Embed Size (px)
Citation preview
AFI Financial Inclusion Data working
group
San Salvador, April 2016
Shaping our tools: Measuring financial inclusion for development
“We shape our tools and thereafter our tools shape us”
- Marshall McLuhan
i2i Measurement mandate
• The i2i facility is an open collaboration funded by the Bill & Melinda Gates Foundation in partnership with The MasterCard Foundation.
• Facility objective: The i2i facility seeks to drive collaboration to improve the relevance, reliability and use of data to design of effective programmes, policies and products.
• Measurement objective: To develop measurement frameworks that answer key financial inclusion questions, in collaboration with decision makers.
• Measurement audience: Governments and development agencies
• Measurement and goals
• What to measure?
• Next steps
Overview
Measurement and goals: What concerns stakeholders?
Three common measurement needs• Driving usage• FI impact or outcomes including consumer protection• Financial literacy/ capability
Across measurement objectives• Disaggregated data – gender, location, youth, small business
Measurement and goals: Are we setting off the right races?
AFI members that adopted Maya Declaration increased % of adults with accounts by 9.5% from 2011 – 2014 (Findex)
The number of people worldwide having an account grew by 700 million between 2011 and 2014 (Findex)
Measurement and goals: The big compromise
Goal: Inclusive financial systems provide individuals and firms with greater access to resources to meet their financial needs, such as saving for retirement, investing in education, capitalizing on business opportunities, and confronting shocks (WB, 2014)
Financial inclusion: proportion of individuals & firms that use financial services (WB, 2014)
Why measure ownership to target financial inclusion?• Alternatives not defined• Data constrained
Measurement and goals: Account ownership not resulting in usage
China
South Afric
aBraz
il
TurkeyKen
yaIndia
Nigeria
Rwanda
Mexico
Zambia
Indonesia
Colombia
Banglad
esh
Philippines
Peru
Vietnam
Ethiopia
Tanza
nia
Myanmar
Egypt
DRC
Pakist
an
Yemen
0%10%20%30%40%50%60%70%80%90%
100%Dormant account at FI (0 transactions) Mailbox account at FI (1 - 2 transactions)Used account at FI (> 3 transactions)
% o
f adu
lts w
ith a
n ac
coun
t at a
form
al
finan
cial
inst
itutio
n
Source: Findex 2015
“[Bankerisation*] It is not so good, it obliges us to not go to work, because we need so much time. And not only for ourselves, I also know friends in the province that require us to collect for them here. I am practically the second signatory for two or three people who live in the province”
DRC, male, government employee in Kinshasa, 2015*Paying civil servant salaries into bank accounts
“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”
- James Harrington
• Measurement and goals
• What to measure?
• Next steps
Overview
What to measure? Our focus
The challenge: To measure financial inclusion for development
i2i goal = improve data available and use of data to drive appropriate decisions – in collaboration with data collectors and users
i2i measurement focus:• Going beyond ownership to usage• Exploring outcomes
What to measure? Unpack AFI framework into an FI theory of change – focus on usage and outcomes
* An existing relationship with a financial service provider that confers the right to use a financial service without any further requirements having to be met
Enabling environment
Environment allows appropriate products to be provided
Availability
Appropriate products are available to consumers
Ownership*
Adults take-up products
Usage
Adults use products effectively
HH and gov’t objectives for which the use of financial services is a necessary but not sufficient condition.
FI Outcome
Outcomes directly attributable to usage of financial services
Impact
Quality Access Usage Impact
(Outside FS control)
What to measure? Drivers of usage and outcomes?
Enabling environment
Availability/Access
Ownership
Consumer value not increased
Usage FI Outcome Impact
Quality Access Usage Impact
What to measure? Understanding the linkages: Consumer value
Enabling environment
Availability/Access
Ownership Usage ImpactFI Outcome
Net value Value Cost
Increase in welfare of consumer
Utility derived from using financial
services
Direct and indirect cost to use financial
services
Portfolio of needs met
Functional needs
Experiential needs
Capability cost
Access costIndi
cato
rs
Sustainable usage
Consumer value increased
Quality Access Usage Impact
What to measure? Unpacking consumer value
• Transfer of value• Liquidity• Resilience• Meeting goals (education,
housing, business, old age)• Productive risk taking
• Awareness• Knowledge• Skills• Attitudes incl. Trust• Decision constraints
Net value CostValue
Sustainable usage
Functional needs
Experiential needs
Capability cost
Access cost
• Usage (digital, informal, cash)• Fit for purpose interactions (save,
spend, risk, grow)• Number/ value/ proportion of
interactions • Breadth of use (portfolio of
services)• Negative value (Indebtedness,
Abuse)
• Consumer satisfaction• Control/ Self-discipline• Choice• Social identity/ Status• Peace of mind
• Proximity• Affordability• Reliability• Convenience• Connectivity (digital, physical)• Eligibility incl. Identity
Portfolio of needs met
• Financial health/ wellness• Financial stress
What to measure? Measuring value – improving FI outcomes by meeting needs
RCTV – Remote cross-border transfer of valueRDTV – Remote domestic transfer of value
Source: FinScope Consumer Survey Zimbabwe , 2014
RCTV
Investm
ent in
Busines
s
Educatio
n
Asset
accu
mulation
RDTV
Farming in
puts
Encash
ment
Consumptio
n smoothing
Risk m
itigati
on
Bill pay
ment
Local p
aymen
t0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Use savings Borrow Use payment instrumentsUse insurance Use multiple financial services
% o
f adu
lt po
pula
tion
What to measure? Financial stress: Assessing the link between inclusion and well-being
$0 - $300%
10%
20%
30%
40%
50%
60%
70%60%
48%
% of adults, earning less than a dollar a day, that reported they had to skip a meal, were not able to send their children to school
or had to go without medical treatment or medicineFinancially excluded adults (informal or formal)Financially included adults (formal or informal)
Income category
% o
f adu
lts
Source: FinScope Consumer Survey DRC, 2015
What to measure? Potential game-changers
1. Usage: Move away from ownership-based indicators of usage, to interaction-based indicators of usage
2. Defining markets for financial services: Moving from product-based measures of market size to needs-based measures of market size
3. Proximate outcomes: Measure proximate outcomes that contributes to impact
“One accurate measurement is worth a thousand expert opinions”
– Grace Hopper
• Measurement and goals
• What to measure?
• Next steps
Overview
Next Steps
1. Survey to better understand AFI members’ measurement needs2. Select priority measurement frameworks3. Build key frameworks in collaboration with AFI4. Pilot frameworks with interested partners
Thank you!
Mia ThomE-mail: [email protected]
Celina LeeE-mail: [email protected]
Please contact us at…insight2impact | i2i is a facility established by FinMark Trust and Cenfri to advance the use of data for financial inclusion. i2i aims to demonstrate how policymakers and providers can draw insights from data to inform the design of financial inclusion programmes, policies and products. i2i is funded by the Bill & Melinda Gates Foundation in partnership with The MasterCard Foundation.
For more about i2i, see attached brochure or our website at www.i2ifacility.org
