c ia l
      n
    a s
 in s
F e                    2 009


 A c c
 Measuring Access to
 Financial Services
 around the Wo...
Copyright 2009 by the Consultative Group to Assist the Poor/The World Bank
MSN P 3-300, 1818 H Street, NW, Washington DC 2...
Table of contents

Acknowledgments                      vii

Overview                1


1    Measuring financial access
W...
Figures
     1      Developing countries have a third the deposits per person of developed countries             2
     2 ...
4.3 As branch networks expand, more rural branches open, and the ratio of rural branches to population
     catches up wit...
Acknowledgments

Financial Access 2009 was made possible by the generous contribution
of time, perspective, and assistance...
Overview

Financial inclusion—providing ac-      policymakers, researchers, practi-
cess to financial services for all—   ...
monitor progress. The first step is     relation to average income. Lower                 they address a binding constrain...
microenterprises is fairly new,                    official income records. By gener-        in consumer credit, seem to h...
Figure 3        Developing countries have narrower outreach


          Point-of-sale                                     ...
1 Measuring financial access

   To design effective policies and         for access.1 This report uses access
   track pr...
But it is difficult or impossible      quarterly by the regulator using a     Overall, however, using household
    to com...
There are often many types of                         organizations, specialized state fi-                 Commercial bank...
Cooperatives                                                can provide data on financial ac-          Specialized state
 ...
financial authority (figure 1.5).                            banks supervise microfinance in-                         inst...
risks, a focus on larger institutions   surveys, definitions of formal and     debt. Such aggregation is not pos-
     in ...
2 Savings and payments

   In most developed economies more         as given their transformation into
   than 90 percent ...
Seven countries have fewer than 100 deposit accounts in banks and
       Map 2.1          regulated nonbank financial inst...
2.7 billion (72 percent of adults) in           reported data on the number and       of accounts in nonbank institu-
deve...
Figure 2.2 Countries with higher poverty rates have the lowest account penetration

         Share of population living
  ...
decomposed into checking, savings,       million deposit accounts spread                    can become a significant playe...
Figure 2.5 Nonbank institutions—important in delivering deposit services

                    Burundi                     ...
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank
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Measuring Access To Financial Services Worldwide. Consultative Group to Assist the Poor/The World Bank

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Measuring Access to Financial Services Worldwide 2009. Consultative Group to Assist the Poor / The World Bank Report.

Financial Access 2009 was made possible by the generous contribution of time, perspective, and assistance by central bank officials in 139 countries who responded to the Financial Access Survey.

The report was prepared by the team led by Nataliya Mylenko under the general direction of Elizabeth L. Littlefield and Penelope J. Brook.

The team comprised Amrote Abdella, Hédia Arbi, Maximilien Heimann, Yehia Houry, Jake Kendall, Maria Mendez Cintron, Joana Pascual, Alejandro Ponce-Rodríguez, Valentina Saltane, and Anju Somani.

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  1. 1. c ia l n a s in s F e 2 009 A c c Measuring Access to Financial Services around the World
  2. 2. Copyright 2009 by the Consultative Group to Assist the Poor/The World Bank MSN P 3-300, 1818 H Street, NW, Washington DC 20433 USA All rights reserved Manufactured in the United States of America First printing September 2009 This volume is a product of the staff of the Consultative Group to Assist the Poor (CGAP), and the judg- ments herein do not necessarily reflect the views of CGAP’s Council of Governors or Executive Committee or the World Bank’s Board of Executive Directors or the countries they represent. CGAP and the World Bank do not guarantee the accuracy of the data included in this publication and ac- cept no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the CGAP or World Bank any judgment on the legal status of any territory or the endorsement or acceptance of such boundar- ies. This publication uses the Robinson projection for maps, which represents both area and shape reason- ably well for most of the earth’s surface. Nevertheless, some distortions of area, shape, distance, and direc- tion remain. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address in the copyright notice above. CGAP and the World Bank encourage dissemination of their work and will normally give permission promptly and, when repro- duction is for noncommercial purposes, without asking a fee. Permission to photocopy portions for class- room use is granted through the Copyright Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, MA 01923 USA. Editing, design, and layout by Bruce Ross-Larson, Christopher Trott, Joseph Caponio, and Elaine Wilson at Communications Development Incorporated, Washington, DC, and Peter Grundy Art & Design, London. If you have questions or comments about this product, please contact: CGAP MSN P 3-300 The World Bank Group 1818 H Street, NW Washington DC 20433 USA Phone: 202-473-9594 Fax: 202-522-3744 E-mail: cgap@worldbank.org Web: www.cgap.org/financialindicators
  3. 3. Table of contents Acknowledgments vii Overview 1 1 Measuring financial access What data are available from regulators? 6 Improving data collection for measuring access 9 Notes 10 2 Savings and payments Measuring access to deposit services 11 Policies to promote deposit account ownership 18 Notes 23 3 Credit Measuring access to credit 25 Policies to support access to credit 29 Notes 36 4 Delivering financial services Measuring outreach 37 Policies to improve banking outreach 40 Notes 48 Methodology 49 iii
  4. 4. Figures 1 Developing countries have a third the deposits per person of developed countries 2 2 Developing countries have a quarter of the loans per person of developed countries 3 3 Developing countries have narrower outreach 4 1.1 The main financial regulator supervises nonbank financial institutions in half the countries surveyed 7 1.2 Data are limited on the number of deposits and loans, especially for nonbanks 7 1.3 For cooperatives, few countries provide data on access 8 1.4 In almost half of countries specialized state financial institutions are regulated by the main bank regulator 9 1.5 In more than 40 percent of countries microfinance institutions are regulated by the main bank regulator 9 2.1 The majority of deposit accounts are in commercial banks, but nonbanks play a significant role as well 13 2.2 Countries with higher poverty rates have the lowest account penetration 14 2.3 In countries with higher incomes and greater availability of deposit services, average deposit size is smaller relative to average income 14 2.4 Average account size relative to income in nonbank institutions is lower than in commercial banks 15 2.5 Nonbank institutions—important in delivering deposit services 16 2.6 Income, deposit insurance, and population density correlate with deposit account penetration 17 2.7 Information requested as part of “know your customer” requirements 19 2.8 Only 20 countries promote basic accounts 20 2.9 Forty countries offer government-to-person payments through bank accounts 21 2.10 Availability of retail payment system and prevalence of government-to-person payments 22 2.11 Promoting savings schemes 23 3.1 Change in perceptions of access to credit is not correlated with a change in use of credit 26 3.2 In higher income countries loans to individuals account for a greater share of the total volume 27 3.3 Loan sizes are large relative to income in poorer countries, where there are few borrowers 28 3.4 Cooperatives, specialized state financial institutions, and microfinance institutions are an important source of credit in many countries 29 3.5 Loan sizes in cooperatives, some specialized state financial institutions, and microfinance institutions are smaller than in commercial banks 30 3.6 Countries with more comprehensive credit information systems have more bank loans to individuals 31 3.7 Private credit bureaus cover a broad range of regulated and unregulated credit providers 32 3.8 More countries use disclosure and not usury ceilings as the main consumer protection 32 3.9 The share of countries with requirements to disclose loan rates ranges from 50 percent in South Asia to 91 percent in high-income countries 33 3.10 Requirements to disclose effective interest rates are widespread 33 3.11 Interest rates are lower in countries with more competitive and less concentrated financial markets, but there is no relation to usury ceilings 35 4.1 Having more “touch points” is correlated with a greater deposit and loan penetration 38 4.2 There are fewer rural branches per rural resident in developing countries than in developed countries 39 iv Financial Access 2009
  5. 5. 4.3 As branch networks expand, more rural branches open, and the ratio of rural branches to population catches up with urban branches 39 4.4 Cooperatives, specialized state financial institutions, and microfinance institutions are widespread in rural areas 40 4.5 Better infrastructure and less corruption are associated with greater branch penetration 41 4.6 Countries requiring branch approval are also more likely to have additional restrictions on branch operations 42 4.7 Exceptions to the security requirements are not widespread 42 4.8 Requirements for branch approvals are associated with lower branch penetration 43 4.9 Africa and the Middle East have the most restrictive regulations for agent banking 44 4.10 Many countries permit only payment services by agents 44 4.11 What can agents do? 45 4.12 Customer acquisition is a key constraint for agents to improve financial inclusion 45 4.13 Credit approval by agents is widely restricted 46 4.14 Who provides financial services through the postal system? 46 4.15 Participation of private sector in provision of financial services through posts increases with income 47 4.16 Operation of private financial institutions through the postal system is associated with higher deposit penetration 47 Maps 2.1 Number of deposit accounts in banks and regulated nonbank financial institutions per 1,000 adults 12 3.1 The number of bank loans per 1,000 adults is correlated with economic development 27 4.1 Africa and South Asia have fewer than 10 bank branches per 100,000 adults 38 Tables Statistical tables S1 Financial access: commercial banks 54 S2 Financial access: cooperatives 57 S3 Financial access: specialized state financial institutions 59 S4 Financial access: microfinance institutions 61 Policy tables P1 Documentation required to open an account 62 P2 Policies to promote savings 65 P3 Transparency and consumer protection 68 P4 Branch banking regulations 71 P5 Using existing retail networks to provide financial services 74 References 77 Measuring Access to Financial Services around the World v
  6. 6. Acknowledgments Financial Access 2009 was made possible by the generous contribution of time, perspective, and assistance by central bank officials in 139 countries who responded to the Financial Access Survey. The report was prepared by the team led by Nataliya Mylenko under the general direction of Elizabeth L. Littlefield and Penelope J. Brook. The team comprised Amrote Abdella, Hédia Arbi, Maximilien Heimann, Yehia Houry, Jake Kendall, Maria Mendez Cintron, Joana Pascual, Alejandro Ponce-Rodríguez, Valentina Saltane, and Anju Somani. The report benefited from the review and comments by a panel of ex- perts, including Thorsten Beck, Juan Buchenau, Asli Demirgüç-Kunt, Hendrik Denker, Susanne Dorasil, Michael J. Fuchs, Maria Soledad Martinez Peria, Ignacio Mas, Kate McKee, Douglas Pearce, Mark Pickens, Rita Ramalho, Bikki Randhawa, Roberto R. Rocha, Richard Rosenberg, Peer Stein, Michael Tarazi, Jeanette Thomas, and Glenn Westley. Jonathan Morduch and David Porteous commented on the survey design. Simone di Castri, Denise Dias, Christoph Kneiding, Timothy Lyman, and Jim Rosenberg provided valuable comments. World Bank regional staff assisted in the data collection process and provided valuable guidance in the drafting of the report. Anna Nunan managed the publication process. vii
  7. 7. Overview Financial inclusion—providing ac- policymakers, researchers, practi- cess to financial services for all— tioners, and multilateral and bi- has gained prominence in the past lateral investors. few years as a policy objective for national policymakers, multilateral Measuring access— institutions, and others in the de- getting more and better velopment field. The United Na- data on regulated tions designated 2005 the In- financial institutions is a ternational Year of Microcredit, first major step adopting the goal of building in- clusive financial systems.1 To as- To guide monetary policy and sist policymakers in designing ef- monitor systemic risks, financial fective policies and tracking global regulators in all countries collect progress in financial inclusion, the information on the values of de- World Bank collected the first set posits and credit. But the Finan- of indicators of financial access cial Access Survey indicates that in countries around the world in fewer than 70 percent of coun- 20052 and updated these indicators tries collect information on the for selected countries in 2008.3 number of bank deposit accounts. And even fewer countries have in- Building on this work, Financial formation on regulated nonbank Access 2009 introduces new data institutions—only 30 percent of from a survey of financial regula- countries could provide informa- tors in 139 countries. It presents tion on the number of deposit ac- indicators of access to savings, counts in cooperatives, specialized credit, and payment services in state financial institutions, and banks and in regulated nonbank microfinance institutions. Data financial institutions—reviewing on the number of loans are even some policy initiatives that sup- more limited. port financial inclusion. As the first in an annual series docu- Policymakers need reliable in- menting access to financial ser- formation on access to financial vices around the world, it is in- services to design effective poli- tended for a broad audience of cies, set priorities for actions, and 1
  8. 8. monitor progress. The first step is relation to average income. Lower they address a binding constraint, to start regularly collecting a set income clients are served mainly be it cost or distance. Basic bank- of standardized indicators for all by nonbank financial institutions, ing aims to reduce the cost of us- regulated financial institutions including cooperatives, specialized ing savings accounts, but it has in a country. These indicators in- state financial institutions, and little effect if a bank branch is clude the number of deposit ac- deposit-taking microfinance insti- too far away and no other access counts and loans, the number of tutions, where average deposits are point is available nearby. Trans- deposit clients and borrowers, and smaller. Banks remain the main ferring government payments to the number of financial access holder of deposits worldwide, but deposit accounts can significantly points, such as branches, agents, in some countries nonbank deposit reduce the costs of delivering gov- and automated teller machines. service providers hold more depos- ernment transfers and increase ac- its than banks and serve a broader cess to deposit services. But such Regulators can facilitate data col- segment of the market. transfers require a developed retail lection by setting clear guidelines payment system and carefully de- for reporting key access data and Financial inclusion policies—such signed deposit service products to weighing the benefits of better as offering basic accounts, trans- improve access. To be effective, fi- data with the costs of compliance. ferring government payments to nancial inclusion policies should Similar to the approach for mon- individual accounts, and encour- be comprehensive, addressing the itoring systemic risks, a focus on aging saving through matched main barriers to financial inclu- larger institutions is justified, es- and tax-advantaged savings ac- sion that individuals face. pecially among nonbank financial counts—are concentrated in institutions, which often lack nec- high-income countries, far from Increasing access to essary systems to report the data. widespread. When implemented credit—consumer Where different regulators super- in developing countries, they usu- protection is key vise various types of financial in- ally work only if participating fi- stitutions, better coordination is nancial institutions see them as a Large-scale bank lending to in- needed to gather the data on access viable business proposition and if dividuals, small enterprises, and in the entire regulated system. Increasing access to Developing countries have a third the deposits Figure 1 per person of developed countries saving and payment services—policies successful only if Number of 1.77 bank deposits financial institutions are per adult 0.52 on board 0 0.5 1.0 1.5 2.0 Estimates in this report indicate Value of 76 bank deposits that there are as many bank de- (percent of GDP) 42 posit accounts as people in the Developed countries world today. But these accounts are Average Developing countries bank deposit 44 concentrated in developed econo- (percent of GDP 120 mies (figure 1). In poor countries per capita) few lower income people use bank 0 30 60 90 120 deposit accounts, reflected in the higher average account balances in Source: Financial Access database. 2 Financial Access 2009
  9. 9. microenterprises is fairly new, official income records. By gener- in consumer credit, seem to have Overview even in developed countries. Un- ating information that helps lend- limited effect but require further regulated lenders and regulated ers assess risk and allocate credit analysis. nonbank financial institutions re- more efficiently, comprehensive main a major credit provider in credit registries contribute to the Extending the reach of many countries, though the lack development of credit markets. financial services— of data makes precise estimates As more people enter the finan- new technologies difficult. Based on available bank cial system and credit products and simplified branch data, there are nearly four times become more complex, rules and regulations hold more loans per adult in devel- regulations to protect consumers promise oped countries than in develop- and overcome information and ing countries (figure 2). As with power imbalances need to be put Bringing financial services to ru- deposit services, banks cater to in place. ral clients is the biggest challenge richer clients, reflected in higher in the quest for broad-based fi- ratios of average loan size to av- This report reviews three inter- nancial inclusion (figure 3). Of- erage income. Regulated non- ventions: disclosure requirements, ten the main barrier to finan- bank financial institutions cater interest rate caps, and methods to cial inclusion in rural areas is the to poorer clients than banks and address excessive lending that can great distances that rural resi- provide smaller loans. In some result in consumer overindebted- dents must travel to reach a bank countries nonbank financial insti- ness. Improved transparency and branch. Poor infrastructure and tutions evolve into dominant reg- disclosure allow borrowers to telecommunications, and heavy ulated credit providers. make informed choices and can branch regulation, also restrict facilitate competition in finan- the geographical expansion of Lending to individuals and small cial markets, eventually leading to bank branch networks. In many entrepreneurs requires processing lower prices and improved prod- developing countries there are many small loans to people who ucts. Policies to restrict interest fewer bank branches per rural generally lack a credit history or rates or credit quantity, especially resident than per urban resident. Nonbank financial institutions help fill this gap, with half the Developing countries have a quarter of the Figure 2 countries reporting more non- loans per person of developed countries bank branches per rural resident than bank branches. Number of bank loans 0.82 to individuals 0.22 Better geographic outreach can per adult remove distance as a barrier to 0.0 0 0.2 0.4 0.6 0.8 1.0 financial access for both lend- Value of 37 ers and borrowers, perhaps al- bank loans to individuals 13 lowing banks to be more respon- (percent of GDP) Developed countries sive and less intimidating to their Average bank loan Developing countries customers. to individuals 53 (percent of GDP 128 per capita) Simplifying the branch approval 0 30 60 90 120 150 process can facilitate geographi- cal expansion of branches. But Source: Financial Access database. the cost of building physical Measuring Access to Financial Services around the World 3
  10. 10. Figure 3 Developing countries have narrower outreach Point-of-sale 2,088 terminals per 100,000 adults 170 0 500 1,000 1,500 2,000 2,500 Automated teller 78 machines per 100,000 adults 23 Branches per 24 Developed countries 100,000 adults 8 Developing countries 0 20 40 60 80 100 Source: Financial Access database. infrastructure or the combination improving access to financial ser- of low income and low population vices, especially in poor and re- density may make some areas un- mote areas. profitable as branch locations. Al- lowing banks to operate through Notes agents, including partnerships with postal networks and retail- 1. UNCDF 2006. ers, reduces the fixed costs asso- 2. Beck, Demirgüç-Kunt, and ciated with geographical expan- Martinez Peria 2007. sion and holds great promise for 3. World Bank 2008a. 4 Financial Access 2009
  11. 11. 1 Measuring financial access To design effective policies and for access.1 This report uses access track progress policymakers need and use interchangeably. to measure financial access. While a growing number of countries What are the best indicators of fi- collect data on the availability and nancial access? In a perfect world use of financial services, there is they would be the numbers of no consistent set of global finan- people, households, and firms sav- cial access indicators to allow com- ing, receiving credit, making pay- parison across countries and over ments, and using other financial time. Building on earlier work by products from various sources, the World Bank, this report pres- both formal and informal. These ents the most recent and compre- indicators would allow a break- hensive set of global financial ac- down by income, firm size, and cess indicators collected through a location. And if they were col- regulator survey in 139 countries. lected regularly using a consistent The first in an annual series, it dis- methodology, they could be com- cusses the challenges in collecting pared across countries and time. comprehensive global indicators But such global indicators do not and describes the access to finan- exist today. cial services in countries around the world. For several countries some ac- cess indicators are available from A basic challenge in measuring fi- country-level household and en- nancial access is differentiating terprise surveys. These surveys between the access to and use of fi- provide a wealth of information on nancial services. Individuals may household and firm behavior and choose not to open a bank account are indispensible for setting and or to borrow even if these services evaluating policies for improving are available, reducing use relative access to finance at a national or to access. Such voluntary exclusion subnational level. Indeed, a grow- is difficult to measure, however, ing number of countries imple- because it is not directly observ- ment national household surveys able. So, researchers rely on indi- that now include questions about cators of use as an approximation financial access. 5
  12. 12. But it is difficult or impossible quarterly by the regulator using a Overall, however, using household to compare survey results across consistent methodology and can surveys in combination with regu- countries because of differences in be cross-checked with other da- latory data can improve data con- questions and methods.2 There are tabases available to the regulator, sistency and quality. By system- other limitations as well. Most na- such as credit registries. Second, atically collecting regulatory data tional surveys are not conducted it is not subject to potential sam- using a consistent methodology, regularly and may not be compa- pling biases, because data collec- regulators can routinely monitor rable from year to year, because tion through standard reporting developments in financial access. questions and household samples covers the entire regulated fi- Harmonizing the methodology change over time. Household sur- nancial system. Third, regulators for key financial access indicators veys are costly, often requiring gather data on actual financial would also allow for a more pre- interviewers to travel across the obligations, reducing potential cise international comparison and country to collect the data. They inaccuracies related to mistakes analysis. can take a year or more to im- and omissions by survey respon- plement. And there are concerns dents. Fourth, the cost of collect- about sampling and the represen- ing such data is relatively small tativeness of results, especially in because it leverages existing data What data are large countries. collection processes. The basic fi- nancial access indicators are fairly available from An alternative is to collect infor- easy to compute and report for regulators? mation on the use of financial ser- institutions using standard infor- vices through regular reporting by mation systems. Modern financial systems are financial institutions to the finan- complex, featuring great variety in cial regulator, so-called supply- But supply-side data have limita- regulated and unregulated finan- side data. Many financial regu- tions. They cover only the regu- cial service providers. Few coun- lators collect information on the lated financial system, excluding tries have a single central super- number of deposit accounts and informal financial services, which visor or coordinating entity for the number of loans. Closely cor- can have a larger number of cli- all financial institutions. But the related with the data from house- ents, especially in low-income main financial authority, usually a hold surveys,3 such data can be countries. In addition, the num- central bank or bank supervisory a good basis for indicators of ac- ber of accounts in the financial agency, regulates nonbank finan- cess to financial services. Indeed, system often overstates the num- cial institutions along with banks a growing number of countries ber of account holders by a fac- in about half the world’s countries collect these data regularly as part tor of two or more due to multiple (figure 1.1). The Financial Access of standard reporting. This is the accounts. Even in countries that Survey collected information on approach used in this and earlier count the number of depositors a broad range of regulated finan- World Bank reports.4 and borrowers, it is usually impos- cial institutions in 139 countries sible to avoid double-counting in- through a questionnaire to the There are several advantages to dividuals with accounts and loans main financial regulator, such as a using data collected by regula- in multiple institutions5 or count- central bank or a bank supervisory tors as a basis for global finan- ing a large number of dormant ac- agency. When possible, the main cial access indicators. First, the counts. Moreover, many regula- financial supervisor also provided approach helps ensure data con- tors do not collect financial access the data on regulated nonbank fi- sistency over time because the data, or do so only on an ad hoc nancial institutions supervised by data are collected monthly or basis. other agencies in the country. 6 Financial Access 2009
  13. 13. There are often many types of organizations, specialized state fi- Commercial banks regulated financial institutions nancial institutions, and micro- in a country. To facilitate inter- finance institutions. It collected The Financial Access Survey indi- national comparison, the survey information on selected financial cates that the data on use of finan- asked regulators to provide data inclusion policies and statistics on cial services are not always avail- grouped in four broad types of regulated institutions: banks (in- cluding state-owned banks), coop- the number of deposit and loan accounts, the number of deposi- tors and borrowers, and the value able, even for banks, and much less for regulated nonbank finan- cial institutions. Data on values 1 Measuring financial access eratives and other member-owned of deposits and loans (figure 1.2).6 of loans and deposits in commer- cial banks are the most compre- hensive, available for more than Figure 1.1 The main institutions in half the countries surveyed financial regulator supervises nonbank 90 percent of countries (see fig- financial ure 1.2). This information, part of standard reporting, collected from Commercial bank balance sheets, is used to 100.0 banks monitor systemic risks and guide monetary policy—the core objec- Cooperatives 57.7 tive of a central bank. Information on the number of deposits is col- Specialized state nancial institutions 48.1 lected in only 64 percent of coun- tries, and that on loans in only Micro nance 43.8 50 percent. Developing countries institutions collect these data more often than 0 20 40 60 80 100 developed countries do.7 Share of reporting countries (percent) The best indicator for measuring Source: Financial Access database. access to financial services is the number of depositors and borrow- ers. But only about 20 percent of Figure 1.2 Dataloans, especially for nonbanks are limited on the number of deposits countries surveyed have data on and the number of depositors or the Number of countries number of borrowers. Even when 150 Supervision of institutional type Data on number of collected, the data for the total Data on value of deposits individual depositors Data on number of deposit accounts Data on number of number of depositors double- 120 Data on value of loans individual borrowers counts those with accounts in Data on number of loans multiple banks. For credit the 90 double-counting can be solved by extracting data from credit regis- 60 tries, where available. Credit reg- istries that merge information at 30 the loan level to provide the con- solidated debt for each borrower 0 Commercial banks Cooperatives Specialized state Micro nance can provide the total number of nancial institutions institutions unique borrowers and their re- Source: Financial Access database. spective debt. Measuring Access to Financial Services around the World 7
  14. 14. Cooperatives can provide data on financial ac- Specialized state cess (see figure 1.2). Where they financial institutions Financial cooperatives, an impor- are supervised by the main finan- tant provider of financial services cial regulator, fewer than 60 per- Specialized state financial insti- around the world, are regulated cent have data on the values of de- tutions operate in more than 60 by a financial regulator in only posits and loans, and just a third percent of the countries surveyed half the countries surveyed (figure on the number of accounts and and range from non-deposit- 1.3). In the other half they are ei- loans. The significant difference taking wholesale lending facilities ther not regulated (25 percent) or in data availability by region re- to nonlending postal banks. In are regulated by other ministries flects varying levels of sophistica- 48 percent of these countries the (17 percent), such as ministries of tion among cooperatives. Latin main bank regulator supervises cooperatives. These ministries su- America has the best data cover- specialized state financial institu- pervise all types of cooperatives, age, with 80 percent of countries tions (figure 1.4). In 14 percent and few have the capacity to su- collecting data on values and 60 these institutions are supervised pervise all of them. In developed percent on numbers of loans and by other government agencies, countries financial cooperatives deposits. In Sub-Saharan Africa such as ministries of finance for evolved into mainstream finan- only 3 of 15 countries where the development banks and ministries cial institutions, and regulators financial authority regulates co- of post and communications for seldom differentiate between the operatives had data on numbers postal banks. Even though spe- supervision of cooperatives and of deposits and loans. Many coop- cialized state financial institutions banks. In 76 percent of high- eratives are small, some struggle are an important provider of ser- income countries the bank regu- with basic accounting, and few vices, very few countries can pro- lator also supervises cooperatives, have a management information vide data on the outreach of these compared with 53 percent in de- system. It may not be possible to institutions (see figure 1.2). veloping countries. collect comprehensive data on all cooperatives, but many large co- Microfinance institutions Even where financial coopera- operatives in most countries can tives are regulated, few countries provide data. A specific challenge in measuring microfinance is that it is defined not by the type of institution but Figure 1.3 For cooperatives, few countries provide data on access by the market segment served. For example, many cooperatives op- erate in rural and poor areas and Not regulated Regulated by a provide microfinance services. 25% bank regulator only In some countries banks enter the space traditionally served by 42% microfinance, such as ICICI in India, Equity Bank in Kenya, and 17% BRI in Indonesia. Regulated by other regulator only 16% In 57 countries microfinance in- stitutions, usually deposit-taking, Regulated by botha are defined for regulation pur- Note: Data are for 130 countries. a. Multiple types of cooperatives exist, some regulated by different regulatory bodies. poses as a separate institutional Source: Financial Access database. type and regulated by the main 8 Financial Access 2009
  15. 15. financial authority (figure 1.5). banks supervise microfinance in- institutions than for other regu- In at least 10 countries multiple stitutions in 80 percent of coun- lated institutions. Only a third of forms of microfinance institu- tries.8 Fewer than 10 percent of countries had data on the number tions exist, with at least one form high-income countries regulate or of loans. Given the social focus regulated by another authority, even have microfinance institu- of most microfinance institutions such as the ministry of finance. Microfinance institutions are su- pervised by the main financial tions as a category within the reg- ulatory framework. and their objective to improve outreach, they usually monitor the numbers of their borrowers 1 Measuring financial access authority in more than 40 per- Data on the number and value and savers, as demonstrated by cent of developing countries. An of loans and deposits are much their self-reporting of such data to exception is Africa, where central less available for microfinance the Microfinance Information Ex- change. Asking microfinance in- stitutions to routinely report these Figure 1.4 In almost half ofregulated by the main bank regulator countries specialized state financial data to the regulator could be institutions are valuable for monitoring access to financial services for the poor. But Regulated by a as for cooperatives, the regulator’s bank regulator only ability to collect comprehensive 41% data on microfinance institutions Not regulated 38% is constrained by limited resources and capacity. 14% 7% Regulated by other regulator only Regulated by botha Improving data Note: Data are for 129 countries. collection for measuring a. Multiple types of specialized state financial institutions exist, some regulated by different regulatory bodies. Source: Financial Access database. access Figure 1.5 In more than 40 regulated by the mainmicrofinance percent of countries institutions are bank regulator There is no substitute for reliable data. Collecting country informa- Regulated by a tion on the use of financial ser- bank regulator only vices is essential to track progress 35% and set priorities for action for na- Not regulated 48% tional and international bodies. Regulators can facilitate data col- lection by setting clear guidelines 9% for reporting key financial access 8% Regulated by botha data and by weighing the ben- efits of better data with the costs Regulated by other regulator only of compliance for different finan- Note: Data are for 130 countries. a. Multiple types of microfinance institutions exist, some regulated by different regulatory bodies. cial institutions. Similar to the ap- Source: Financial Access database. proach for monitoring systemic Measuring Access to Financial Services around the World 9
  16. 16. risks, a focus on larger institutions surveys, definitions of formal and debt. Such aggregation is not pos- in terms of the number of clients informal financial institutions, sible for deposits, because informa- is justified, especially among non- and availability and use of service. tion on deposits in most countries bank financial institutions, which For an in-depth discussion, see is protected by strong bank secrecy often lack systems to report the Barr, Kumar, and Litan (2007). provisions, making it impossible to data. Where different regulators 3. Demirgüç-Kunt, Beck, and collect data on individual deposits supervise various types of financial Honohan 2008. and deposit holders. institutions, better coordination is 4. Beck, Demirgüç-Kunt, and 6. See methodology appendix needed to gather the data on access Martinez Peria 2007; World Bank for more detail. in the entire regulated system. 2008a. 7. This is due in part to the fact 5. For credit this problem can that the financial systems in many be solved by extracting data from developing countries are smaller credit registries. A credit registry and regulators are able to obtain Notes merges information at the loan necessary data on an ad hoc basis level to provide the consolidated when requested. 1. Barr, Kumar, and Litan 2007. debt for each borrower and can 8. Member countries of the Cen- 2. Some of the differences in- provide the total number of unique tral Bank of West African States clude household and individual borrowers and their respective did not respond to the survey. 10 Financial Access 2009
  17. 17. 2 Savings and payments In most developed economies more as given their transformation into than 90 percent of households use deposit-taking institutions. And bank accounts to save and to make many governments and financial payments.1 The ubiquity of such regulators have placed financial services speaks to their critical role inclusion somewhere on their list in daily life. But where they are of priorities, some nearer the top not available, as in many poorer than the bottom. countries around the world, indi- viduals are denied a basic service and forced to rely on informal sav- ings and payment techniques that Measuring may be of inferior security, liquid- ity, and return. Recent research access to shows that low-income entrepre- deposit services neurs given access to a formal bank account invest more in their The most appropriate measure of businesses, consume more, and are the use of deposit services is the less prone to sell business assets to number of unique depositors in a deal with health emergencies.2 country. But few regulators have these data. This report uses the Despite many challenges, there are number of deposit accounts per promising signs that the poor can 1,000 adults, including saving, profitably be offered savings and checking, and time, as the proxy payments services in great num- measure for access to financial bers. Perhaps most promising are services (map 2.1).3 the developments in branchless banking—the use of innovative Rates of deposit account owner- technologies (such as smart cards ship in formal institutions vary and mobile phones), coupled with greatly around the world. Of the the use of nonbank agents, to pro- seven countries that have fewer vide banking services to areas pre- than 100 bank accounts per viously difficult to serve profitably. 1,000 adults, five are in Africa— In addition, many microfinance Burundi, Democratic Republic institutions have begun to take of Congo, Ethiopia, Madagascar, 11
  18. 18. Seven countries have fewer than 100 deposit accounts in banks and Map 2.1 regulated nonbank financial institutions per 1,000 adults Deposit accounts per 1,000 adults 500.0 or fewer 500.1–1,000.0 1,000.1–2,000.0 2,000.1 or more No data Note: Estimates for countries that did not report the number of accounts in commercial banks were generated from a statistical model that uses income per capita and vari- ous features of the financial system—such as the number of bank branches per 100,000 adults and the value of deposits per adult—to predict the number of commercial bank accounts. Where the number of accounts in nonbanks was not reported, an attempt was made to fill in data from other sources. The estimates for bank and nonbank categories were summed by country to estimate the total number of deposit accounts in each country. See the methodology appendix for more details. Source: Financial Access database. and Mauritania. High-income accounts in commercial banks How many people use the formal countries exhibit the greatest de- per 1,000 adults.5 Higher rates financial system? Regulators do not posit penetration, with an average of bank account ownership thus have data on the number of unique of more than 2,000 accounts per equate to more banked individu- depositors, but a rough estimate is 1,000 adults. als in the population. possible by combining information on the number of accounts from Underlying the wide variation in There are more deposit the Financial Access Survey with rates of account ownership are accounts than adults in the data from recent comparable large differences in poor house- the world, concentrated household surveys. Data on the to- holds’ access to formal savings. In in the rich countries tal number of adults with a bank recent household surveys Malawi, account come from 17 compara- Pakistan, Rwanda, and Uganda4 Adding all the predicted and re- ble household surveys conducted all reported fewer than 20 per- ported values puts the global in both developing and developed cent of households saving through number of bank and nonbank ac- countries since 2003. Dividing the formal institutions, and Financial counts at approximately 6.2 bil- reported numbers of bank accounts Access Survey data show them lion, or more than one for each in these countries by the number to have fewer than 225 bank ac- adult on the planet.6 While there of adults with an account gives the counts per 1,000 adults. In con- are more than enough accounts to number of accounts per banked trast, the European Commission go around, they are not distrib- adult—estimated between 2.2 and calculates that in Belgium and uted equally. In developed coun- 3.8.8 Assuming three accounts the Netherlands more than 98 tries there are an estimated 3.2 per banked adult on average puts percent of households have bank accounts per adult, but in devel- the number of unbanked adults at accounts, and survey data show oping countries, less than than about 160 million (19 percent of them to have more than 1,500 0.9 account per adult.7 adults) in developed countries and 12 Financial Access 2009
  19. 19. 2.7 billion (72 percent of adults) in reported data on the number and of accounts in nonbank institu- developing countries.9 value of deposits, even when regu- tions likely is more conservative lated by the main financial author- than the one for banks, understat- Banks are the main providers of ity, which makes robust statistical ing the true size of the nonbank deposit services, holding more estimates difficult. The estimates deposit-taking sector. than 80 percent of all deposit ac- here include only the number of counts (figure 2.1). At least 20 accounts for countries that re- In developed countries nearly 19 percent of accounts are held out- ported the number of accounts percent of accounts are held with side commercial banks in coop- in the survey or where additional cooperatives, credit unions, and eratives, specialized state finan- cial institutions, and microfinance institutions. This estimated ratio data sources were available. Even where data were reported, they are not always complete because not other institutions with a mutual ownership structure, four times the estimated 5 percent in devel- 2 likely understates the true cover- all institutions report to the reg- Savings and payments oping countries (though, again, age of nonbanks, especially in de- ulator. Due to these data limita- the true share of cooperatives in veloping countries. Few countries tions, the estimate of the number developing countries is likely to be underestimated). Public insti- tutions such as postal banks and Figure 2.1 The majority of deposit accounts are in role as well commercial specialized state financial institu- banks, but nonbanks play a significant tions are also important provid- Developing countries ers of savings services in develop- ing countries, holding 12 percent Micro nance institutions 1% Specialized state of total deposits. Microfinance nancial institutions 12% institutions, as a separate regu- Cooperatives lated type of institution, hold only 5% about 1 percent of deposits, con- centrated in developing countries. As a rule, bank accounts 82% Commercial banks are for the well off, with exceptions Financial access is not a problem for Developed countries the rich, even in poorer countries. Specialized state nancial institutions 1% Countries with the highest num- bers of households below the inter- Cooperatives national poverty line often have the 19% lowest deposit account penetration (figure 2.2). Their banking sectors target mainly the richest inhabit- ants, leaving the more numerous poor with few options. Worldwide, 80% Commercial banks an “access gap” excludes the world’s poorest from the formal financial sector, leaving the majority of ac- Source: Financial Access database. counts owned by the rich. Measuring Access to Financial Services around the World 13
  20. 20. Figure 2.2 Countries with higher poverty rates have the lowest account penetration Share of population living on less than $2 a day (percent) Deposit accounts per 100 adults 100 250 80 200 60 150 40 100 20 50 0 0 M Z run a ad am di R as a ba da ng a, T e la he Ne sh Ni I pal ra ia oz G gua E biq a Ca thio ue b a M ala ia P g i M aki olia rit an Sa en a In lva ya Ph m ka Ar an ia Ho ppi ia Ec dur s ua as em ru Pa Bol la Ve T rag ivia la d yz M , RB Co pu co Sw lomblic Pa ilana Bunamd l a o ia M ger a or ia Ky zue ilan y m co ba a M C ia Az ala hile ba ia Jo ijan Tu dan n ia nd la y Zi wa car Sr one or Gu dor on w ne ha ua Pogar n ne Bu and i Ba bi bw n m pi El K ani az bi Al rgi Al aic ag b ca nd M od iL s ili en Gegar n er ys Hu nis a d d at Pe Re exi Ja oc m n de am ha au st r Ug m Ga M rg Source: Financial Access database. Does higher account penetra- tion translate into more access In countries with higher incomes and greater for the poor? In the absence of Figure 2.3 availability of deposit services, average deposit direct data on incomes, average size is smaller relative to average income deposit size gives a rough proxy Deposit accounts in commercial banks per 1,000 adults for the average income of the ac- 6,000 count holders.10 Banks usually reach high-income clients before 5,000 they reach poor ones. When fi- 4,000 nancial access improves and more people use banking services, the 3,000 new clients tend on average to 2,000 be poorer than the existing ones, and thus to hold smaller accounts 1,000 (figure 2.3). For countries with 0 higher incomes and greater de- posit penetration, the ratio of ac- 0 5,000 10,000 15,000 20,000 GDP per capita (2007 $) count size relative to income is lower. The average deposit ac- Note: Circle diameter indicates the average size of deposit accounts in the country. Source: Financial Access database. count in commercial banks in developing countries holds funds The average yearly income is For countries with similar incomes, worth more than twice the aver- $224, one-twenty-fourth the av- there is still a strong relationship age yearly income in those coun- erage Congolese account balance between deeper account penetra- tries. In Democratic Republic of of $5,200. Very few Congolese tion and smaller average balances Congo, for instance, there are hold accounts, and the few who relative to income. This relationship only 6 accounts per 1,000 adults. do are wealthy. also holds when bank accounts are 14 Financial Access 2009
  21. 21. decomposed into checking, savings, million deposit accounts spread can become a significant player. and time accounts. Based on these over 155,000 post offices.11 In Bolivia, Ethiopia, and Mada- facts, it seems that in countries with gascar microfinance institutions higher bank deposit penetration, a When microfinance institutions claim nearly half the number of higher proportion of lower income are allowed to take deposits, they deposit accounts as the banking individuals have access. Figure 2.4 Average account size relative to income banks Nonbank suppliers of in nonbank institutions is lower than in commercial deposit services reach poorer clients If not from commercial banks, Average deposit account size ratio, cooperatives to commercial banks 4.0 3.5 2 3.0 where do lower income households Savings and payments 2.5 get their deposit services? The users 2.0 of deposit services in cooperatives, 1.5 specialized state financial institu- 1.0 0.5 tions, and deposit-taking micro- 0.0 finance institutions tend to have . i al p. La ia Ph H via pp ti ua s to ia a o Es nda u ia ca ite om a St a Sp es Po ain nd or a Au cco Gr tria Ge ece Ar lvad a a m y , C ly Pu Bo or ge or m nd Ja gua Ec ine Rw Ric Un Col Indi d bi M hin i in ili ai an Ita s er liv Ur ton Sa rg M Re d ai at la t ay nt De ru o s e El o smaller balances than do those us- o, Bu iw ing commercial banks within the Ta ng Co same country (figure 2.4). One in- Average deposit account size ratio, terpretation is that the clients of specialized state nancial institutions to commercial banks these nonbank providers, making 1.2 smaller size deposits, are on average 1.0 poorer than customers at commer- 0.8 cial banks within the same country. 0.6 0.4 Many nonbank financial institu- 0.2 tions cater to poorer clients, but 0.0 what is the scope for their serving Mo an Le co o ile Za o Ma bia Sw ysia Tu d ia dia h ru an ndi ilip a es n g or th xic Ph hin n es nis Ba uad Pe c pin Ch ist ila large numbers of clients? While m In Ta Buru so ro lad la Me ,C k az Ec Pa banks dominate deposit mar- iw kets in most countries, in 7 of 48 Average deposit account size ratio, countries with data, nonbank fi- micro nance institutions to commercial banks 1.2 3.69 nancial institutions hold more 1.0 deposits than banks (figure 2.5). 0.8 In Spain cooperatives have more than twice the deposit accounts 0.6 held in the Spanish commercial 0.4 banking sector. Chile and India 0.2 both have very large postal bank- 0.0 ing networks. In India, the state- Pa ia ad tan es Ug a Bu a Rw i Ni nda a Ec ia a ico ru a r Pa r nd Ph sca do i d gu m bi d op liv Pe in an ex bo m ru s na ua a ra Bo pp hi ki a Za M m ag run postal bank, Indiapost, is one ca Et ili Ca M of the world’s broadest depository institutions, with more than 172 Source: Financial Access database. Measuring Access to Financial Services around the World 15
  22. 22. Figure 2.5 Nonbank institutions—important in delivering deposit services Burundi Commercial banks Zimbabwe Cooperatives Congo, Dem. Rep. Specialized state nancial institutions Ethiopia Micro nance institutions Rwanda Mozambique Uganda Madagascar Gambia, The Bangladesh Cambodia Lesotho Pakistan Zambia Yemen, Rep. Nicaragua India Bolivia Philippines Syrian Arab Republic Georgia Morocco Swaziland El Salvador Ecuador Tunisia Colombia Peru Jamaica Panama Botswana Argentina Malaysia Uruguay Mexico Chile Poland Latvia Estonia Czech Republic Puerto Rico Spain Greece Italy Austria United States 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Deposit accounts per 1,000 adults Note: This figure does not represent the totality of the financial system and corresponds solely to the aggregation of data for different institutional categories, when available. Not all countries provided information on every institution type. Countries are listed in ascending order of income per capita. Source: Financial Access database. sector. In Bolivia, the Philippines, number of clients served by these by a broad set of factors including and Rwanda they have roughly institutions in some countries also overall level of economic develop- three-quarters of the number highlights the need for proper su- ment, trust in the financial sys- of deposit accounts of the regu- pervision and regulation. tem, distance, and competition. lated cooperative sector.12 Under Cross-country analysis using data the right circumstances nonbank Features of countries for countries with information on deposit-taking institutions, in- with higher account the number of bank deposit ac- cluding cooperatives, specialized penetration counts shows a strong correlation state financial institutions, and between bank deposit account microfinance institutions, could The availability of deposit ser- penetration and income per cap- reach many poor clients. The large vices in a country is influenced ita (figure 2.6). This relationship 16 Financial Access 2009

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