were collected in 2011. 3. Myanmar and Nepal are the only other two economies with a similarly low share of adults who reported having made or received digital payments. 4. This does not include using a card for a cash withdrawal at an ATM. No data are col- lected on prepaid cards not linked to an account. 5. In 2011, 69 percent of account owners in high-income economies reported having a debit card, while 57 percent of account owners in developing economies did so. No data are available on the use of cards for direct purchases for 2011. 6. “Cash Crunch: How Venezuela Inadvertently Became a Cashless Economy,” Guardian, November 30, 2017. 7. While a credit card does not have to be linked to an account, less than 0.5 percent of adults around the world reported owning a credit card but not having an account at a financial institution. 8. Mobile money accounts are offered in only three high-income economies—Chile, Singapore, and the United Arab Emirates. 9. It is not possible to ascertain whether accounts with no deposit and no withdrawal in the past 12 months are “dormant,” as they may be used for long-term saving. 10. “Pradhan Mantri Jan Dhan Yojana Progress-Report,” Department of Financial Ser- vices, Indian Ministry of Finance, March 21, 2018, https://pmjdy.gov.in/account. 66 | F I N D E X 2 017 5 SAVING, CREDIT, AND FINANCIAL RESILIENCE People save for future expenses—a large purchase, investments in education or a business, their needs in old age or in possible emergencies. Or, facing more immediate expenses, they may choose to borrow instead. Global Findex data show how and why people save and borrow and shed light on their financial resilience to unexpected expenses. How and why people save In 2017, 48 percent of adults around the world reported having saved or set aside money in the past 12 months. In high-income economies 71 percent of adults reported having saved, while in developing economies 43 percent did so. MAP 5.1 Formal saving around the world Adults saving at a financial institution in the past year (%), 2017 0–9 10–19 20–29 30–49 50–100 No data Source: Global Findex database. | 69 FIGURE 5.1 How do people save? Globally, more than half of adults who save choose to do so at a financial People go about saving money in different ways. institution Globally in 2017, 27 percent of adults—or just over Adults saving any money in the past year (%), 2017 half of savers—reported having saved formally in 100 the past 12 months, at a bank or another type of 80 financial institution. Among all adults, the share who reported saving formally averaged 55 per- 60 cent in high-income economies and 21 percent 40 in developing economies (map 5.1; figure 5.1). 20 Among savers, the share saving formally was more than three-quarters in high-income econo- 0 High-income Developing mies but just under half in developing economies. economies economies In developing economies a common alternative Saved Saved Saved using other formally semiformally methods only to saving at a financial institution is to save semi- formally, by using a savings club or a person out- Source: Global Findex database. Note: People may save in multiple ways, but categories side the family. In 2017, 11 percent of adults—or are constructed to be mutually exclusive. Saved 25 percent of savers—in developing economies formally includes all adults who saved any money reported having saved in this way, including formally. Saved semiformally includes all adults who saved any money semiformally but not formally. Data 7 percent of adults who saved semiformally but on semiformal saving are not collected in most high- not formally. One common type of savings club is income economies. a rotating savings and credit association. These associations generally operate by pooling weekly deposits and disbursing the entire amount to a different member each week.1 The options for saving go beyond doing so at a financial institution or by using a savings club or a person outside the family. In both high-income and developing economies 16 percent of adults reported saving in some other way only. This may include saving in cash at home (“under the mattress”) or saving in the form of livestock, jewelry, or real estate. It may also include using investment products offered by equity and other traded markets or purchasing government securities. How does account ownership matter for savings behavior? Having an account is a prerequisite for saving formally.2 And account ownership has increased steadily since the first round of Global Findex data were collected. Globally, the share of adults with an account rose from 51 percent to 69 percent between 2011 and 2017. But has formal saving also increased over time? The share of adults worldwide who reported having saved formally in the past year rose from 23 percent to 27 percent between 2011 and 2014, but then remained at that level in 2017 (figure 5.2). With account ownership being a prerequisite for formal saving, it is no surprise that high-income economies, which have much higher account ownership on average than developing economies, also have a higher average share of adults reporting that they saved formally in the past year. As discussed in the chapter on 70 | F I N D E X 2 017 account ownership, those who have an account FIGURE 5.2 also tend to be wealthier and to be participating More account ownership does not actively in the labor force—and thus might have a necessarily translate into more formal greater capacity to save. saving Adults with an account (%) 80 But having an account does not necessarily imply formal saving. Even among account own- 60 ers there is much variation in the use of accounts for saving. Globally in 2017, 38 percent of account 40 owners reported having saved at a financial insti- tution in the past 12 months. But while the share 20 who reported having done so was 58 percent in 0 high-income economies, it was only 31 percent in 2011 2014 2017 developing economies (figure 5.3). Saved formally Did not save formally in the past year in the past year Use of accounts for saving is low even in econo- Source: Global Findex database. mies where the share of adults with an account has reached about 70 percent or more. In China and Malaysia 43 percent of account owners reported having saved formally in the past year, while the share was about 30 percent in Kenya, South Africa, and Turkey—and about 20 percent in Brazil, India, and the Russian Federation. In Kenya and South Africa some 20 percent of account owners reported having saved semiformally, by using a savings club or a person outside the family. And in both high-income and developing economies almost 20 percent reported having saved exclusively in some other way. FIGURE 5.3 Account owners do not necessarily use their account to save—or even save at all Adults with an account by savings behavior in the past year (%), 2017 High-income economies Developing economies Brazil China Saved formally India Saved semiformally Saved using other Kenya methods only Did not save Malaysia Russian Federation South Africa Turkey 0 20 40 60 80 100 Source: Global Findex database. Note: Account owners may save in multiple ways, but categories are constructed to be mutually exclusive. Saved formally includes all account owners who saved any money formally. Saved semiformally includes all account owners who saved any money semiformally but not formally. Data on semiformal saving are not collected in most high-income economies. In all individual economies shown, about 70 percent or more of adults have an account. S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I E N C E | 71 FIGURE 5.4 Indeed, having an account does not necessarily Almost a third of unbanked adults save imply that people save at all. Globally, 42 percent Adults by account ownership and savings behavior in the past year (%), 2017 of account owners reported not having saved any money in the past year. In high-income econo- 100 mies 26 percent of account owners reported not 80 having saved any money. And in Brazil, India, Russia, and Turkey—all economies where about 60 70 percent or more of adults have an account— 40 about 60 percent reported not saving at all. 20 What does savings behavior look like among 0 Adults with Adults without those without an account? Compared with those an account an account who have an account, unbanked adults might Saved formally Saved semiformally have lower income and thus lower capacity to Saved using other Did not save methods only save—and they might also have less access to convenient and affordable formal financial ser- Source: Global Findex database. Note: People may save in multiple ways, but categories vices. Yet 28 percent of unbanked adults around are constructed to be mutually exclusive. Saved the world reported having saved in the past year formally includes all adults who saved any money formally. Saved semiformally includes all adults who (figure 5.4). Some 17 percent of unbanked adults saved any money semiformally but not formally. reported having saved only in some way other than formally or semiformally, and 9 percent reported having saved semiformally—similar to the shares who reported having saved using these methods among adults with an account.3 How does savings behavior differ across economies and individual characteristics? Savings behavior not only differs between high-income and developing econo- mies; it also varies among developing economies. Consider those with some of the largest numbers of unbanked adults. Among these economies, the share of adults who reported having saved formally in the past year ranges from 35 per- cent in China to around 5 percent in the Democratic Republic of Congo, Côte d’Ivoire, the Arab Republic of Egypt, Pakistan, and Tanzania (figure 5.5). Indeed, China is one of five developing economies—together with Croatia, Malaysia, Namibia, and Thailand—where the share saving formally is in the 30–40 percent range (and rates of account ownership are above average). Saving semiformally is a common method of saving especially in Sub-Saharan Africa. On average across the region, 26 percent of adults reported having saved in the past year using a savings club or a person outside the family, including 19 percent of adults who reported having saved money semiformally but not formally—and in Ethiopia, Kenya, Rwanda, and South Africa, for example, more than 20 percent reported having done so. But saving semiformally is also com- mon in some economies outside Sub-Saharan Africa—including Indonesia and Pakistan, where about 20 percent of adults reported saving using this method. 72 | F I N D E X 2 017 FIGURE 5.5 Savings behavior varies widely across developing economies Adults saving any money in the past year (%), 2017 Bangladesh Brazil China Colombia Congo, Dem. Rep. Côte d’Ivoire Egypt, Arab Rep. Ethiopia India Indonesia Kenya Mexico Morocco Mozambique Myanmar Nigeria Pakistan Peru Philippines Rwanda South Africa Tanzania Turkey Vietnam Zambia 0 20 40 60 80 Saved Saved Saved using other formally semiformally methods only Source: Global Findex database. Note: People may save in multiple ways, but categories are constructed to be mutually exclusive. Saved formally includes all adults who saved any money formally. Saved semiformally includes all adults who saved any money semiformally but not formally. And in some economies the most common method of saving is in some other way than at a financial institution or by using a savings club or a person outside the family. These include Colombia, the Democratic Republic of Congo, Peru, and the Philippines, where about two-thirds of savers reported saving in some other way. S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I E N C E | 73 MAP 5.2 In Sub-Saharan Africa saving semiformally is much more common than saving formally Adults saving in the past year (%), 2017 Saved formally Saved semiformally 0–9 0–9 10–19 10–19 20–29 20–29 30–49 30–49 No data No data Source: Global Findex database. Note: Data are displayed only for economies in Sub-Saharan Africa. FIGURE 5.6 In 8 of 10 economies in Sub-Saharan Africa more In developing economies men are more adults reported having saved semiformally in the likely than women to save formally past year than reported having saved formally Adults saving any money in the past year (%), 2017 (map 5.2). Yet many people save both formally 60 and semiformally. On average in the region, 50 9 percent of adults reported saving only for- 40 mally, and 19 percent saving only semiformally. 30 But 6 percent reported saving both formally and semiformally. This suggests that semiformal 20 savings arrangements offer products or provide 10 benefits—such as convenience or community 0 building—that are not available through saving at Men Women a financial institution alone. Saved formally Saved semiformally Saved using other methods only Source: Global Findex database. Savings behavior also varies by individual char- Note: People may save in multiple ways, but categories acteristics. In high-income economies, just as are constructed to be mutually exclusive. Saved for owning an account, men and women were formally includes all adults who saved any money formally. Saved semiformally includes all adults who equally likely to report having saved at a finan- saved any money semiformally but not formally. cial institution. But in developing economies men were 6 percentage points more likely than women to report having saved formally (figure 5.6). This gender gap in formal saving is about the same as the gender gap in account ownership in developing economies. Overall, these data mean that men and women are about equally likely to use their account for saving. 74 | F I N D E X 2 017 FIGURE 5.7 Adults living in the poorest 40 percent of households in their economy are less likely to save formally Adults saving any money in the past year (%), 2017 High-income economies Developing economies 100 80 60 40 20 0 Poorest Richest Poorest Richest 40% of 60% of 40% of 60% of households households households households Saved formally Saved semiformally Saved using other methods only Source: Global Findex database. Note: People may save in multiple ways, but categories are constructed to be mutually exclusive. Saved formally includes all adults who saved any money formally. Saved semiformally includes all adults who saved any money semiformally but not formally. Data on semiformal saving are not collected in most high-income economies. Not surprisingly, adults living in the poorest 40 percent of households within economies were less likely to report having saved formally than those living in the richest 60 percent (figure 5.7). This holds in both high-income and develop- ing economies. But while the gap in formal saving between richer and poorer adults is 15 percentage points in developing economies, it is 23 percentage points in high-income economies. What are the main reasons for saving? For what future expenses do people save? The 2017 Global Findex survey asked about two specific reasons for saving—for old age and to start, operate, or expand a business.4 Globally, 21 percent of adults reported having saved in the past 12 months for old age—44 percent in high-income economies and 16 per- cent in developing economies. Saving to start, operate, or expand a business was reported by about 14 percent in both high-income and developing economies. Saving for a business was especially common in many Sub-Saharan African economies. In Ethiopia, Kenya, Liberia, Nigeria, Uganda, and Zambia, for exam- ple, 29 percent or more of adults reported having done so—twice the global aver- age. But while the majority of those saving for a business in these six economies have an account, more than half on average reported having saved only in non- formal ways, such as through a savings club or in the form of livestock, jewelry, or real estate. S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I EN C E | 75 FIGURE 5.8 How and why people borrow The most common source of credit in high-income economies is formal Globally in 2017, 47 percent of adults reported borrowing—in developing economies, family or friends having borrowed money in the past 12 months, Adults borrowing any money in the past year (%), 2017 including through the use of a credit card. The 80 share of adults with new credit, formal or non- formal, averaged 64 percent across high-income 60 economies and 44 percent across developing economies. 40 What are the sources of credit? 20 0 In high-income economies formal borrowing High-income Developing was by far the most common source of credit: economies economies almost 90 percent of borrowers reported borrow- Borrowed formally Borrowed semiformally ing from a financial institution or through the Borrowed from Borrowed from family or friends other sources only use of a credit card (figure 5.8; map 5.3). In devel- Source: Global Findex database. oping economies family and friends were the Note: People may borrow from multiple sources, but most common source, reported by almost half of categories are constructed to be mutually exclusive. borrowers. But formal borrowing was the most Borrowed formally includes all adults who borrowed any money from a financial institution or through the use of common source in some developing economies, a credit card. Borrowed semiformally includes all adults including Argentina, Brazil, China, Peru, and who borrowed any money semiformally (from a savings club) but not formally. Borrowed from family or friends Turkey as well as Russia and many other econo- excludes adults who borrowed formally or semiformally. mies in Europe and Central Asia (figure 5.9). MAP 5.3 Formal borrowing around the world Adults borrowing from a financial institution or through the use of a credit card in the past year (%), 2017 0–9 10–19 20–29 30–49 50–100 No data Source: Global Findex database. 76 | F I N D E X 2 017 FIGURE 5.9 Individual developing economies show much variation in the most common source of credit Adults borrowing any money in the past year (%), 2017 Bangladesh Brazil China Colombia Congo, Dem. Rep. Côte d’Ivoire Egypt, Arab Rep. Ethiopia India Indonesia Kenya Mexico Borrowed formally Borrowed semiformally Morocco Borrowed from family or friends Mozambique Borrowed from other sources only Myanmar Nigeria Pakistan Peru Philippines Rwanda South Africa Tanzania Turkey Vietnam Zambia 0 10 20 30 40 50 60 70 Source: Global Findex database. Note: People may borrow from multiple sources, but categories are constructed to be mutually exclusive. Borrowed formally includes all adults who borrowed any money from a financial institution or through the use of a credit card. Borrowed semiformally includes all adults who borrowed any money semiformally (from a savings club) but not formally. Borrowed from family or friends excludes adults who borrowed formally or semiformally. Borrowing semiformally, from a savings club such as a rotating savings and credit association, was reported by 3 percent of adults in developing economies. But the share was much higher in some: 31 percent in Rwanda and between 11 and 18 percent in six Sub-Saharan African economies— Cameroon, Kenya, Libe- ria, Malawi, Sierra Leone, and Uganda—as well as Indonesia and Pakistan. Other sources of borrowing, including private informal lenders, were reported by 4 percent of adults globally. S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I E N C E | 77 Globally, the share of adults reporting formal borrowing, including through the use of a credit card, remained flat between 2014 and 2017, at 23 percent.5 This trend of credit card use remaining flat holds for both high-income and develop- ing economies on average. What is the role of credit cards in formal borrowing? Credit cards are a payment instrument, but they also serve as a source of credit. Credit cards extend short-term credit whenever used, even when credit card holders pay off their balance in full each statement cycle and as a result pay no interest on that balance. The introduction of credit cards might therefore have affected the demand for and use of short-term credit. As reported in the chapter on the use of accounts, 49 percent of adults in high-income economies used a credit card in 2017. In developing economies, despite continued growth in credit card use in recent years, only 8 percent on average reported using one. But this share exceeded 15 percent in China and in some economies in Europe and Cen- tral Asia as well as Latin America and the Caribbean. In high-income economies borrowing through the use of a credit card domi- nates formal borrowing. Among those who reported borrowing formally, about a third borrowed from a financial institution while two-thirds borrowed by using a credit card but did not borrow from a financial institution (figure 5.10). Among developing economies, four stand out for relatively high credit card use: Argen- tina, Brazil, Croatia, and Turkey, where more than 20 percent of adults reported using a credit card in the past 12 months. In these four countries, as in high- income economies, adults borrowing through the use of a credit card but not a loan from a financial institution make up about two-thirds of all those who reported borrowing formally. FIGURE 5.10 Credit card use dominates formal borrowing in high-income economies Adults borrowing formally in the past year (%), 2017 60 40 20 0 High- Argentina Brazil Croatia Turkey income economies Borrowed from a financial institution Used a credit card but did not borrow from a financial institution Source: Global Findex database. 78 | F I N D E X 2 017 What are the main reasons for borrowing? For what purposes do people borrow? One common purpose is to buy land or a home, the largest financial investment that many people make in their life. In 2017, 27 percent of adults in high-income economies reported having an outstanding housing loan from a bank or another type of financial institution (map 5.4). In contrast, that share was typically less than 10 percent in develop- ing economies. Even among high-income economies there is much variation in the share of adults with a formal housing loan. While about half of adults in the Netherlands, Norway, and Sweden reported having one, 10 percent or less did so in Chile, Greece, Latvia, and Uruguay. The 2017 Global Findex survey asked whether people had borrowed money in the past 12 months for health or medical purposes or to start, operate, or expand a business.6 This could have been money borrowed from any source, including a financial institution, a savings club, and family or friends. In developing economies 11 percent of adults reported having borrowed in the past year for health or medical purposes. Among this group, 79 percent reported having borrowed only from family or friends or from other nonformal sources. Borrowing to start, operate, or expand a business was reported by 7 percent of adults in developing economies overall. On average, about half of them reported MAP 5.4 Formal housing finance outstanding around the world Adults with an outstanding loan from a financial institution to purchase a home or land (%), 2017 0–9 10–19 20–29 30–100 No data Source: Global Findex database. S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I E N C E | 79 having borrowed from a financial institution and half from family or friends or other nonformal sources. In high-income economies less than 5 percent of adults reported having borrowed for health or medical purposes or to start, operate, or expand a business. The survey also asked about both saving and borrowing to start, operate, or expand a business. Saving and borrowing are two basic ways to finance invest- ments in business. In developing economies 18 percent of adults reported having either saved or borrowed for a business. Most of them saved: 11 percent of adults had only saved, 3 percent had saved and borrowed, and 4 percent had only bor- rowed. It is notable that twice as many reported having saved for a business as reported having borrowed for one—though that may in part reflect a pattern in which people may save long before starting a business but borrow only once the business is about to start operation. Nevertheless, this highlights the need for both savings and credit products for business owners. Financial resilience Financial inclusion is not an end in itself but a means to an end—when people have a safe place to save money as well as access to credit when needed, they are better able to manage financial risk. To better understand how financially resilient people around the world are to unexpected expenses, the 2017 Global Findex survey asked respondents whether or not it would be possible to come up with an amount equal to 1/20 of gross national income (GNI) per capita in local currency within the next month. It also asked what their main source of funding would be. Globally, 54 percent of adults reported that it would be possible to come up with this amount. In high-income economies 73 percent said that it would be possible. In developing economies a smaller share did so, 50 percent. But the ability to come up with emergency funds is not just a function of the income level in an economy. In Ethiopia, a low-income economy, 57 percent of adults said that it would be possible to come up with the emergency funds, the same share as in China, an upper-middle-income economy. And just under half of adults reported that it would be possible in both Brazil, an upper-middle-income economy, and India, a lower-middle-income one. It is also possible that cultural differences across economies influence the type of emergency people are imagining or whether people are inclined to say that it is possible to come up with emergency funds. In high-income economies women were about as likely as men to say that it would be possible to come up with the money. But in developing economies women were 11 percentage points less likely than men to say this. Not surprisingly, there were also differences by income level: adults living in the poorest 40 percent of households within economies were on average 27 percentage points less likely to say they could come up with the funds than those living in the richest 60 per- cent. This holds in both high-income and developing economies. 80 | F I N D E X 2 017 What are the sources of emergency funds? FIGURE 5.11 People in high-income economies are Among those saying that it would be possible to more likely to be able to raise emergency come up with the funds, what would be their main funds—and to do so through savings Adults able to raise emergency funds (%), 2017 source of funding? Globally, savings, money from working, and family or friends were each named by about a third of these respondents—or just High-income economies under 20 percent of all adults. But while in high- income economies the majority of those able to come up with the emergency funds (or 43 percent Developing of all adults) cited savings as their main source, in economies developing economies two-thirds (or 34 percent of all adults) cited either money from working or 0 20 40 60 80 family and friends as their main source (figure Main source of funds 5.11). Borrowing from a bank, an employer, or a Savings Money from working Borrowing from a Family or friends private lender was cited as the main source of bank, an employer, Other emergency funds by 7 percent of adults in high- or a private lender income economies, but by only a negligible share Source: Global Findex database. in developing economies. Other sources of funds Note: Other includes all respondents who chose were cited by less than 3 percent of adults globally. “selling assets,” “other sources,” “don’t know,” or “refuse” as their response for main source of emergency funds. Among those who cited savings as their main source of funding, three-quarters reported hav- ing saved at a financial institution in high-income economies but only half did so in developing economies. Does it matter how people save for a potential emer- gency? Savings in any form that can be readily accessed can help people handle emergencies. But saving in nonformal ways—such as through a savings club or in the form of livestock, jewelry, or real estate—may mean that the savings will not be readily accessible in an emergency. The savings club might have spent the money, and selling livestock, jewelry, or real estate quickly or without a loss might not be possible. And while saving cash at home may keep it readily accessi- ble, saving money at a bank or another type of financial institution offers poten- tial advantages. One is safety from theft. Another is that formal saving can curb impulse spending and therefore encourage better cash management, ensuring that money is available in an emergency. Relying on money from working or family and friends as the main source of emergency funds is a pattern replicated in many developing economies. But these two sources are not necessarily cited in equal proportion in every econ- omy. Money from working was most commonly cited as the main source of funds in China, Indonesia, and Tanzania—and family or friends as the main source in Brazil, Egypt, and India (figure 5.12). In Ethiopia the two sources were equally likely to be cited by those able to come up with emergency funds. In Kenya three sources—money from working, family or friends, and savings—were all equally likely to be cited. Pakistan is among the few developing economies where sav- ings was most commonly cited as the main source of funds—reported by 20 per- cent of adults. But among this group, only about 1 in 10 reported having saved at a financial institution in the past year, while the rest saved in nonformal ways. S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I E N C E | 81 FIGURE 5.12 People in different developing economies may turn to different sources for emergency funds Adults able to raise emergency funds (%), 2017 Brazil China Egypt, Arab Rep. Main source of funds Savings Ethiopia Money from working Borrowing from a bank, an employer, India or a private lender Family or friends Indonesia Selling assets Other Kenya Pakistan Tanzania 0 10 20 30 40 50 60 Source: Global Findex database. Note: Other includes all respondents who chose “other sources,” “don’t know,” or “refuse” as their response for main source of emergency funds. FIGURE 5.13 Not surprisingly, money from working was much For adults active in the labor force in more likely to be reported as the main source of developing economies, money from emergency funds by adults active in the labor working is the main source of emergency force. These respondents were about four times funds Adults able to raise emergency funds (%), 2017 as likely to cite this source in both high-income and developing economies (figure 5.13). Relying High-income economies Developing economies 80 on money from working could be interpreted as working more—by putting in more hours or 60 seeking additional work—or receiving a salary advance from an employer. But people might also 40 interpret money from working as the regular sal- 20 ary they receive for their labor. In this case these funds could also be considered savings, since any 0 share of salary that is not spent is technically Employed Out of Employed Out of or seeking labor or seeking labor savings. But respondents did not consider money work force work force from working to be savings, which was a separate Main source of funds response option for the main source of emer- Savings Money from working Family or friends Other gency funds. Sources: Global Findex database; Gallup World Poll 2017. Adults active in the labor force were also more Note: Other includes all respondents who chose “borrowing from a bank, an employer, or a private likely to report that it would be possible to come lender,” “selling assets,” “other sources,” “don’t up with emergency funds. In high-income econ- know,” or “refuse” as their response for main source of omies on average they were about 7 percentage emergency funds. 82 | F I N D E X 2 017 points more likely to do so than adults out of the FIGURE 5.14 labor force—and in developing economies on Among agricultural households average, about 15 percentage points more likely experiencing a bad harvest or significant to do so. And for those active in the labor force loss of livestock in Sub-Saharan Africa, most bear all the financial risk themselves in developing economies who said that it would Adults living in a household where growing crops or be possible to come up with emergency funds, raising livestock is a main source of household income (%), 2017 money from working was by far the most com- mon source—cited by 24 percent of this group Benin (see figure 5.13). Central African Republic What is the exposure to financial risk in Congo, Dem. Rep. agriculture? Côte d’Ivoire Ethiopia The ability to manage financial risk is especially important for people earning their living in agri- Kenya culture by growing crops or raising livestock, Malawi because of their exposure to weather and disease Mali shocks. A new survey module on financial risk Mozambique management in agriculture, used for adults living in households engaged in growing crops or rais- Nigeria ing livestock in selected developing economies, Rwanda sheds new light on the extent of this exposure.7 Tanzania Among adults in the surveyed economies, about 4 in 10 in East Asia and the Pacific, 4 in 10 in South Togo Asia, and 5 in 10 in Sub-Saharan Africa reported Uganda living in a household where growing crops or Zambia raising livestock is a main source of household 0 20 40 60 80 income. About half these adults reported that their household had experienced a bad harvest Share of adults living in a household where growing crops or raising livestock is a main source of or significant livestock loss in the past five years. household income And most of these households bear the entire Of which Experienced a bad harvest or significant financial risk of such a loss, receiving no com- livestock loss in the past 5 years pensation through either an insurance payout or Of which Received compensation for a bad harvest government assistance. or significant livestock loss This overall pattern is replicated across econ- Source: Global Findex database. omies. Consider Uganda, representative of the Note: The total length of each bar represents the share of adults living in a household where growing crops or exposure to financial risk in agriculture for raising livestock is a main source of household income. adults in low- and lower-middle-income econ- omies in Sub-Saharan Africa: Just over half of adults in that country reported growing crops or raising livestock as a main source of their household’s income, while a quarter of adults reported that their household had experienced a bad harvest or significant livestock loss in the past five years. And only 10 percent reported having received compensation for such a loss (figure 5.14). S AV I N G, C R E D I T, A N D F I N A N C I A L R E S I L I E N C E | 83 Notes 1. Although savings clubs often require a commitment to regular periodic saving outside the home, they are referred to in this report as a semiformal savings option because they may not ensure that money is safe from theft or loss and because they do not allow those who use them to make payments from their account or to build a personal sav- ings history. 2. Globally, 3 percent of unbanked adults reported having saved formally. 3. The numbers for savings behavior by adults with and without an account in developing economies are the same as the global numbers, except that the share of adults with an account who reported saving formally is 31 percent in developing economies as com- pared with 38 percent globally. 4. Saving for a business also includes saving to start, operate, or expand a farm. 5. The 2011 Global Findex survey asked only about ownership of a credit card (not the use of one), so no comparable measure can be constructed for 2011. The share of adults reporting formal borrowing excluding through the use of a credit card has remained flat at 11 percent. 6. Borrowing for a business also includes borrowing to start, operate, or expand a farm. 7. Additional work is under way on a comprehensive analysis of the agricultural financial risk management module. 84 | F I N D E X 2 017 SPOTLIGHT ACCESS TO MOBILE PHONES AND THE INTERNET AROUND THE WORLD Mobile phones and the internet have created new opportunities for providing financial services. Relatively simple, text-based mobile phones allow the use of mobile money accounts, for example, and smartphone technology provides a convenient means for people to make transactions from their financial insti- tution account. But people’s ability to use digital financial services like these depends on their having access to the necessary technology. How many people around the world own a mobile phone and have access to the internet? According to 2017 Gallup World Poll data, 93 percent of adults in high-income economies have their own mobile phone, while 79 percent do in developing economies (map S.1). In India 69 percent of adults have a mobile phone, as do 85 percent in Brazil and 93 percent in China. Women are less likely than men to have a mobile phone. In developing econo- mies 84 percent of men and 74 percent of women own a mobile phone, reflecting a gender gap of 10 percentage points. The gap is bigger in some economies. In Pakistan, for example, men are more than twice as likely as women to have a mobile phone. Yet several developing economies have no appreciable gender gap, including Brazil, China, Colombia, Indonesia, and Turkey. Not surprisingly, there is also a gap in mobile phone ownership between richer and poorer adults. Globally, 85 percent of adults living in the richest 60 percent of households within economies have a mobile phone, compared with 76 percent of those living in the poorest 40 percent. Bigger gaps are found in the developing world, particularly Sub-Saharan Africa. Ethiopia, Mozambique, Tanzania, and Zambia are among the economies where the gap is 20 percentage points or more. In Côte d’Ivoire, however, the share of poorer adults who have a mobile phone, at 75 percent, is roughly the same as the share of wealthier adults who have one. Having access to the internet as well as a mobile phone brings a wider range of financial services within reach. In high-income economies 82 percent of adults have both a mobile phone and access to the internet, indicating a likelihood that they have access to app-based mobile phone or online payments. In developing economies only 40 percent of adults—or about half of mobile phone owners— have access to both technologies. 86 | F I N D E X 2 017 MAP S.1 Mobile phone ownership around the world Adults with a mobile phone (%), 2017 0–60 60–69 70–79 80–89 90–100 No data Source: Gallup World Poll 2017. In developing economies, while 43 percent of men have both a mobile phone and access to the internet, 37 percent of women do—a gender gap of 6 percentage points. Men are twice as likely as women to have access to both these technolo- gies in some economies, including Bangladesh, Ethiopia, and India. But men and women have equal access in China, Colombia, and South Africa. Wealthier adults are more likely than their poorer counterparts to have access to both a mobile phone and the internet. In the developing world 48 percent of adults in the richest 60 percent of households within economies have these tech- nologies, while 28 percent of those in the poorest 40 percent do—a gap of 20 per- centage points. In Kenya the gap is nearly twice as large, at 39 percentage points; in Colombia it is 29 percentage points. S P OT L I G H T | 87 6 OPPORTUNITIES FOR EXPANDING FINANCIAL INCLUSION THROUGH DIGITAL TECHNOLOGY Global Findex data reveal many opportunities to increase account ownership among the 1.7 billion adults who remain unbanked. The data also point to ways to leverage new products and technologies to boost the use of accounts among those who already have one. This chapter outlines opportunities focused on moving into accounts the transactions that people are already making in cash. Shifting payments from cash into accounts can have benefits beyond expanding account ownership and increasing account use. Research suggests that digitiz- ing payments can improve their efficiency by increasing the speed of payments and reducing the cost of disbursing and receiving them.1 It can also enhance the security of payments and thus lower the incidence of associated crime.2 And disbursing payments through digital channels rather than cash has been shown to increase transparency and reduce corruption.3 Moreover, by providing an important first entry point into the formal financial system, shifting to digital payments can lead to substantial increases in saving as well as the substitution of formal for informal saving.4 For businesses and governments alike, however, the challenge is to ensure that digital payments are indeed better than the cash-based alternatives—safer, more affordable, and more transparent. The landscape for digital payments Mobile phones and the internet have given rise to a new generation of financial services. Using these services does not necessarily require sophisticated devices. In Sub-Saharan Africa relatively simple, text-based mobile phones have pow- ered the spread of mobile money accounts. Similar services are available in other parts of the developing world. And smartphone technology is increasingly being used to make transactions through financial institution accounts in some devel- oping economies. But mobile phones and the internet can drive financial inclusion only if they are underpinned by the necessary infrastructure. Physical infrastructure—such as reliable electricity and mobile networks—is key. People will be less inclined to use digital payments if network outages or other technical problems undermine their dependability. Financial infrastructure is also needed. This includes both | 89 an adequate payments system and a physical network to deliver payments to all corners of an economy—both urban and rural. While financial institutions might not find it cost-effective to open a brick-and-mortar branch in every place that has a large unbanked population, they can use agent banking—forming part- nerships with post offices or retail shops to offer basic financial services to cus- tomers. People using digital payments need to be able to deposit and withdraw cash safely, reliably, and conveniently at cash-in and cash-out points, whether these take the form of a bank agent, a mobile money agent, or an automated teller machine (ATM).5 Ideally, people receiving digital payments would keep their funds in digital form and make purchases and pay bills electronically. But in many places digital payments are not yet widely accepted for everyday pur- chases at local retail stores and markets, especially in developing economies. So most people need to be able to cash out at least some of the money they receive through digital payments. Indeed, a reliable cash-out experience is key to the success of digital payments.6 Technology and infrastructure are only part of the picture. To ensure that people benefit from digital financial services, governments need to ensure that appropri- ate regulations and consumer protection safeguards are in place. And regardless of the technology used, financial services need to be tailored to the needs of dis- advantaged groups such as women, poor people, and first-time users, who may have low literacy and numeracy skills. Also important is to look at who has access to the digital technology needed to use the services—and who does not. Creating an enabling environment As this chapter shows, digitizing payments of wages and government benefits has the potential to increase both the ownership and use of accounts. Yet efforts to digitize such payments have suffered from shortcomings. A common com- plaint among those receiving government transfers as digital payments is that the payment products are difficult to use. Recipients have reported long lines at bank agents and said that they struggle to get help when they have a question or a problem with their payments. Others have reported being targeted for fraud.7 Putting in place consumer protection rules is critical to safeguard people from fraud and abuse.8 Such protections are especially important for women and low- income people, who are most likely to be financially inexperienced. This under- scores the importance of targeted financial literacy and capability training, which can have a positive impact in such areas as increasing saving and promot- ing financial skills like record keeping.9 Also needed are regulations to facilitate financial inclusion, such as by introducing tiered documentation requirements, requiring banks to offer basic or low-fee accounts, and embracing opportunities to use new technologies to expand access to formal financial services.10 Where lack of trust in financial institutions is an important barrier to account ownership, quality product design and strong consumer protection stan- dards could potentially help increase financial inclusion. Distrust has many causes, including government seizures of banks, discrimination against certain 90 | F I N D E X 2 017 population groups, and past episodes of hyperinflation and bank failures. Indi- vidual financial service providers might not be able to address systemic causes of mistrust. But they can shore up trust in their own products by treating people fairly and providing quick, convenient, and effective redress in response to con- sumer concerns. Such efforts are critical in ensuring that newly banked adults benefit from financial inclusion. Digital technology–based biometric identification cards provide another way of lowering barriers to account ownership. In India, where 90 percent of unbanked adults reported having proof of identity issued by the national government, recent research suggests that government-provided biometric identification cards were among the factors enabling a rapid decline in the number of adults without an account.11 Research in Malawi suggests that biometric identification has increased loan repayment rates among borrowers most at risk of default.12 Splicing Global Findex data with new data from the World Bank Identification for Development (ID4D) project reveals fresh insights into the relationship between account ownership and access to documentation. In developing econ- omies 85 percent of adults without an account at a financial institution have government-issued identification.13 Yet in Sub-Saharan Africa, where those without a financial institution account were especially likely to cite documen- tation requirements as a barrier, only 56 percent of adults reported having government-issued identification. Improving access to the government-issued identification required by know- your-customer (KYC) regulations often is not enough to increase account own- ership, however, even where many people without a financial institution account cite documentation requirements as a barrier to opening one. One reason is that national identification does not always satisfy the documentation requirements. People often need to show local identification as well—such as a utility bill with a home address—and this can be hard to come by. Leveraging digital technology among the unbanked In many high-income economies debit and credit cards used at point-of-sale (POS) terminals dominate the digital payments landscape. In most developing economies, by contrast, few people have such cards. But many have a mobile phone, which could allow these economies to leapfrog directly to mobile payments. Simply having a mobile phone can potentially allow access to mobile money accounts and other text- or app-based financial accounts. Having access to the internet as well expands the possibilities. Indeed, Global Findex data suggest that mobile phones and the internet could go a long way toward helping to over- come some of the barriers that unbanked adults say prevent them from access- ing financial services. For example, digital financial services might shrink the distance between financial institutions and their customers. And by lowering the cost of providing financial services, digital technology might be helpful for O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 91 MAP 6.1 Two-thirds of unbanked adults have a mobile phone Adults without an account owning a mobile phone, 2017 1 million 10 million 100 million 200 million Sources: Global Findex database; Gallup World Poll 2017. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less. FIGURE 6.1 those citing high costs as a reason for not having Mobile phone ownership among the an account at a financial institution. unbanked varies across economies but tends to be high Global Findex data show that mobile phone own- Adults without an account (%), 2017 ership is widespread among the unbanked. Glob- Bangladesh ally, about 1.1 billion unbanked adults—about two-thirds of all those without an account—have China a mobile phone (map 6.1). India But mobile phone ownership in this group varies Indonesia among economies. Consider the seven economies Mexico that are home to nearly half the world’s unbanked adults (figure 6.1). Except in Pakistan, more than Nigeria half of unbanked adults have a mobile phone, and Pakistan in China the share is as high as 82 percent. 0 20 40 60 80 Unbanked women are less likely than their male Mobile phone No mobile phone counterparts to own a mobile phone. Globally, Sources: Global Findex database; Gallup World Poll 2017. 72 percent of unbanked men have a mobile phone, compared with 62 percent of unbanked women —a gender gap of 10 percentage points. But this 92 | F I N D E X 2 017 gender gap differs among developing economies. FIGURE 6.2 In Indonesia and South Africa unbanked women In Sub-Saharan Africa mobile phone are just as likely as unbanked men to have a ownership offers large opportunities among the unbanked mobile phone. Yet large gender gaps are found in Adults without an account (%), 2017 Nigeria and Pakistan. Women Botswana Among the unbanked in Sub-Saharan Africa, Men 54 percent of men have a mobile phone while 43 percent of women do—a gender gap of 11 per- Women centage points. Yet in several economies in the Mozambique Men region, including Mozambique and Senegal, unbanked women are about as likely as their Women male counterparts to own a mobile phone (figure Rwanda Men 6.2). And in some economies, such as Botswana and Zimbabwe, unbanked women are more likely Women than unbanked men to have a mobile phone. Senegal Men Notably, mobile phone ownership is also high Women among adults without a financial institution Zambia Men account who cited distance as a barrier: glob- ally, 64 percent reported owning a mobile phone. Women The share is even higher in some economies with Zimbabwe Men remote areas or remote islands where digital financial services could be especially effective. 0 20 40 60 80 In Indonesia, for example, where 33 percent of Mobile phone No mobile phone adults without a financial institution account cited distance as a barrier, 69 percent of this Sources: Global Findex database; Gallup World Poll 2017. group reported having a mobile phone. And in the Philippines, among the 41 percent citing dis- FIGURE 6.3 tance as a barrier, 71 percent reported owning a The unbanked are relatively unlikely mobile phone. to have both a mobile phone and access to the internet Adults without an account (%), 2017 Not surprisingly, a smaller share of unbanked adults have both a mobile phone and access to Bangladesh the internet in some form—whether through a smartphone, a home computer, an internet café, Brazil or some other method. Globally, this share is China about 25 percent. But there are big differences Indonesia among major developing economies (figure 6.3). In Brazil nearly 60 percent of unbanked adults Nigeria have access to both technologies. In South Africa Pakistan about 33 percent do, in China 25 percent do, and in Indonesia almost 20 percent do. The share South Africa drops to about 10 percent in Bangladesh, Nigeria, 0 20 40 60 80 and Pakistan. Mobile phone No mobile phone and internet and internet Sources: Global Findex database; Gallup World Poll 2017. O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 93 Opportunities for expanding account ownership among the unbanked Millions of unbanked adults around the world still receive regular payments in cash—for wages, from the government, for the sale of agricultural products. Dig- itizing such payments is a proven way to increase account ownership. Globally, 9 percent of adults—or 13 percent of account owners—opened their first account specifically to receive private sector wages, government payments, or payments for the sale of agricultural products. The share is higher in many economies (fig- ure 6.4). In the Islamic Republic of Iran, Malaysia, and Zambia nearly 20 percent of account owners opened their first account to receive such digital payments. The same is true for about 25 percent of FIGURE 6.4 Millions of adults opened their first account to account owners in Argentina, Peru, the receive digital payments Russian Federation, and Turkey—and Adults with an account (%), 2017 for about 40 percent in the Arab Repub- lic of Egypt and Kazakhstan. Argentina There is room to build on this progress. Brazil This section outlines opportunities to China increase account ownership by moving regular cash payments into accounts. Egypt, Arab Rep. Indonesia Digitizing payments from government to people Iran, Islamic Rep. Kazakhstan Governments make several types of payments to people—paying wages to Kenya public sector employees, distributing Malaysia public sector pensions, and providing government transfers to those needing Mexico social benefits. Globally, about 100 mil- Mongolia lion unbanked adults receive such pay- ments in cash (map 6.2). These include Peru 60 million women as well as 55 mil- Russian Federation lion adults in the poorest 40 percent of households within economies. These South Africa numbers suggest the potential for Thailand increasing account ownership by mov- ing these payments into accounts. Turkey Zambia Indeed, Global Findex data show that digitizing government payments has 00 2 40 60 80 100 already had an effect in increasing Opened first account to receive private sector account ownership. Among adults wages, government payments, or payments for agricultural products around the world who already have an account, roughly 80 million opened Source: Global Findex database. their first account to collect public 94 | F I N D E X 2 017 MAP 6.2 About 100 million unbanked adults receive government payments in cash Adults without an account receiving government payments in the past year in cash only, 2017 100,000 1 million 10 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less or the share receiving government payments is 10 percent or less. sector wage payments, including 35 million women. About 140 million account owners opened their first account to receive government transfers—including 80 million women as well as nearly 75 million adults in the poorest 40 percent of households. And about 120 million adults opened their first account to receive a public sector pension.14 Digital payments of public sector wages alone have spurred big increases in account ownership in some developing economies. In Uzbekistan 17 percent of adults with an account opened their first account to collect public sector wages; in Jordan 10 percent did so. Digital payments of government transfers have had a similar impact. Among adults in Argentina who have an account, about 11 percent opened their first account to receive government transfers. In Thailand 14 percent did so. Women and poorer adults may benefit disproportionately when governments dig- itize transfer payments. Among women with an account in Brazil, about 10 per- cent got their first account to receive government transfers. In Argentina nearly a quarter of account owners in the poorest 40 percent of households opened their first account for the same reason—and in Thailand 17 percent did so. O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 95 FIGURE 6.5 Digital payments of public sector pensions have Digitizing government payments to also increased account ownership. In Egypt people could reduce the number of about 14 percent of account owners opened their unbanked first account to receive such payments, as did Adults without an account (%), 2017 roughly 10 percent in Russia and Turkey. Ethiopia Important opportunities remain to increase account ownership by moving government pay- Philippines ments into accounts. In Vietnam 12 percent of Russian unbanked adults receive such payments in cash; Federation the share is similar in Ethiopia and Uzbekistan and twice as high in Russia (figure 6.5). In the Uzbekistan Philippines digitizing government payments could reduce the share of unbanked adults by up Vietnam to 16 percent and the share of unbanked women 0 20 40 60 80 by up to 20 percent. Received government payments in the past year in cash only Governments in East Asia and the Pacific could potentially bring millions of unbanked adults Source: Global Findex database. into the formal financial system by distributing transfers through digital payments rather than in cash. In Vietnam nearly 4 million unbanked adults receive government transfers in cash—and in Indonesia and the Philippines about 6 million do. In Europe and Central Asia digitizing public sector pension payments could have a big impact. In Russia and Ukraine about a quarter of unbanked adults receive such payments in cash. In Romania about a third do. Many unbanked adults receiving government payments in cash—whether gov- ernment transfers or public sector wages or pensions—have the basic technology needed to receive these payments in digital form. Of the 60 million unbanked adults worldwide who receive government transfers in cash, two-thirds have a mobile phone. Among the 4 million in Vietnam, 72 percent have a mobile phone. And among the 6 million in the Philippines, 58 percent do. Digitizing payments from businesses to people Just as for governments, Global Findex data show that businesses could boost account ownership by paying their unbanked employees through accounts rather than in cash. Globally, 13 percent of unbanked adults—about 230 mil- lion people—receive private sector wage payments in cash, including 80 million women as well as 100 million adults in the poorest 40 percent of households within economies (map 6.3). And 78 percent of these wage earners have a mobile phone. Moving payments of private sector wages into accounts has already proved to be effective in increasing account ownership. Globally, about 200 million adults 96 | F I N D E X 2 017 MAP 6.3 About 230 million unbanked adults in private sector jobs are paid in cash Adults without an account receiving private sector wages in the past year in cash only, 2017 100,000 1 million 10 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less or where the share receiving private sector wage payments is 10 percent or less. opened their first account to collect wage pay- FIGURE 6.6 ments from a private sector employer. These Most unbanked adults receiving private include 85 million women as well as 50 million sector wages in cash have a mobile phone Adults without an account (%), 2017 adults in the poorest 40 percent of households. Argentina Digitizing private sector wage payments could Colombia reduce the number of unbanked adults by up Egypt, Arab Rep. to a fifth in Argentina, Colombia, and Egypt Indonesia and by up to almost a third in Indonesia and the Philippines. In Indonesia alone, that would Mexico mean expanding account ownership to up to Nepal 25 million unbanked adults. Large shares of Pakistan these wage earners already have a mobile phone Philippines that could help facilitate electronic wage pay- ments (figure 6.6). In Nepal, among the 20 per- Vietnam cent of unbanked adults who receive private 0 20 40 60 80 sector wage payments in cash, 70 percent have Received private sector wages in the past year in cash a mobile phone. In some developing economies only and had a mobile phone mobile phone ownership among this group Received private sector wages in the past year in cash only and did not have a mobile phone is considerably higher—about 90 percent in Argentina, Egypt, and Vietnam. Sources: Global Findex database; Gallup World Poll 2017. O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 97 Digitizing payments for agricultural products Another opportunity to increase account ownership is in digitizing payments for the sale of agricultural products. About 235 million unbanked adults in develop- ing economies receive such payments in cash, among them 110 million women as well as 125 million adults in the poorest 40 percent of households (map 6.4). But many other people have received agricultural payments into an account. In developing economies about 40 million adults with an account opened their first one to receive payments for the sale of agricultural products. Yet there is room to do much more. Digitizing agricultural payments could cut the number of unbanked adults by up to a quarter or more in Mozambique, Nige- ria, and Vietnam; by up to roughly a third in Burkina Faso and Sierra Leone; and by up to half or more in Ethiopia (figure 6.7). Making agricultural payments through mobile phones could be especially help- ful for unbanked farmers living in remote rural areas—many of whom have access to a phone. Among unbanked adults receiving agricultural payments in cash, 59 percent have a mobile phone. In Ethiopia and Sierra Leone only about 33 percent do. But the share is nearly twice as large in Côte d’Ivoire and Nigeria. MAP 6.4 About 235 million unbanked adults receive agricultural payments in cash Adults without an account receiving payments for agricultural products in the past year in cash only, 2017 1 million 10 million 100 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less or where the share receiving payments for agricultural products is 10 percent or less. 98 | F I N D E X 2 017 Digitizing domestic remittances and FIGURE 6.7 formalizing saving Digitizing agricultural payments could reduce the number of unbanked adults Adults without an account (%), 2017 The common practice of sending money to friends or relatives in another part of the country Burkina Faso also offers opportunities for increasing account Congo, Dem. Rep. ownership. In developing economies 260 million Côte d’Ivoire unbanked adults—16 percent of all those with- out an account—send or receive domestic remit- Ethiopia tances in cash or using an over-the-counter Indonesia (OTC) service such as Western Union (map Mozambique 6.5). That number includes about 140 million Nepal unbanked women. Domestic remittances are most common in Sub-Saharan Africa, where Nigeria they are sent or received in cash or using an OTC Philippines service by roughly a quarter of unbanked adults Sierra Leone —about 90 million in all. Tanzania Moving domestic remittances into accounts Uganda could be an especially effective way to increase Vietnam account ownership in several economies (figure Zambia 6.8). In Nigeria 37 percent of unbanked adults use domestic remittances; similar shares do so in 0 20 40 60 80 Côte d’Ivoire, the Philippines, and South Africa. Received payments for agricultural products in the past year in cash only and had a mobile phone Received payments for agricultural products in the past The most common method for sending or receiv- year in cash only and did not have a mobile phone ing domestic remittances varies across econ- omies. In the Philippines and South Africa Sources: Global Findex database; Gallup World Poll 2017. unbanked adults are more likely to use an OTC service. But they are more likely to use cash in Nigeria as well as in Egypt and most other economies in the Middle East and North Africa. Compared with those who use cash for remittances, people who use OTC services represent a potentially easier opportunity to increase account ownership. Because these people are already comfortable with digital payments, they might find it easier to make the transition to using an account—while those who have never made digital payments might be skeptical about entrusting their money to a financial service provider. But the challenge will be to design a product that can compete with an OTC transaction on costs: one reason that people rely on an OTC service rather than an account to send domestic remittances electronically is that using an OTC service can be less expensive.15 Unbanked adults also use varied methods of saving. Among those who save semi- formally, some entrust their money to a person outside the family. Many, partic- ularly in Sub-Saharan Africa, rely on a savings club. One example is a rotating savings and credit association, which typically operates by pooling members’ weekly deposits and disbursing the entire amount to a different member each week. Many people who choose to save semiformally may be drawn to the social O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 99 MAP 6.5 About 260 million unbanked adults use cash or an OTC service for domestic remittances Adults without an account sending or receiving domestic remittances in the past year in cash or using an OTC service only, 2017 100,000 1 million 10 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less or where the share sending or receiving domestic remittances is 10 percent or less. FIGURE 6.8 Digitizing domestic remittances could aspect of savings clubs. But using an account have a big effect in some economies might be an attractive option if financial insti- Adults without an account (%), 2017 tutions offered free or low-cost interest-bearing Congo, Dem. Rep. savings products requiring little or no minimum Côte d’Ivoire balance. And moving semiformal saving into Egypt, Arab Rep. accounts represents an important opportunity to Ethiopia increase financial inclusion. Indonesia Mozambique In developing economies about 150 million Nigeria unbanked adults—nearly 1 in 10 —save semi- formally (map 6.6). In Sub-Saharan Africa alone, Philippines South Africa Tanzania Vietnam Zambia 0 20 40 60 80 Sent or received domestic remittances in the past year in cash or using an OTC service only Source: Global Findex database. 10 0 | F I N D E X 2 017 MAP 6.6 Nearly 1 in 10 unbanked adults saves using semiformal methods Adults without an account saving semiformally in the past year, 2017 1 million 10 million 100 million Source: Global Findex database. Note: Data are not displayed for economies where the share of adults without an account is 5 percent or less or where the share saving semiformally is 10 percent or less. Data on semiformal saving are not collected in most high-income economies. FIGURE 6.9 Millions of unbanked adults in Sub- up to 65 million unbanked adults save semi- Saharan Africa save using semiformal formally, including 35 million women. Moving methods semiformal saving into accounts could reduce Adults without an account (%), 2017 the number of unbanked adults by up to 23 per- cent in Nigeria and by up to 32 percent in Ethio- Burkina Faso pia (figure 6.9). Semiformal savings methods are Cameroon also widely used in some economies outside Sub- Côte d’Ivoire Saharan Africa—including by almost a fifth of Ethiopia unbanked adults in Pakistan and nearly a quarter Mali of those in Indonesia. Nigeria Sierra Leone South Africa Tanzania Uganda Zambia 0 20 40 60 80 Saved semiformally in the past year Source: Global Findex database. O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 10 1 Opportunities for increasing the use of accounts among the banked Although financial inclusion starts with having an account, its benefits come from actively using that account—for saving, for managing risk, for making or receiving payments. Just as there are opportunities to increase account own- ership, so are there opportunities to help people who already have an account make better use of it. Most people do take advantage of their accounts: globally, only 20 percent of adults with an account reported that it was inactive, with no deposit or with- drawal in the past year. Yet Global Findex data suggest several ways to further increase the use of accounts among all account owners. This is not simply a mat- ter of account owners choosing to use accounts rather than cash. Financial ser- vice providers need to offer safe, affordable, and convenient products that make using accounts more appealing than using cash. How governments choose to make payments to people also matters. Many gov- ernments already use digital payment channels to pay public sector employees and distribute social benefits and public sector pensions. But in some econo- mies opportunities remain to strengthen governments’ use of digital payments. Globally, 2 percent of account owners—90 million adults who have an account —receive government transfers, public sector pensions, or public sector wages in cash. The share is as high as 12 percent in Ethiopia and 14 percent in the Philippines. FIGURE 6.10 Businesses generally lag behind governments Millions of account owners receive when it comes to using digital payrolls. About private sector wages in cash 300 million account owners worldwide work in Adults with an account (%), 2017 the private sector and get paid in cash, including Bangladesh 90 million in India. Indeed, India is one of several Brazil major developing economies where 10 percent or more of account owners receive private sector China wage payments in cash; the share is almost twice India as large in Indonesia, Myanmar, and Nepal (fig- Indonesia ure 6.10). Myanmar Nepal Large numbers of account owners receive cash Peru payments for the sale of agricultural products Philippines —roughly 275 million in developing economies, Thailand including 15 million in Bangladesh and 80 million in China. The share of account owners receiving Vietnam agricultural payments in cash is about 25 percent 0 20 40 60 80 100 in Bangladesh, Uganda, and Uzbekistan—and Received private sector wages in the past year 54 percent in Ethiopia (figure 6.11). Digitizing in cash only agricultural value chains offers multiple oppor- Source: Global Findex database. tunities for increasing the use of accounts, not just through payments for the sale of agricultural 10 2 | F I N D E X 2 017 products but also through important related pay- FIGURE 6.11 ments, such as for purchases of crop insurance Millions of account owners receive and agricultural inputs. payments for the sale of agricultural products in cash Adults with an account (%), 2017 Globally, at least 145 million adults with an account receive payments from self-employment Bangladesh exclusively in cash. These include nearly 12 mil- China lion account owners in Brazil and about 15 mil- lion in Indonesia. Digitizing these payments, and Ethiopia thus increasing their transparency, could pro- India vide financial service providers with informa- Indonesia tion needed to extend and deepen access to financial services for both retailers and custom- Kenya ers. Extending digital payments throughout the Nigeria value chain of the consumer goods businesses that supply many small, self-employed mer- Philippines chants would also benefit distributors by improv- Tanzania ing the efficiency of payment collection and help Thailand to reinforce the use of digital payments through- out supply chains. Yet increasing the digitization Uganda of retail payments involves challenges, including Uzbekistan the need to ensure that using digital payments for retail transactions is an attractive option for 0 20 40 60 80 100 both merchants and customers.16 Received payments for agricultural products in the past year in cash only Arguably the single best way to increase account Source: Global Findex database. use would be to more fully digitize payments for water, electricity, and other utility bills. Glob- ally, 1 billion adults with an account still pay utility bills in cash (map 6.7). In some economies people have the option of paying utility bills digitally but choose not to because of high fees, lack of proof of payment, or other concerns. If more utilities offered an attractive option for digital payments, efficiency could be improved on both sides. While about a quarter of account owners worldwide pay utility bills in cash, the share is higher in many major developing economies. About a third of account owners pay utility bills this way in China, Ethiopia, South Africa, and Turkey, and more than twice that share do so in Thailand and Vietnam. In Egypt 81 percent of account owners pay utility bills in cash (figure 6.12). And in both Brazil and Indonesia about 25 million women with an account still use cash to pay utility bills. Digital technology could offer an alternative to cash for utility payments. Glob- ally, about 910 million adults pay utility bills in cash despite having an account as well as a mobile phone. And roughly half a billion adults pay utility bills in cash even though they have an account, a mobile phone, and access to the internet. In Brazil, China, Peru, and Turkey about 60 percent of account own- ers who pay utility bills in cash have access to both a mobile phone and the internet. The shares are larger in Colombia and Vietnam, smaller in Egypt and South Africa. O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 10 3 MAP 6.7 A billion adults who have an account still pay utility bills in cash Adults with an account paying utility bills in the past year in cash only, 2017 1 million 10 million 100 million 200 million Source: Global Findex database. Domestic remittances also offer potential for increasing the use of accounts. About 280 million account owners in developing economies use cash or an OTC service to send or receive domestic remittances. In Algeria and the Philippines roughly a quarter of account owners use one of these methods to do so (figure 6.13). Formalizing saving is yet another way to increase account use. In developing economies 160 million account owners save semiformally, such as by using a sav- ings club or savings collector to make regular savings payments, but not formally (by using an account at a financial institution). Semiformal saving is particularly widespread in Sub-Saharan Africa. About 25 percent of account owners save semiformally (but not formally) in Burkina Faso and Côte d’Ivoire, while about 33 percent do so in Cameroon and Uganda (figure 6.14). Elsewhere, in Indonesia and Pakistan about a fifth of account owners use semiformal (but not formal) savings methods. Finally, wider acceptance of mobile payments could encourage greater use of accounts for retail transactions. This is especially true in economies where account owners are much more likely to have a mobile phone than a debit card, putting them in a position to leapfrog to mobile payments.17 In India about 10 4 | F I N D E X 2 017 FIGURE 6.12 FIGURE 6.13 In many developing economies a third or Millions who have an account use other more of account owners pay utility bills means to send or receive domestic in cash remittances Adults with an account (%), 2017 Adults with an account (%), 2017 Algeria Brazil Bangladesh China Colombia Colombia Egypt, Arab Rep. Indonesia Ethiopia Philippines India South Africa Indonesia Turkey Mexico 0 20 40 60 80 Peru Sent or received domestic remittances in the past year in cash or using an OTC service only Philippines Source: Global Findex database. South Africa Thailand FIGURE 6.14 Turkey Millions of account owners save semiformally rather than by using their Vietnam account 0 20 40 60 80 Adults with an account (%), 2017 Paid utility bills in the past year in cash only and had a mobile phone Burkina Faso Paid utility bills in the past year in cash only and did not Cameroon have a mobile phone Côte d’Ivoire Sources: Global Findex database; Gallup World Poll 2017. Kenya Mozambique 100 million adults with an inactive account have Nigeria a debit card, while nearly 2.5 times as many— South Africa 240 million—have an inactive account plus a Tanzania mobile phone. In both Russia and Thailand about Uganda 4 million adults have an inactive account and a debit card, while roughly twice as many have Zambia an inactive account as well as a mobile phone. Zimbabwe Already equipped with an account and a mobile 0 20 40 60 80 100 phone, these people might be inclined to use Saved semiformally but not formally in the past year mobile payments if given attractive opportuni- ties to do so. Source: Global Findex database. O P P O R T U N I T I E S F O R E X PA N D I N G F I N A N C I A L I N C L U S I O N T H R O U G H D I G I TA L T E C H N O LO G Y | 10 5 Notes 1. For an overview, see Better Than Cash Alliance (2016); Demirgüç-Kunt, Klapper, and Singer (2017); and Klapper and Singer (2017). 2. Wright and others (2017). 3. Muralidharan, Niehaus, and Sukhtankar (2016). 4. See Karlan and others (2016). 5. See Klapper and Singer (2017). 6. Kendall and Voorhies (2014). 7. See Zimmerman and Baur (2016); and Stuart (2016). 8. See World Bank Group (2017). 9. See Miller and others (2014). 10. For a discussion of regulations to facilitate financial inclusion, see Claessens and Rojas-Suarez (2016). 11. See Demirgüç-Kunt and others (2017). 12. See Giné (2010). 13. Data on indicators that are part of the World Bank ID4D project were collected in col- laboration with Gallup, Inc., and, like the Global Findex data, were collected only in economies where Gallup, Inc., conducts face-to-face interviews. This means that the data are available primarily for developing economies. In 13 high-income economies included in the 2017 Global Findex database, however, Gallup, Inc., conducts face- to-face rather than phone interviews, and in these economies data were collected for the ID4D indicators. Conversely, no data are available for the 4 developing economies included in the database where Gallup, Inc., conducts interviews by phone. 14. People may receive more than one type of government payment. 15. See World Bank Remittance Prices Worldwide Database (2017). 16. For additional discussion, see “Merchant Payments,” Consultative Group to Assist the Poor, accessed March 27, 2018, http://www.cgap.org/about/people/merchant-payments. 17. See Zetterli and Pillai (2016). 10 6 | F I N D E X 2 017 REFERENCES Aker, Jenny C., Rachid Boumnijel, Amanda McClelland, and Niall Tierney. 2016. “Payment Mechanisms and Anti-Poverty Programs: Evidence from a Mobile Money Cash Transfer Experiment in Niger.” Tufts University Working Paper, Fletcher School and Department of Economics, Tufts University, Medford, MA. Better Than Cash Alliance. 2016. “Accelerators to an Inclusive Digital Payments Ecosystem: Prioritization Framework and Guide.” Better Than Cash Alliance, New York. https:// www.betterthancash.org. Brune, Lasse, Xavier Giné, Jessica Goldberg, and Dean Yang. 2016. “Facilitating Savings for Agriculture: Field Experimental Evidence from Malawi.” Economic Development and Cultural Change 64 (2): 187–220. Claessens, Stijn, and Liliana Rojas-Suarez. 2016. “Financial Regulations for Improving Financial Inclusion.” CGD Task Force Report, Center for Global Development, Wash- ington, DC. Demirgüç-Kunt, Asli, Leora Klapper, Saniya Ansar, and Aditya Jagati. 2017. “Making It Eas- ier to Apply for a Bank Account: A Study of the Indian Market.” Policy Research Working Paper 8205, World Bank, Washington, DC. Demirgüç-Kunt, Asli, Leora Klapper, and Dorothe Singer. 2017. “Financial Inclusion and Inclusive Growth: A Review of Recent Empirical Evidence.” Policy Research Working Paper 8040, World Bank, Washington, DC. Dupas, Pascaline, Dean Karlan, Jonathan Robinson, and Diego Ubfal. Forthcoming. “Bank- ing the Unbanked? Evidence from Three Countries.” American Economic Journal: Applied Economics. Dupas, Pascaline, and Jonathan Robinson. 2013. “Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya.” American Economic Jour- nal: Applied Economics 5 (1): 163–92. Giné, Xavier. 2010. “Using Biometric Technology in Rural Credit Markets: The Case of Malawi.” Finance & PSD Impact Evaluation Note, no. 11, World Bank, Washington, DC. Jack, William, and Tavneet Suri. 2014. “Risk Sharing and Transactions Costs: Evidence from Kenya’s Mobile Money Revolution.” American Economic Review 104 (1): 183–223. Karlan, Dean, Jake Kendall, Rebecca Mann, Rohini Pande, Tavneet Suri, and Jonathan Zin- man. 2016. “Research and Impacts of Digital Financial Services.” NBER Working Paper 22633, National Bureau of Economic Research, Cambridge, MA. Kendall, Jake, and Rodger Voorhies. 2014. “The Mobile-Finance Revolution: How Cell Phones Can Spur Development.” Foreign Affairs 93 (2): 9–13. Klapper, Leora, and Dorothe Singer. 2017. “The Opportunities and Challenges of Digitizing Government-to-Person Payments.” World Bank Research Observer 32 (2): 211–26. | 10 9 Miller, Margaret, Julia Reichelstein, Christian Salas, and Bilal Zia. 2014. “Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature.” Policy Research Working Paper 6745, World Bank, Washington, DC. Muralidharan, Karthik, Paul Niehaus, and Sandip Sukhtankar. 2016. “Building State Capac- ity: Evidence from Biometric Smartcards in India.” American Economic Review 106 (10): 2895–929. Prina, Silvia. 2015. “Banking the Poor via Savings Accounts: Evidence from a Field Experi- ment.” Journal of Development Economics 115 (July): 16–31. Schaner, Simone. 2017. “The Cost of Convenience? Transaction Costs, Bargaining Power, and Savings Account Use in Kenya.” Journal of Human Resources 52 (4): 919–45. Stuart, Guy. 2016. “Government-to-Person Transfers: On-Ramp to Financial Inclusion?” Center for Financial Inclusion, Washington, DC. Suri, Tavneet, and William Jack. 2016. “The Long-Run Poverty and Gender Impacts of Mobile Money.” Science 354 (6317): 1288–92. World Bank Group. 2017. Good Practices for Financial Consumer Protection, 2017 Edition. Washington, DC: World Bank. World Bank Remittance Prices Worldwide Database. 2017. “Remittance Prices Worldwide: An Analysis of Trends in Cost of Remittance Services.” Issue 24. World Bank, Washing- ton, DC. Wright, Richard, Erdal Tekin, Volkan Topalli, Chandler McClellan, Timothy Dickinson, and Richard Rosenfeld. 2017. “Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program.” Journal of Law and Economics 60 (2): 361–83. Zetterli, Peter, and Rashmi Pillai. 2016. “Digitizing Merchant Payments: What Will It Take?” CGAP Note, Consultative Group to Assist the Poor, Washington, DC. Zimmerman, Jamie M., and Silvia Baur. 2016. “Understanding How Consumer Risks in Dig- ital Social Payments Can Erode Their Financial Inclusion Potential.” CGAP Brief, Con- sultative Group to Assist the Poor, Washington, DC. 110 | F I N D E X 2 017 SURVEY METHODOLOGY The indicators in the 2017 Global Findex database are drawn from survey data covering almost 150,000 people in 144 economies—representing more than 97 percent of the world’s population (see table A.1 for a list of the economies included). The survey was carried out over the 2017 calendar year by Gallup, Inc., as part of its Gallup World Poll, which since 2005 has annually conducted surveys of approximately 1,000 people in each of more than 160 economies and in over 150 languages, using randomly selected, nationally representative sam- ples. The target population is the entire civilian, noninstitutionalized population age 15 and above. Interview procedure Surveys are conducted face to face in economies where telephone coverage represents less than 80 percent of the population or where this is the custom- ary methodology. In most economies the fieldwork is completed in two to four weeks. In economies where face-to-face surveys are conducted, the first stage of sam- pling is the identification of primary sampling units. These units are stratified by population size, geography, or both, and clustering is achieved through one or more stages of sampling. Where population information is available, sample selection is based on probabilities proportional to population size; otherwise, simple random sampling is used. Random route procedures are used to select sampled households. Unless an out- right refusal occurs, interviewers make up to three attempts to survey the sam- pled household. To increase the probability of contact and completion, attempts are made at different times of the day and, where possible, on different days. If an interview cannot be obtained at the initial sampled household, a simple substitu- tion method is used. Respondents are randomly selected within the selected households. Each eli- gible household member is listed and the handheld survey device randomly selects the household member to be interviewed. For paper surveys, the Kish grid method is used to select the respondent.1 In economies where cultural | 111 restrictions dictate gender matching, respondents are randomly selected from among all eligible adults of the interviewer’s gender. In economies where telephone interviewing is employed, random digit dialing or a nationally representative list of phone numbers is used. In most economies where cell phone penetration is high, a dual sampling frame is used. Random selection of respondents is achieved by using either the latest birthday or house- hold enumeration method. At least three attempts are made to reach a person in each household, spread over different days and times of day. Data preparation Data weighting is used to ensure a nationally representative sample for each economy. Final weights consist of the base sampling weight, which corrects for unequal probability of selection based on household size, and the poststratifi- cation weight, which corrects for sampling and nonresponse error. Poststrati- fication weights use economy-level population statistics on gender and age and, where reliable data are available, education or socioeconomic status. Table A.1 shows the data collection period, number of interviews, approximate design effect, and margin of error for each economy as well as sampling details where relevant. Additional information about the Global Findex data, including the complete database, can be found at http://www.worldbank.org/globalfindex. Additional information about the methodology used in the Gallup World Poll can be found at http://www.gallup.com/178667/gallup-world-poll-work.aspx. Note 1. The Kish grid is a table of numbers used to select the interviewee. First, the inter- viewer lists the name, gender, and age of all permanent household members age 15 and above, whether or not they are present, in order by age. Second, the interviewer finds the column number of the Kish grid that corresponds to the last digit of the question- naire and the row number for the number of eligible household members. The number in the cell where the column and row intersect is the person selected for the interview. 112 | F I N D E X 2 017 TABLE A.1 Details of survey methodology for economies included in the 2017 Global Findex survey and database Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Afghanistan SAS Low May 22– 1,000 1.47 3.8 Face to face Dari, Pashto Gender-matched Jun 20, sampling was used 2017 during the final stage of selection. Albania ECA Upper May 18– 1,000 1.30 3.5 Face to faced Albanian middle Jun 12, 2017 Algeria MNA Upper Sep 11– 1,016 1.44 3.7 Face to faced Arabic Sample excludes middle Sep 26, sparsely populated 2017 areas in the far South, representing about 10% of the population. Argentina LAC Upper Jun 22– 1,000 1.37 3.6 Face to faced Spanish Sample excludes middle Aug 14, dispersed rural 2017 population areas, representing about 5.7% of the population. Armenia ECA Lower Jun 6– 1,000 1.28 3.5 Face to faced Armenian middle Jun 29, 2017 Australia HI High Apr 28– 1,008 2.19 4.6 Landline English Jul 17, and cellular 2017 telephone Austria HI High May 30– 1,000 1.29 3.5 Landline German Jun 28, and cellular 2017 telephone Azerbaijan ECA Upper Jul 25– 1,000 1.41 3.7 Face to faced Azeri, Russian Sample excludes middle Aug 15, Kelbadjaro-Lacha, 2017 Nagorno-Karabakh, and Nakhichevan territories, representing about 14% of the population. Bahrain HI High May 2– 1,060 1.44 3.6 Landline Arabic, Sample includes only May 20, and cellular English Bahraini nationals, Arab 2017 telephone expatriates, and non- Arabs who were able to participate in the survey in Arabic or English. Bangladesh SAS Lower Apr 18– 1,000 1.34 3.6 Face to faced Bengali Sample excludes middle May 4, three hill districts in 2017 Chittagong (Bandarban, Khagrachori, and Rangamati) for security reasons. The excluded areas represent about 1% of the population. Belarus ECA Upper Jun 24– 1,053 1.39 3.6 Face to face d Russian middle Jul 18, 2017 Belgium HI High Jul 11– 1,001 1.42 3.7 Landline French, Dutch Sep 18, and cellular 2017 telephone Benin SSA Low May 1– 1,000 1.53 3.8 Face to faced Bariba, Fon, May 14, French, Anago 2017 Bolivia LAC Lower Jul 2–Sep 1,000 1.44 3.7 Face to faced Spanish middle 20, 2017 Bosnia and ECA Upper May 19– 1,000 1.28 3.5 Face to faced Bosnian, Herzegovina middle Jun 14, Croatian, 2017 Serbian Botswana SSA Upper May 21– 1,000 1.54 3.8 Face to faced English, middle Jun 7, Setswana 2017 S U R V E Y M E T H O D O LO G Y | 113 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Brazil LAC Upper May 11– 1,000 1.39 3.7 Face to faced Portuguese middle Jun 15, 2017 Bulgaria ECA Upper May 11– 1,000 1.49 3.8 Face to faced Bulgarian middle Jun 26, 2017 Burkina Faso SSA Low May 16– 1,000 1.63 4.0 Face to faced Dioula, May 29, French, 2017 Fulfulde, Moore Cambodia EAP Lower Mar 18– 1,600 1.42 2.9 Face to faced Khmer middle Apr 8, 2017 Cameroon SSA Lower Feb 21– 1,000 1.45 3.7 Face to faced French, Sample excludes some middle Mar 7, English, localities because of 2017 Fulfulde security concerns: Blangoua, Bourrha, Darak, Fotokol, Goulfey, Hile-Alifa, Kolofata, Koza, Mayo Moskota, Mogode, Mora, Tokombere, Waza, and Zina. The excluded areas represent about 10% of the population. Canada HI High Aug 10– 1,003 1.58 3.9 Landline English, Nov 29, and cellular French 2017 telephone Central SSA Low May 21– 1,000 1.56 3.9 Face to faced French, Sample excludes some African Jun 5, Sangho prefectures because Republic 2017 of security concerns: Bamingui-Bangoran, Basse-Kotto, Haute- Kotto, Haut-Mbomou, Mbomou, Nana-Grébizi, Ouham, Ouham-Pende, and Vakaga. The excluded areas represent about 40% of the estimated population. Chad SSA Low Apr 17– 1,000 1.65 4.0 Face to faced French, Sample excludes seven May 4, Chadian regions because of 2017 Arabic, security concerns and Ngambaye wilderness (Bourkou, Ennedi, Ouaddai, Salamat, Sila, Tibesti, and Wadi Fira) as well as quartiers or villages with less than 50 inhabitants. The excluded areas represent about 20% of the population. Chile HI High Jul 8– 1,040 1.59 3.8 Face to face d Spanish Sample excludes the Aug 10, remote areas Antarctica, 2017 Easter Island, and Juan Fernández Island, representing about 0.04% of the population. China EAP Upper May 14– 3,627 1.53 2.0 Face to face Chinese Sample excludes middle Jul 7, Tibet and Xinjiang, 2017 representing less than 5% of the population. Unless otherwise noted, data for China do not include data for Hong Kong SAR, China; Macao SAR, China; or Taiwan, China. Colombia LAC Upper Jun 16– 1,000 1.32 3.6 Face to faced Spanish middle Jul 5, 2017 114 | F I N D E X 2 017 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Congo, SSA Low Mar 25– 1,000 1.51 3.8 Face to faced French, Sample excludes parts Dem. Rep. Apr 15, Kituba, of several provinces 2017 Lingala (Eastern Kasai, Equateur, Katanga, North Kivu, Orientale, and South Kivu) and all of Western Kasai province for security reasons. The excluded areas represent about 34% of the estimated population. Congo, Rep. SSA Lower May 6– 1,000 1.65 4.0 Face to faced French, middle May 31, Lingala, 2017 Kikongo, Swahili, Tshiluba Costa Rica LAC Upper Apr 19– 1,000 1.48 3.8 Face to faced Spanish middle Jul 1, 2017 Côte d’Ivoire SSA Lower May 14– 1,000 1.56 3.9 Face to faced French, Dioula middle May 30, 2017 Croatia ECA Upper May 23– 1,000 1.38 3.6 Face to faced Croatian middle Jul 9, 2017 Cyprus HI High Apr 27– 1,023 1.39 3.6 Landline Greek, English Jun 20, and cellular 2017 telephone Czech HI High Apr 4–Jul 1,000 1.28 3.5 Face to faced Czech Republic 11, 2017 Denmark HI High May 5– 1,000 1.30 3.5 Landline Danish May 30, and cellular 2017 telephone Dominican LAC Upper Jul 11–Jul 1,000 1.43 3.7 Face to faced Spanish Republic middle 28, 2017 Ecuador LAC Upper Jun 10– 1,000 1.32 3.6 Face to faced Spanish middle Jul 6, 2017 Egypt, Arab MNA Lower May 16– 1,000 1.24 3.4 Face to faced Arabic Sample excludes frontier Rep. middle May 26, governorates (Matruh, 2017 New Valley, North Sinai, Red Sea, and South Sinai) because of their remoteness and small population share. The excluded areas represent less than 2% of the population. El Salvador LAC Lower May 20– 1,000 1.59 3.9 Face to faced Spanish middle Jun 13, 2017 Estonia HI High Jun 15– 1,000 1.21 3.4 Face to faced Estonian, Jul 15, Russian 2017 Ethiopia SSA Low May 2– 1,000 1.40 3.7 Face to faced Amharic, Jun 26, Oromo, 2017 Tigrinya Finland HI High Apr 26– 1,000 1.35 3.6 Cellular Finnish, May 30, telephone Swedish 2017 France HI High Apr 19– 1,000 1.41 3.7 Landline French May 18, and cellular 2017 telephone Gabon SSA Upper Jun 14– 1,000 1.55 3.9 Face to faced French, Fang, middle Jul 5, Punu 2017 Georgia ECA Lower Jun 9– 1,000 1.32 3.6 Face to faced Georgian, middle Jun 29, Russian 2017 S U R V E Y M E T H O D O LO G Y | 115 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Germany HI High Apr 19– 1,000 1.40 3.7 Landline German May 18, and cellular 2017 telephone Ghana SSA Lower May 20– 1,000 1.36 3.6 Face to faced English, Ewe, middle Jun 10, Hausa, Twi, 2017 Dagbani Greece HI High May 20– 1,000 1.30 3.5 Face to faced Greek Jun 16, 2017 Guatemala LAC Lower May 17– 1,000 1.26 3.5 Face to faced Spanish middle Jun 12, 2017 Guinea SSA Low Jul 10– 1,000 1.43 3.7 Face to faced French, Jul 27, Malinke, Pular, 2017 Soussou Haiti LAC Low Jul 13–Jul 504 1.27 4.9 Face to face d Creole 22, 2017 Honduras LAC Lower May 24– 1,000 1.45 3.7 Face to faced Spanish middle Jun 18, 2017 Hong Kong HI High Apr 27– 1,007 1.37 3.6 Landline Chinese SAR, China Jul 8, and cellular 2017 telephone Hungary HI High May 14– 1,000 1.36 3.6 Face to faced Hungarian Jun 21, 2017 India SAS Lower Apr 21– 3,000 1.48 2.2 Face to faced Assamese, Sample excludes middle Jun 2, Bengali, Northeast states 2017 Gujarati, Hindi, and remote islands, Kannada, representing less than Malayalam, 10% of the population. Marathi, Odia, Punjabi, Tamil, Telugu Indonesia EAP Lower Apr 10– 1,000 1.38 3.6 Face to faced Bahasa middle May 20, Indonesia 2017 Iran, Islamic MNA Upper May 23– 1,004 1.65 4.0 Landline Farsi Rep. middle Jun 15, and cellular 2017 telephone Iraq MNA Upper May 15– 1,000 1.51 3.8 Landline Arabic, middle Jun 9, and cellular Kurdish 2017 telephone Ireland HI High Mar 14– 1,000 1.22 3.4 Landline English Apr 10, and cellular 2017 telephone Israel HI High May 24– 1,000 1.12 3.3 Face to face Hebrew, Sample excludes East Jun 22, Russian, Jerusalem. This area is 2017 Arabic included in the sample for West Bank and Gaza. Italy HI High Jan 30– 1,000 1.49 3.8 Landline Italian Feb 23, and cellular 2017 telephone Japan HI High Apr 5– 1,005 1.46 3.7 Landline Japanese Landline random-digit- Jul 9, and cellular dial sample excludes 12 2017 telephone municipalities near the nuclear power plant in Fukushima, representing less than 1% of the population. Jordan MNA Lower Apr 25– 1,012 1.30 3.5 Face to face d Arabic Sample includes any middle Jul 10, respondent in a fixed 2017 household able to participate in the survey in Arabic. This resulted in a higher percentage of self- reported non-Jordanians in the 2017 sample (12%, compared with less than 5% in previous waves). 116 | F I N D E X 2 017 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Kazakhstan ECA Upper Jun 5–Jul 1,000 1.42 3.7 Face to faced Russian, middle 2, 2017 Kazakh Kenya SSA Lower Mar 11– 1,000 1.53 3.8 Face to faced English, middle Mar 24, Swahili 2017 Korea, Rep. HI High Mar 29– 1,000 1.47 3.8 Landline Korean Jul 5, and cellular 2017 telephone Kosovo ECA Lower May 15– 1,000 1.30 3.5 Face to faced Albanian, middle Jun 16, Serbian 2017 Kuwait HI High May 18– 1,000 1.34 3.6 Landline Arabic, Sample includes Jun 5, and cellular English only Kuwaitis, Arab 2017 telephone expatriates, and non- Arabs who were able to complete the interview in Arabic or English. Kyrgyz ECA Lower Jul 10– 1,000 1.04 3.2 Face to faced Kyrgyz, Republic middle Jul 25, Russian, 2017 Uzbek Lao PDR EAP Lower Sep 1– 1,000 1.33 3.6 Face to faced Lao Sample excludes middle Sep 27, Xaisomboun Province 2017 and some communes in Bokeo, Huaphanh, Luangnamtha, Luangprabang, Oudomxay, Phongsaly, Saravane, Sekong, Xayaboury, and Xienkhuang because of remoteness or security issues. The excluded areas represent about 10% of the population. Latvia HI High Jun 5–Jul 1,002 1.30 3.5 Face to face d Latvian, 27, 2017 Russian Lebanon MNA Upper Apr 20– 1,000 1.37 3.6 Face to faced Arabic Sample excludes towns middle May 29, of Baalbek, Bint Jbeil, 2017 and Hermel under the control of Hezbollah as well as the Beirut suburb of Dahiyeh. The excluded areas represent about 13% of the population. Excluded zones were replaced by areas within the same governorate. Lesotho SSA Lower Oct 26– 1,000 1.45 3.7 Face to faced English, Sotho middle Nov 10, 2017 Liberia SSA Low May 31– 1,000 1.32 3.6 Face to faced English, Pidgin Jul 4, English 2017 Libya MNA Upper May 17– 1,002 1.80 4.2 Cellular Arabic middle May 27, telephone 2017 Lithuania HI High Jul 17– 1,000 1.36 3.6 Face to faced Lithuanian Aug 6, 2017 Luxembourg HI High Apr 19– 1,000 1.45 3.7 Landline French, May 18, and cellular German 2017 telephone Macedonia, ECA Upper Jun 4–Jul 1,008 1.43 3.7 Face to faced Macedonian, FYR middle 26, 2017 Albanian Madagascar SSA Low Mar 28– 1,000 1.55 3.9 Face to faced French, Sample excludes unsafe May 2, Malagasy or inaccessible regions, 2017 representing about 25% of the population. S U R V E Y M E T H O D O LO G Y | 117 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Malawi SSA Low May 22– 1,000 1.37 3.6 Face to faced Chichewa, Jun 1, English, 2017 Tumbuka Malaysia EAP Upper May 9, 1,004 1.63 3.9 Landline Bahasa Malay, middle 2017–Jan and cellular Chinese, 2, 2018 telephone English Mali SSA Low Jul 23– 1,000 1.52 3.8 Face to faced French, Sample excludes the Aug 6, Bambara regions of Gao, Kidal, 2017 Mopti, and Tombouctou because of security concerns. These regions represent 23% of the population. Malta HI High Mar 17– 1,003 1.57 3.9 Landline Maltese, Apr 15, and cellular English 2017 telephone Mauritania SSA Lower Mar 27– 1,000 1.64 4.0 Face to faced French, middle Apr 7, Poulaar, 2017 Wolof, Hassanya Mauritius SSA Upper Apr 19– 1,000 1.43 3.7 Landline Creole, middle May 31, and cellular English, 2017 telephone French Mexico LAC Upper Jun 8–Jul 1,000 1.46 3.7 Face to face Spanish middle 8, 2017 Moldova ECA Lower Jul 21– 1,000 1.18 3.4 Face to faced Romanian, Sample excludes middle Aug 8, Russian Transnistria 2017 (Prednestrovie) because of security concerns. The excluded area represents about 13% of the population. Mongolia EAP Lower May 25– 1,000 1.24 3.5 Face to faced Mongolian middle Jun 30, 2017 Montenegro ECA Upper May 12– 1,000 1.41 3.7 Face to faced Montenegrin, Sampling frame middle Jun 15, Serbian excluded some very 2017 small and remote villages (with less than 150 people), representing about 0.5–1.5% of the population. Morocco MNA Lower Oct 20– 5,110 1.54 1.7 Face to faced Moroccan An equal sample size middle Dec 15, Arabic was used for each 2017 region (disproportionate sampling). Data were weighted to population distribution. Mozambique SSA Low Jun 2– 1,000 1.48 3.8 Face to faced Portuguese, Aug 22, Xichangana, 2017 Cisena, Emakhuwa Myanmar EAP Lower Mar 18– 1,600 1.30 2.8 Face to face d Burmese Sample excludes Chin, middle Apr 3, Kachin, and Kayah 2017 states, representing less than 5% of the population. Namibia SSA Upper May 23– 1,000 1.49 3.8 Face to faced English, middle Jul 26, Oshivambo 2017 Nepal SAS Low Aug 10– 1,000 1.45 3.7 Face to faced Nepali Sep 12, 2017 Netherlands HI High Jul 11– 1,000 1.40 3.7 Landline Dutch Sep 1, and cellular 2017 telephone New Zealand HI High Feb 18– 1,000 1.50 3.8 Landline English Apr 28, and cellular 2017 telephone 118 | F I N D E X 2 017 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Nicaragua LAC Lower May 10– 1,000 1.55 3.9 Face to faced Spanish middle Jun 15, 2017 Niger SSA Low Apr 28– 1,000 1.50 3.8 Face to faced French, Hausa, May 11, Zarma 2017 Nigeria SSA Lower Apr 4– 1,000 1.55 3.9 Face to faced English, Sample excludes the middle Apr 28, Hausa, Igbo, states of Adamawa, 2017 Pidgin English, Borno, and Yobe Yoruba because of security concerns. These states represent 7% of the population. Norway HI High Apr 28– 1,000 1.43 3.7 Landline Norwegian May 30, and cellular 2017 telephone Pakistan SAS Lower Mar 20– 1,600 1.43 2.9 Face to faced Urdu middle May 3, 2017 Panama LAC Upper May 9– 1,000 1.47 3.8 Face to faced Spanish middle Jun 5, 2017 Paraguay LAC Upper Dec 15, 1,000 1.30 3.5 Face to faced Spanish, middle 2017–Jan Jeporá 18, 2018 Peru LAC Upper Jul 1–Jul 1,000 1.48 3.8 Face to faced Spanish middle 25, 2017 Philippines EAP Lower Jul 16– 1,000 1.41 3.7 Face to faced Filipino, Iluko, middle Aug 7, Hiligaynon, 2017 Cebuano, Masbatenyo, Waray, Tausug Poland HI High Aug 12– 1,000 1.32 3.6 Face to faced Polish Sep 25, 2017 Portugal HI High Mar 27– 1,002 1.43 3.7 Landline Portuguese May 3, and cellular 2017 telephone Romania ECA Upper Apr 12– 1,001 1.46 3.7 Face to faced Romanian, middle Jun 15, Hungarian 2017 Russian ECA Upper Jun 9– 2,000 1.35 2.5 Face to faced Russian Sample excludes Federation middle Aug 20, remote or difficult- 2017 to-access areas in the Far North, North Caucasus, and Far East (Nenets autonomous region, Yamalo-Nenets autonomous region, Chukotsk region) as well as other remote or difficult-to-access districts. The excluded areas represent about 20% of the population. Rwanda SSA Low Dec 7– 1,000 1.32 3.6 Face to faced Kinyarwanda, Dec 20, English 2017 Saudi Arabia HI High Apr 30– 1,009 1.43 3.7 Landline Arabic, Sample includes only May 20, and cellular English Saudi nationals, Arab 2017 telephone expatriates, and non- Arabs who were able to participate in the survey in Arabic or English. Senegal SSA Low Mar 27– 1,000 1.36 3.6 Face to faced French, Wolof Apr 9, 2017 Serbia ECA Upper May 15– 1,000 1.38 3.6 Face to faced Serbian middle Jun 27, 2017 S U R V E Y M E T H O D O LO G Y | 119 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Sierra Leone SSA Low Mar 25– 1,000 1.36 3.6 Face to faced English, Krio, Apr 11, Mende 2017 Singapore HI High May 17– 1,000 1.39 3.7 Face to face English, Condominiums were Aug 9, Chinese, covered on a best- 2017 Bahasa Malay effort basis; 7% of condo dwellers were excluded from the survey. About 14% of the population were living in condominiums as of 2016. Slovak HI High May 12– 1,000 1.36 3.6 Face to faced Hungarian, Republic Jun 6, Slovak 2017 Slovenia HI High Mar 3– 1,000 1.50 3.8 Landline Slovene Apr 5, and cellular 2017 telephone South Africa SSA Upper Jun 20– 1,000 1.41 3.7 Face to faced Afrikaans, middle Jul 5, English, Sotho, 2017 Xhosa, Zulu South Sudan SSA Low Jun 21– 1,000 1.50 3.8 Face to faced Arabic, Bari, Sample excludes parts Jul 23, Dinka, English, of 9 of 10 states because 2017 Juba Arabic, of security concerns. It Nuer, Zande excludes the majority of Unity State and Upper Nile State as well as all of Jonglei State except Bor South County. The excluded areas represent 44% of the population. Spain HI High Jan 30– 1,000 1.62 3.9 Landline Spanish Feb 23, and cellular 2017 telephone Sri Lanka SAS Lower Jun 28– 1,104 1.55 3.7 Face to face d Sinhala, Tamil middle Aug 10, 2017 Sweden HI High May 3– 1,000 1.50 3.8 Landline Swedish May 30, and cellular 2017 telephone Switzerland HI High Apr 19– 1,000 1.40 3.7 Landline German, May 18, and cellular French, Italian 2017 telephone Taiwan, HI High Apr 10– 1,000 1.47 3.8 Landline Chinese China Jun 11, and cellular 2017 telephone Tajikistan ECA Lower Jun 15– 1,000 1.36 3.6 Face to faced Tajik middle Jul 11, 2017 Tanzania SSA Low Jul 16–Jul 1,000 1.53 3.8 Face to faced English, 30, 2017 Swahili Thailand EAP Upper Jun 6– 1,000 1.53 3.8 Face to face Thai Sample excludes three middle Sep 26, provinces in the South 2017 region (Narathiwat, Pattani, and Yala) for security reasons as well as a few districts in other provinces. The excluded areas represent less than 4% of the population. Togo SSA Low Jun 20– 1,000 1.69 4.0 Face to faced French, Ewe, Jul 1, 2017 Kabiye Trinidad and HI High Jul 17– 504 1.52 5.4 Face to face d English Tobago Oct 10, 2017 Tunisia MNA Lower Apr 11– 1,001 1.20 3.4 Face to faced Arabic middle Apr 25, 2017 12 0 | F I N D E X 2 017 Data Income collection Design Margin Mode of Exclusions and other Economy Regiona group period Interviews effectb of errorc interviewing Languages sampling details Turkey ECA Upper May 15– 1,000 1.46 3.7 Face to faced Turkish middle Jun 16, 2017 Turkmenistan ECA Upper Jun 2–Jun 1,000 1.24 3.5 Face to faced Turkmen, middle 15, 2017 Russian Uganda SSA Low Jul 19– 1,000 1.41 3.7 Face to faced Ateso, English, Jul 29, Luganda, 2017 Runyankole Ukraine ECA Lower May 30– 1,000 1.46 3.7 Face to faced Russian, Sample excludes middle Jul 20, Ukrainian occupied and conflict 2017 areas in Donetsk and Lugansk oblasts. The excluded areas represent 10% of the population. United Arab HI High Jul 2– 1,003 1.21 3.4 Landline Arabic, Sample includes only Emirates Jul 30, and cellular English Emirati nationals, Arab 2017 telephone expatriates, and non- Arabs who were able to participate in the survey in Arabic or English. United HI High Mar 14– 1,000 1.37 3.6 Landline English Kingdom Apr 10, and cellular 2017 telephone United States HI High Aug 9– 1,005 1.56 3.9 Landline English, Sep 12, and cellular Spanish 2017 telephone Uruguay HI High Jul 4–Aug 1,000 1.41 3.7 Face to faced Spanish 21, 2017 Uzbekistan ECA Lower Jun 2–Jun 1,000 1.38 3.6 Face to faced Uzbek, middle 29, 2017 Russian Venezuela, LAC Upper Aug 26– 1,000 1.69 4.0 Face to faced Spanish Sample excludes the RB middle Nov 15, Federal Dependencies 2017 because of remoteness and difficulty of access, as well as some additional areas because of security concerns. The excluded areas represent about 5% of the population. Vietnam EAP Lower Sep 25– 1,002 1.33 3.6 Face to faced Vietnamese Sample excludes 11 middle Oct 15, provinces: An Giang, 2017 Dac Lak, Dien Bien, Gia Lai, Ha Giang, Ha Tinh, Kien Giang, Kon Tum, Nghe An, Quang Binh, and Thanh Hoa. The excluded areas represent about 19% of the population. West Bank MNA Lower May 10– 1,000 1.48 3.8 Face to faced Arabic Sample excludes areas and Gaza middle May 29, with security concerns 2017 close to the Israeli borders, areas accessible only to special Israeli permit holders, and areas with a population of less than 1,000. The excluded areas represent less than 2% of the population. The sample includes East Jerusalem. Zambia SSA Lower Jun 20– 1,000 1.37 3.6 Face to faced Bemba, middle Jul 16, English, Lozi, 2017 Nyanja, Tonga Zimbabwe SSA Low Apr 8– 1,000 1.42 3.7 Face to faced English, May 8, Shona, 2017 Ndebele Source: Data on survey methodology provided by Gallup, Inc. For more details, see http://www.gallup.com/178667/gallup -world-poll-work.aspx. S U R V E Y M E T H O D O LO G Y | 121 a. Regions exclude high-income economies (HI) and may differ from common geographic usage. EAP = East Asia and the Pacific; ECA = Europe and Central Asia; LAC = Latin America and the Caribbean; MNA = Middle East and North Africa; SAS = South Asia; SSA = Sub-Saharan Africa. b. The design effect calculation reflects the weights and does not incorporate the intraclass correlation coefficients because they vary by question. Design effect calculation: n*(sum of squared weights)/[(sum of weights)*(sum of weights)]. c. The margin of error is calculated around a proportion at the 95 percent confidence level. The maximum margin of error was calculated assuming a reported percentage of 50 percent and takes into account the design effect. Margin of error calculation: √(0.25/N)*1.96*√(DE). Other errors that can affect survey validity include measurement error associated with the questionnaire, such as translation issues, and coverage error, where a part of the target population has a zero probability of being selected for the survey. d. Interviewers used a handheld device (computer-assisted personal interviewing, or CAPI) during the interviews rather than pen and paper. 12 2 | F I N D E X 2 017 INDICATOR TABLE Account ownership, 2017 Adults with an Gap between men Gap between richer account and women and poorer Economy (%) (percentage points)a (percentage points) b Afghanistan 15 15 — Albania 40 4 29 Algeria 43 27 13 Argentina 49 –4 18 Armenia 48 15 22 Australia 100 — — Austria 98 — — Azerbaijan 29 — 17 Bahrain 83 11 11 Bangladesh 50 29 17 Belarus 81 — 11 Belgium 99 — — Benin 38 20 11 Bolivia 54 — 19 Bosnia and Herzegovina 59 8 19 Botswana 51 9 27 Brazil 70 5 22 Bulgaria 72 — 29 Burkina Faso 43 17 27 Cambodia 22 — 12 Cameroon 35 9 16 Canada 100 — — Central African Republic 14 8 8 Chad 22 14 13 Chile 74 6 12 China 80 8 20 Colombia 46 7 18 Congo, Dem. Rep. 26 — 14 Congo, Rep. 26 10 13 Costa Rica 68 15 16 Côte d’Ivoire 41 11 12 Croatia 86 7 9 Cyprus 89 — 8 Czech Republic 81 5 17 | 12 3 Account ownership, 2017 Adults with an Gap between men Gap between richer account and women and poorer Economy (%) (percentage points)a (percentage points) b Denmark 100 — — Dominican Republic 56 4 23 Ecuador 51 18 30 Egypt, Arab Rep. 33 12 21 El Salvador 30 13 18 Estonia 98 — — Ethiopia 35 12 21 Finland 100 — — France 94 6 — Gabon 59 10 15 Georgia 61 –5 25 Germany 99 — — Ghana 58 8 16 Greece 85 — 7 Guatemala 44 4 23 Guinea 23 8 6 Haiti 33 5 25 Honduras 45 9 20 Hong Kong SAR, China 95 — 5 Hungary 75 6 12 India 80 6 5 Indonesia 49 –5 20 Iran, Islamic Rep. 94 5 — Iraq 23 6 7 Ireland 95 — 4 Israel 93 — 12 Italy 94 5 5 Japan 98 — — Jordan 42 30 16 Kazakhstan 59 — 16 Kenya 82 8 18 Korea, Rep. 95 — 5 Kosovo 52 17 13 Kuwait 80 10 15 Kyrgyz Republic 40 — 7 Lao PDR 29 –6 19 Latvia 93 — 8 Lebanon 45 24 25 Lesotho 46 — 22 Liberia 36 15 15 Libya 66 11 12 Lithuania 83 4 8 Luxembourg 99 — — Macedonia, FYR 77 7 16 Madagascar 18 — 9 12 4 | F I N D E X 2 017 Account ownership, 2017 Adults with an Gap between men Gap between richer account and women and poorer Economy (%) (percentage points)a (percentage points) b Malawi 34 8 21 Malaysia 85 5 8 Mali 35 20 7 Malta 97 — 4 Mauritania 21 11 13 Mauritius 90 6 6 Mexico 37 8 18 Moldova 44 — 20 Mongolia 93 –4 4 Montenegro 68 — 13 Morocco 29 25 16 Mozambique 42 18 25 Myanmar 26 — 6 Namibia 81 — 17 Nepal 45 8 12 Netherlands 100 — — New Zealand 99 — — Nicaragua 31 13 18 Niger 16 9 8 Nigeria 40 24 25 Norway 100 — — Pakistan 21 28 12 Panama 46 9 23 Paraguay 49 5 17 Peru 43 17 26 Philippines 34 –9 27 Poland 87 — 4 Portugal 92 — 8 Romania 58 9 33 Russian Federation 76 — 9 Rwanda 50 11 19 Saudi Arabia 72 22 12 Senegal 42 8 13 Serbia 71 — 12 Sierra Leone 20 9 11 Singapore 98 — — Slovak Republic 84 — 10 Slovenia 98 — — South Africa 69 — 11 South Sudan 9 8 8 Spain 94 4 — Sri Lanka 74 — 5 Sweden 100 — — Switzerland 98 — — Taiwan, China 94 — 5 I N D I C ATO R TA B L E | 12 5 Account ownership, 2017 Adults with an Gap between men Gap between richer account and women and poorer Economy (%) (percentage points)a (percentage points) b Tajikistan 47 10 14 Tanzania 47 9 16 Thailand 82 4 7 Togo 45 15 18 Trinidad and Tobago 81 15 6 Tunisia 37 17 26 Turkey 69 29 20 Turkmenistan 41 10 — Uganda 59 13 20 Ukraine 63 4 16 United Arab Emirates 88 16 9 United Kingdom 96 — — United States 93 — 13 Uruguay 64 7 25 Uzbekistan 37 — 12 Venezuela, RB 73 7 22 Vietnam 31 — 18 West Bank and Gaza 25 19 22 Zambia 46 11 24 Zimbabwe 55 8 19 Source: Global Findex database. Note: Only statistically significant gaps are shown. Gaps that fall within the reported margin of error for the survey in an economy are considered to be statistically insignificant (indicated by the use of a dash). For the margin of error for each economy, see table A.1 in the survey methodology section; see also note c in that table. Data for all indicators are available at http://www.worldbank .org/globalfindex. a. A negative value indicates that a larger share of women than men have an account. b. Gap in account ownership between adults in the richest 60 percent of households and those in the poorest 40 percent. Data are based on household income quintiles. 12 6 | F I N D E X 2 017 GLOBAL FINDEX GLOSSARY able to raise emergency funds (%): Refers to the percentage of respondents who reported that in case of an emergency it is possible for them to come up with 1/20 of gross national income (GNI) per capita in local currency within the next month. account (%): Refers to the percentage of respondents who reported having an account (by themselves or together with someone else) at a bank or another type of financial institu- tion (see definition for financial institution account) or reported personally using a mobile money service in the past 12 months (see definition for mobile money account). borrowed any money in the past year (%): Refers to the percentage of respondents who reported borrowing any money (by themselves or together with someone else) for any reason and from any source in the past 12 months. borrowed formally (%): Refers to the percentage of respondents who reported borrow- ing any money from a bank or another type of financial institution, or using a credit card, in the past 12 months. borrowed from family or friends (%): Refers to the percentage of respondents who reported borrowing any money from family, relatives, or friends in the past 12 months. borrowed semiformally (%): Refers to the percentage of respondents who reported bor- rowing any money from a savings club in the past 12 months. financial institution account (%): Refers to the percentage of respondents who reported having an account (by themselves or together with someone else) at a bank or another type of financial institution.1 has a credit card (%): Refers to the percentage of respondents who reported having a credit card. has a debit card (%): Refers to the percentage of respondents who reported having a debit card. has a national identity card (%): Refers to the percentage of respondents who reported having a national identity card. (To see the full list of IDs included in the survey by coun- try, visit the Global Findex web page at http://www.worldbank.org/globalfindex.) made or received digital payments in the past year (%): Refers to the percentage of respondents who reported using mobile money, a debit or credit card, or a mobile phone to make a payment from an account, or reported using the internet to pay bills or to buy something online, in the past 12 months. It also includes respondents who reported pay- ing bills, sending or receiving remittances, receiving payments for agricultural products, | 12 7 receiving government transfers, receiving wages, or receiving a public sector pension directly from or into a financial institution account or through a mobile money account in the past 12 months. mobile money account (%): Refers to the percentage of respondents who reported per- sonally using a mobile money service in the past 12 months.2 no deposit and no withdrawal from an account in the past year (%): Refers to the percentage of respondents who reported neither a deposit into nor a withdrawal from their account in the past 12 months. outstanding housing loan (%): Refers to the percentage of respondents who reported having an outstanding loan (by themselves or together with someone else) from a bank or another type of financial institution to purchase a home, an apartment, or land. paid utility bills from an account (%): Refers to the percentage of respondents who reported personally making regular payments for water, electricity, or trash collection in the past 12 months directly from a financial institution account or using a mobile money account. paid utility bills in cash only (%): Refers to the percentage of respondents who reported personally making regular payments for water, electricity, or trash collection in the past 12 months in cash only. paid utility bills in the past year (%): Refers to the percentage of respondents who reported personally making regular payments for water, electricity, or trash collection in the past 12 months. received a public sector pension in cash only (%): Refers to the percentage of respon- dents who reported personally receiving a pension from the government, military, or pub- lic sector in the past 12 months in cash only. received a public sector pension in the past year (%): Refers to the percentage of respondents who reported personally receiving a pension from the government, military, or public sector in the past 12 months. received a public sector pension into an account (%): Refers to the percentage of respondents who reported personally receiving a pension from the government, military, or public sector in the past 12 months directly into a financial institution account, into a card, or into a mobile money account. received domestic remittances in the past year (%): Refers to the percentage of respondents who reported personally receiving any money in the past 12 months from a relative or friend living in a different area of their country. This includes any money received in person. received government payments in cash only (%): Refers to the percentage of respon- dents who reported personally receiving payments from the government in the past 12 months in cash only. received government payments in the past year (%): Refers to the percentage of respondents who reported personally receiving any payment from the government in the past 12 months. This includes payments for educational or medical expenses, unemploy- ment benefits, subsidy payments, or any kind of social benefits (see definition for received 12 8 | F I N D E X 2 017 government transfers in the past year). It also includes pension payments from the govern- ment, military, or public sector (see definition for received a public sector pension in the past year) as well as wages from employment in the government, military, or public sector (see definition for received public sector wages in the past year). received government payments into an account (%): Refers to the percentage of respondents who reported personally receiving payments from the government in the past 12 months directly into a financial institution account, into a card, or into a mobile money account. received government transfers in cash only (%): Refers to the percentage of respon- dents who reported personally receiving any financial support from the government in the past 12 months in cash only. received government transfers in the past year (%): Refers to the percentage of respondents who reported personally receiving any financial support from the govern- ment in the past 12 months. This includes payments for educational or medical expenses, unemployment benefits, subsidy payments, or any kind of social benefits. It does not include a pension from the government, military, or public sector; wages; or any other payments related to work. received government transfers into an account (%): Refers to the percentage of respondents who reported personally receiving any financial support from the govern- ment in the past 12 months directly into a financial institution account, into a card, or into a mobile money account. received payments for agricultural products in cash only (%): Refers to the per- centage of respondents who reported personally receiving money from any source for the sale of agricultural products, crops, produce, or livestock in the past 12 months in cash only. received payments for agricultural products in the past year (%): Refers to the per- centage of respondents who reported personally receiving money from any source for the sale of agricultural products, crops, produce, or livestock in the past 12 months. received payments for agricultural products into an account (%): Refers to the per- centage of respondents who reported personally receiving money from any source for the sale of agricultural products, crops, produce, or livestock in the past 12 months directly into a financial institution account, into a card, or into a mobile money account. received payments from self- employment in cash only (%): Refers to the percentage of respondents who reported personally receiving money from their business, from selling goods, or from providing services (including part-time work) in the past 12 months in cash only. received payments from self- employment in the past year (%): Refers to the percent- age of respondents who reported personally receiving money from their business, from selling goods, or from providing services (including part-time work) in the past 12 months. received payments from self- employment into an account (%): Refers to the percent- age of respondents who reported personally receiving money from their business, from selling goods, or from providing services (including part-time work) in the past 12 months directly into a financial institution account, into a card, or into a mobile money account. G LO B A L F I N D E X G LO S S A R Y | 12 9 received private sector wages in cash only (%): Refers to the percentage of respon- dents who reported being employed in the private sector and receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work in cash only. received private sector wages in the past year (%): Refers to the percentage of respon- dents who reported being employed in the private sector and receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work. received private sector wages into an account (%): Refers to the percentage of respon- dents who reported being employed in the private sector and receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work directly into a financial institution account, into a card, or into a mobile money account. received public sector wages in the past year (%): Refers to the percentage of respon- dents who reported being employed by the government, military, or public sector and receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work. received wages in cash only (%): Refers to the percentage of respondents who reported receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work in cash only. received wages in the past year (%): Refers to the percentage of respondents who reported receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work. This does not include any money received directly from clients or customers. received wages into an account (%): Refers to the percentage of respondents who reported receiving any money from an employer in the past 12 months in the form of a salary or wages for doing work directly into a financial institution account, into a card, or into a mobile money account. saved any money in the past year (%): Refers to the percentage of respondents who reported personally saving or setting aside any money for any reason and using any mode of saving in the past 12 months. saved for old age (%): Refers to the percentage of respondents who reported saving or setting aside any money in the past 12 months for old age. saved formally (%): Refers to the percentage of respondents who reported saving or set- ting aside any money at a bank or another type of financial institution in the past 12 months. saved semiformally (%): Refers to the percentage of respondents who reported saving or setting aside any money in the past 12 months by using a savings club or a person outside the family. sent domestic remittances in the past year (%): Refers to the percentage of respon- dents who reported personally sending any of their money in the past 12 months to a rel- ative or friend living in a different area of their country. This can be money they brought themselves or sent in some other way. sent or received domestic remittances in cash only (%): Refers to the percentage of respondents who reported personally sending any of their money in the past 12 months to, 13 0 | F I N D E X 2 017 or receiving any of it from, a relative or friend living in a different area of their country in person, or through someone they know, and in cash only. sent or received domestic remittances in the past year (%): Refers to the percentage of respondents who reported personally sending any of their money in the past 12 months to, or receiving any of it from, a relative or friend living in a different area of their country. sent or received domestic remittances using an over-the-counter (OTC) service (%): Refers to the percentage of respondents who reported personally sending any of their money in the past 12 months to, or receiving any of it from, a relative or friend living in a different area of their country over the counter in a branch of their financial institution, through a mobile banking agent, or through a money transfer service. sent or received domestic remittances using an account (%): Refers to the percent- age of respondents who reported personally sending any of their money in the past 12 months to, or receiving any of it from, a relative or friend living in a different area of their country using a financial institution account or a mobile money account. used a credit card in the past year (%): Refers to the percentage of respondents who reported using their own credit card in the past 12 months. used a debit card to make a purchase in the past year (%): Refers to the percentage of respondents who reported using their own debit card directly to make a purchase in the past 12 months. used a mobile phone or the internet to access an account in the past year (%): Refers to the percentage of respondents who reported using a mobile phone or the inter- net to make a payment, to make a purchase, or to send or receive money through their financial institution account or through the use of a mobile money service in the past 12 months. used the internet to pay bills or to buy something online in the past year (%): Refers to the percentage of respondents who reported using the internet to pay bills or buy something online in the past 12 months. Notes 1. Data on adults with a financial institution account include respondents who reported having an account at a bank or at another type of financial institution, such as a credit union, a microfinance institution, a cooperative, or the post office (if applicable), or having a debit card in their own name. The data also include an additional 3.93 percent of respondents in 2017 who reported receiving wages, government transfers, a public sector pension (included in 2017 data), or payments for agricultural products into a financial institution account in the past 12 months; paying utility bills or school fees from a financial institution account in the past 12 months; or receiving wages or gov- ernment transfers into a card in the past 12 months. 2. Data on adults with a mobile money account include respondents who reported person- ally using services included in the GSM Association’s Mobile Money for the Unbanked (GSMA MMU) database to pay bills or to send or receive money in the past 12 months. The data also include an additional 0.60 percent of respondents in 2017 who reported receiving wages, government transfers, a public sector pension (included in 2017 data), or payments for agricultural products through a mobile phone in the past 12 months. G LO B A L F I N D E X G LO S S A R Y | 131 ECO - AU D I T Environmental Benefits Statement The World Bank Group is committed to reducing its environmental footprint. In support of this commitment, we leverage electronic publishing options and print- on-demand technology, which is located in regional hubs worldwide. Together, these initiatives enable print runs to be lowered and shipping distances decreased, resulting in reduced paper consumption, chemical use, greenhouse gas emissions, and waste. We follow the recommended standards for paper use set by the Green Press Initia- tive. The majority of our books are printed on Forest Stewardship Council (FSC)– certified paper, with nearly all containing 50–100 percent recycled content. The recycled fiber in our book paper is either unbleached or bleached using totally chlo- rine-free (TCF), processed chlorine–free (PCF), or enhanced elemental chlorine– free (EECF) processes. More information about the Bank’s environmental philosophy can be found at http://www.worldbank.org/corporateresponsibility.