FinScope 2018: Topline Findings June 2018 Content 1. FinScope - - PowerPoint PPT Presentation

FinScope 2018: Topline Findings

June 2018

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

FinScope 2018 Objectives

• To track overall trends in financial inclusion to provide

information on how the landscape of inclusion has changed since 2009, including benchmarking these trends with peer countries within the region

• To provide insights into what can be done at both the policy

and market levels to increase financial inclusion further – Drivers of; and barriers to inclusion

Methodology comparative with other FinScope surveys

3 stage sampling – Step 1 – EA sampling (UBoS)

• 320 EA selected – achieved 316

– Step 2 – Household listing (Ipsos)

• 10 HH per EA – achieved 3002 interviews (94%

response rate)

– Step 3 – Individuals >= 16 years

• 1 individual selected per selected HH

Weighting & Validation (UBoS)

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

Total Population of Uganda Adult population, 16 years and older

38.8 MN 18.6 MN Demographics

76% of adults reside in rural areas

Rural 76% Urban 24% Rural-Urban distribution

Male, 46% Female, 54%

Adult population is female skewed

32% 26% 17% 11% 9% 5% 16 t o 25 y ears 26 t o 35 Ye ars 36 t o 45 y ears 46 t o 55 y ears 55 t o 65 y ears

• lde

r tha n 65 y ears % of adults

58% of adults are younger than 35 years

15% 55% 24% 5% 1% N ever w ent to school Primary level s Se conda ry leve ls Spe cia lize d tra ining Tertiary % of adults

70% of adults have not achieved secondary levels of education

Financial Inclusion Enablers

52% of adults own mobile phones and rural adults less likely to have digital connectivity

52% 4% 10% 46% 2% 5% 70% 12% 25% Mobil e ph

• ne o

wne r ship Com puter ac cess Interne t acc ess % of adults %

• f adults

%

• f rura

l adults %

• f urban ad

ults

Less than 20% of adults meet stringent KYC requirements

84% 15% 14% 84% 13% 11% 85% 25% 22% ID Reside nce KYC (Both) % of adults %

• f adults

%

• f rura

l adults %

• f urban ad

ults

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

78% of Ugandan adults are financially included

78% 78% 77% 75% 86% 22% 22% 23% 25% 14% All a dults Males Fe males Rural U rb an % adults incl uded % adults exc luded

Financial Access Strand

22% 24% 20% 18% 35% 36% 39% 34% 34% 41% 20% 15% 23% 23% 10% 22% 22% 23% 25% 14% All a dults Male Fe male Rural U rb an Have

• r use

formal servic es only Have

• r use

formal AN D informal servic es U se

• nly

inform al servic es Do not use a ny servic es

Formal services – provided by FSPs that are regulated Informal services – provided by providers who are not regulated

Financial Services Uptake

Measurement framework: Financial services uptake

Uptake refers to opening an account with a service provider

• r using someone else’s account

Do Ugandans use financial services to manage their financial lives? Yes No What are the drivers

• f uptake

What are the barriers? Formal providers Informal providers Payment service Saving service Credit service Insurance service Uptake

Saving Strand

13% 16% 10% 9% 27% 5% 6% 5% 5% 7% 22% 17% 26% 24% 14% 13% 14% 12% 13% 12% 47% 46% 48% 49% 40% All a dults Male Fe male Rural U rb an U sed form al savin gs mech anisms o nly U sed both formal a nd informal sav ings mec hani sms Relie d on in f o rma l saving s m echa nism s Relie d only

• n self for saving

Didn’t save

54% of Ugandan adults save. Main savings mechanisms include:

2% 5% 8% 9% 12% 23% 27% 43% Anothe r comm unity group or c hurc h SACC O Give to a h

• usehold
• r famil

y me mber/ friend t o ke ep safe RO SCA/merry-go

• r ou

nd Bank /MDI Mobil e ph

• ne

Kee p c ash at hom e and not using it for ev eryda y li ving ex penses Sa ving s g r ou p/VS LA % of savers

Credit Strand

4% 4% 4% 3% 7% 22% 20% 23% 24% 14% 19% 24% 15% 20% 18% 54% 51% 57% 52% 60% All a dults Males Fe males Rural U rb an U sed

• nly

f o rma l lend ers U sed form al and informal l enders U sed

• nly

informal le nders Relie d on fam ily a nd friends Didnt borrow

46% of adults borrow. Lenders used include:

1% 1% 1% 2% 2% 2% 3% 3% 46% 53% Credi t inst i t u t i

• n

Mone yle nder O t h er Burial so cie t y Mobil e mo ney se r v ice prov ider MFI Bank SACC O Sa ving s g r ou p/VS LA Fa mily /friend s % of borrowers

Insurance Strand

1% 2% 1% 2% 40% 37% 42% 43% 32% 59% 61% 57% 57% 66% All a dults Males Fe males Rural U rb an Have form al insuranc e Rely

• n informa

l insura nce

• nly

N

• insurance

Only 1.2% adults are insured. Types of formal insurance include:

0% 4% 6% 7% 10% 14% 51% Crop/liv est o ck insuranc e Tradi ng goo ds insurance Vehi cle third pa r ty Motor c

• mprehe

nsive L ife insuranc e L

• an protec

tion Health insurance % of insured

57% 62% 53% 51% 76% 43% 38% 47% 49% 24% All a dults Male Fe male Rural U rb an Have /U se digital payme nt mec hanism U se cash onl y

Digital Payment Strand

Uptake and usage of digital payment systems

6% 28% 51% 44% Bill pay ments Pay ing fo r goods and se r v ic es Rem itt a nce s O wn a digi t a l ac cou nt % of adults

Drivers of formal financial inclusion in Uganda

0% 1% 1% 2% 2% 5% 11% 56% Capi t a l marke t s Coope ra t iv es Insurance MFIs/mi crolende rs Pensions SACCO s Comme rc ial banks/MDIs Mobile money se rv ice providers % of adults

11% adults are served by the banking sector 57% adults served by the non-bank formal sector

40% 52% 11% Paymen t services Saving se rvices Credit services Insuranc e services % of clients who use services provided

Banking sector – provider of digital payment and saving services

89% 13% 3% 1% Paymen t services Saving se rvices Credit services Insuranc e services % of clients who use services provided

Non-bank formal sector - provider of digital payment services

37% 25% 12% 14% 2% SGs/VSL As Sho p credit RO SCAs Burial soc ieties Money lende rs % of adults

Drivers of informal financial inclusion in Uganda

62% 71% 90% Pay ment servic es Sa ving servi ces Credit servic es Insurance se rv ice s % of clients who use services provided

Informal sector - provider of saving, credit and insurance services

Reported drivers of uptake per provider

Provider Main Driver Secondary Driver Banks To save Process salaries/wages MFIs To get credit To save SACCOS To save/buy shares Turn to them when in financial need Mobile money

• perators

Had to receive money Had to send money VSLAs/groups Save/to get lump sum Turn to them when in financial need Money lenders Quick access to money Proximity

Perceived barriers to uptake per provider

Provider Main barrier Secondary Barrier Banks Insufficient money to justify Proximity MFIs Insufficient money to justify Awareness SACCOS Awareness None in community Mobile money

• perators

Haven’t got phone Not many transactions Insurance Lack understanding Cannot afford

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

Income / Expenditure

• 47% of adults keep track of income and expenditure
• 77% claim adjusting their expenditure according to the money they have

available Savings Advice

• 36% of savers seek advice about savings

mechanisms before they decide where to save Advice on Credit

• 16% of borrowers seek advice about

different lenders before they decide from whom to borrow Financial Advice

• 56% of adults seek financial advice
• 47 % claim they don’t need advice
• 16% do not want to ask for advise

Main sources of advice:

• Family & friends – 50%
• Household members – 42%

Perceived safest savings mechanisms

• 34% adults – banks
• 26% adults – SG/VSLAs

Ugandans are most confident to borrow from

• 48% adults – family & friends
• 33% adults – SG/VSLAs
• 78% of adults avoid borrowing if they can
• 79% prefer to save for something rather than borrowing to get it
• 41% of adults regard being able to borrow money as more important

then the amount they have to pay back if interest is charged Long-term savings / investments

• 20% of adults don’t know how they will cope financially in old age; 20%

plan to rely on children

• 39% of adults have no strategy to finance their asset aspirations

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

Measurement framework: Financial strategies

Coping with running out of money for regular expenses

5% 4% 11% 14% 16% 23% 27% O t h er Cut do wn

• n me

als Borrow money Use sa ving s Ask fami ly/friends to a ssist Work m

• re/d
• more

work Cut do wn

• n regul

ar ex penses % of adults

Borrowing is the most significant way to cope with unexpected events

2% 4% 6% 6% 8% 11% 16% 42% Se ll an asse t t h at was not meant for thi s p urpose Se ll an asse t bought fo r thi s p urpose Will do c asu al w

• rk/work

more Se ll c rops or other p r od ucts from farmin g Don’t know/Have not yet thought about it Se ll li vestock /p

• ultry I

kee p for this purpo se Use sa ving s Borrow % of adults

Saving & borrowing drivers – Smoothing cashflow

37% 26% 9% 8% 7% 43% 22% 11% 8% 3% To help you with re gular e xpen se s To help you cop e wi t h unex pec ted e xpe nse s Busine ss purposes Fa r m ing/fish ing pu r p

• se

s Buy residentia l land /ho use

• r bui

lding a hou se to liv e in/renov ate ho me %

• f sa

vers %

• f borro

wers

}

Productive investment

Asset building aspirations

1% 3% 5% 6% 9% 11% 14% 19% 33% L ar g e hou se hold a pplia nce s Fa r m ing e quipme nt Have not thou ght abou t t h is yet Edu cation O t h er Car/other v ehic le Busine ss House L and/farm % of adults

Financing assets

1% 3% 6% 6% 14% 31% 39% Inv est e d in property to r e nt out Boug ht an asset to sell later w hen I nee d the m

• ney

O t h er Boug ht/start e d a b usi ness to make ex tr a mone y Sa ving /putting mone y aside Eng aged in farmin g ac t i vitie s to make ex t ra money Nothing/hav ent thou ght abou t it % of adults

Content

• 1. FinScope Objectives and Methodology
• 2. Demographics and Financial Inclusion Enablers
• 3. Financial Inclusion and Services Uptake
• 4. Financial Attitudes & Capabilities
• 5. Financial Strategies
• 6. Conclusion

Financial inclusion trends over time

28% 28% 52% 58% 29% 42% 26% 20% 43% 30% 22% 22% 200 6 200 9 201 3 201 8 Have

• r use

formal servic es Have

• r use

non-bank formal servic es but not ban k servic es Ex clude d Ex clude d2

Thank you and Q&A