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Transcript of Data on Access to and Use of Financial Services: Regulator and Bank Surveys Asli Demirguc-Kunt DECRG...
Data on Access to and Use of Financial Services: Regulator and Bank Surveys
Asli Demirguc-Kunt DECRG
WB- Brookings Conference on Access to Finance May 30, 2006
Why are we interested in access?
• An extensive literature exists on the links between financial development and growth
• Little, however, on the degree and impact of access to financial services.
• This deficiency is due to lack of data and analysis – Current financial sector indicators are good in
measuring size but not the reach and breadth– Most analyses have focused on determinants and
impact of overall financial sector development
Why would access matter for the outcomes we care about?
• Firms’ access to financial services – Matters because of the impact on growth, and
especially of small and new firms (entry)– To date: ICA and other firm level data
• Households’ access to financial services– Matters because of poverty reduction, risk
mitigation, more voice and inclusion– To date: some data from existing LSMS and
some specialized households surveys
Data Collection Efforts
• Regulator surveys – over 115 countries– Number of branches and ATMs relative to population and area– Number of loans and deposit accounts relative to population– Average size of loans and deposits relative to GDP per capita
• Bank (provider) surveys -530 commercial banks (5 largest) in 106 countries
– Developing indicators of barriers to banking by collecting data on minimum deposit balances, deposit and loan fees, requirements to open a bank account and apply for a bank loan, cost of electronic transfers, etc.
• Household surveys – Pulling together existing data– Going forward – coordinating and designing core set of indicators
to include in HH surveys going forward
All complementary efforts to get a full picture of access
Defining “access” is not easy…
Access vs. Usage • Usage is much easier to measure• However, access is likely to be wider – some may
have access, yet may not wish to use services• Understanding usage requires information on both
demand and supply• Thus need to collect indicators that measure both:
– Actual use of various services (savings, payment, credit)
– Barriers to access, to identify boundaries and causes of exclusion
Access and Use - Regulator Surveys
Over the past year, through surveys of bank regulators – 115 countries were targeted and data on 99 were collected, cleaned and analyzed
• Access to financial services – Branch and ATM penetration, both geographic and demographic
• Actual use of financial services – Number of loans and deposits relative to population; Average size of loans and deposits relative to GDP per capita
• Results show large differences in usage, with developing countries far behind and much more skewed patterns of use
Branches per 100,000 people
0.531.331.532.244.174.414.475.365.996.306.397.638.178.448.509.399.809.98
11.9214.59
30.0830.86
45.6052.07
95.87
10.01
UgandaChina
BoliviaRussia
PeruVenezuela
NamibiaSaudi ArabiaSouth Africa
IndiaUruguay
MexicoPoland
IndonesiaTurkey
ChileMalaysia
JapanArgentinaMauritius
BrazilMalta
United StatesCanada
ItalySpain
Percentile 75
Percentile 50
Percentile 25
Percentile 5
Percentile 95
Loans Per 1000 People
4.38
9.53
47.45
49.59
54.11
54.73
77.92
80.74
93.04
207.13
264.51
328.97
407.21
417.74
556.48
773.87
154.19
Madagascar
Bolivia
Saudi Arabia
Brazil
Russia
Bangladesh
Peru
Namibia
Venezuela
Argentina
Mauritius
Turkey
Malaysia
Malta
Chile
Spain
Poland
Percentile 75
Percentile 50
Percentile 25
Percentile 5
Percentile 95
Deposits per 1000 People
14.46
40.63
214.13
228.75
309.57
316.19
422.96
486.74
630.86
975.64
1,044.82
1,114.23
1,250.10
1,585.99
1,892.28
2,075.96
2,495.81
2,706.07
368.73
Madagascar
Bolivia
Saudi Arabia
Bangladesh
Mexico
Peru
Argentina
Namibia
Venezuela
Brazil
Italy
Chile
Turkey
Malaysia
Mauritius
Russia
Spain
Malta
Denmark
Percentile 75
Percentile 50
Percentile 25
Percentile 5
Percentile 95
Average Loan Size/GDP per Capita
0.33
0.65
1.02
1.60
1.91
2.35
2.45
2.75
2.95
4.23
5.16
6.18
6.24
7.73
10.74
14.26
18.35
27.89
1.77
Poland
Turkey
Venezuela
Chile
Argentina
Spain
Italy
Peru
Mauritius
Malaysia
Russia
Namibia
Brazil
Malta
Saudi Arabia
Uganda
Pakistan
Madagascar
Bolivia
Percentile 75
Percentile 50
Percentile 25
Percentile 5
Percentile 95
Deposit Size/GDP per Capita
0.07
0.10
0.25
0.26
0.35
0.40
0.44
0.46
0.46
0.68
0.92
1.22
1.27
1.60
2.28
3.93
5.81
7.98
9.31
0.58
Russia
Dominican Republic
Romania
Bulgaria
Trinidad and Tobago
Brazil
Spain
Mexico
Chile
Argentina
Turkey
Malaysia
Malta
Namibia
Bangladesh
Saudi Arabia
Uganda
Bolivia
Zimbabwe
Madagascar
Percentile 75
Percentile 50
Percentile 25
Percentile 5
Percentile 95
Using regulator data we see…
• In the absence of household and firm level data we can predict household and firm use of financial services using these indicators
• better outreach is correlated with greater financial sector depth, greater banking freedoms, better governance, better physical infrastructure and with more private bank ownership.
• firms report facing lower financing constraints in countries with better outreach even controlling for depth.
Barriers to Access - Bank surveysBanks - Surveys of 530 commercial banks (5 largest) in 106
countries – Factors banks consider when deciding where to locate a
branch or ATM.– Documentation requirements to open accounts.– Minimum balance requirements, account fees, restrictions for
different types of deposit accounts.– Interest rates on deposit accounts.– Loan application procedures and documentation.– Loan fees, interest rates, and collateral and paperwork
requirements for different types of loans– Factors influencing credit and collateral decisions – Payment services and fees
• Data from 249 participants in 88 countries to date
Minimum Balance to Open a Savings Account % of GDP per Capita
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.01%
0.04%
0.09%
0.10%
0.24%
0.54%
0.80%
0.89%
0.98%
1.03%
1.24%
1.38%
1.40%
2.02%
2.91%
12.18%
21.26%
24.33%
48.80%
Australia
Denmark
Spain
Turkey
Japan
United Kingdom
Sweden
Bosnia-Herzegovina
Slovenia
Brazil
Tunisia
Peru
Bolivia
Bulgaria
Bangladesh
Greece
Colombia
South Africa
Lithuania
Hungary
Argentina
Philippines
Ghana
Armenia
Uganda 95th Percentile
75th Percentile
50th Percentile
25th Percentile
5th Percentile
Annual Fees Associated with Savings Account% of GDP per Capita
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.03%
0.03%
0.03%
0.09%
0.11%
0.23%
0.35%
0.37%
1.13%
1.34%
1.87%
3.36%
Armenia
Bangladesh
Bulgaria
DenmarkGhana
Hungary
Japan
LithuaniaPhilippines
Slovenia
Sweden
Turkey
United KingdomBrazil
Greece
Spain
AustraliaTunisia
Colombia
Bosnia-Herzegovina
Peru Argentina
South Africa
Bolivia
Uganda 95th Percentile
75th Percentile
50th Percentile
Fees Charged on Consumer Loans% of GDP per Capita
0.00%
0.21%
0.21%
0.49%
0.53%
0.55%
0.73%
0.78%
0.80%
1.18%
1.22%
1.25%
1.31%
1.35%
1.47%
1.49%
1.65%
1.76%
2.66%
2.72%
2.73%
3.16%
3.36%
3.39%
3.40%
Japan
Bangladesh
Sweden
United KingdomAustralia
South Africa
Lithuania
TunisiaTurkey
Slovenia
Colombia
Spain
Peru Bulgaria
Bosnia-Herzegovina
Denmark
Ghana Philippines
Uganda
Greece
ArmeniaBrazil
Hungary
Bolivia
Argentina95th Percentile
75th Percentile
50th Percentile
25th Percentile
5th Percentile
Fees Charged on SME Loans% of GDP per Capita
0.00%0.10%0.11%
0.22%0.34%
0.64%0.67%
0.90%1.03%1.09%1.14%
1.28%1.45%1.46%1.46%1.49%1.52%1.60%1.64%
1.78%2.21%2.25%
2.46%3.57%
4.07%
Japan
Peru
Colombia
Sweden
ArmeniaSlovenia
Lithuania
South Africa
Spain
Bosnia-HerzegovinaUnited Kingdom
Australia
Tunisia
Hungary
Turkey Denmark
Philippines
Argentina
Ghana
BulgariaUganda
Bangladesh
Brazil
Bolivia
Greece95th Percentile
75th Percentile
50th Percentile
25th Percentile
5th Percentile
Fees Charged on Business Loans% of GDP per Capita
0.00%0.10%
0.14%
0.21%
0.27%0.34%
0.46%
0.77%1.07%
1.14%
1.17%
1.19%1.39%
1.45%
1.46%
1.49%1.52%
1.59%
1.59%1.60%
2.02%
2.46%
2.91%3.44%
5.44%
Japan
Peru
Bangladesh
SwedenColombia
Armenia
Slovenia South Africa
Spain
United Kingdom
LithuaniaBosnia-Herzegovina
Ghana
TunisiaHungary
Denmark
Philippines
Uganda Bulgaria
Argentina
Turkey Brazil
Australia
Bolivia
Greece95th Percentile
75th Percentile
50th Percentile
25th Percentile
5th Percentile
Number of Days to Process Consumer Loan Applications
0.130.75
1.001.001.001.001.131.301.37
1.701.771.912.00
2.332.39
2.604.754.815.01
5.225.365.38
9.1910.19
11.33
SpainDenmarkAustralia
Brazil GreeceUnited
Slovenia Uganda
South Africa Sweden
JapanPeru
ArgentinaLithuaniaColombia
Turkey Hungary Bulgaria
Bangladesh Bosnia-
ArmeniaBoliviaTunisiaGhana
Philippines
95th Percentile
75th Percentile
50th Percentile
25th Percentile
5th Percentile
Costs of International Money Transfers% of GDP per Capita
0.03%
0.08%
0.08%
0.08%
0.10%
0.12%
0.13%
0.17%
0.32%
0.32%
0.41%
0.44%
0.48%
0.51%
0.52%
0.54%
1.02%
1.19%
1.38%
1.39%
1.85%
2.86%
3.02%
4.11%
10.62%
Denmark
Australia
United Kingdom
Sweden
Japan
Bulgaria
Slovenia
Hungary
Turkey
Uganda
South Africa
Philippines
Spain
Lithuania
Bosnia-Herzegovina
Peru
Argentina
Colombia
Bangladesh
Greece
Brazil
Tunisia
Bolivia
Armenia
Ghana 95th Percentile
75th Percentile
50th Percentile
25th Percentile
5th Percentile
Moving Forward
Data will help us answer key policy-relevant questions:
• How well the financial system in different countries serve the poor and the enterprises that employ the poor?
• Access to which types of financial services has the greatest impact on reducing poverty and lifting the growth rates in deprived regions?
• What are the chief obstacles to access?
• What policy interventions and institutional arrangements can improve access for underserved groups?
Already having impact – central role in the UN Year of Microcredit, speeches of the UN Secretary General, citations in the Economist (Survey article, indicators)