Financial inclusion in Africa

Thorsten Beck

Low level of financial inclusion

05

101520253035404550

Bank accounts per 100 adults

Bank branches

per 100,000 adults

Firms with line of

credit to total firms (all firms)

(%), 2009-11

Adults with an account at a formal fin. inst. to total adults

(%)

Non-African developing countries

Sub-Saharan Africa

Source: Beck and Cull (2014)

Financial inclusion – low, but with high intra-regional variation

Source: Klapper and Singer (2015), based on Demirguc-Kunt and Klapper 2013.

Gender dimensions – conditional different from unconditional

• Conditioning on household/enterprise characteristics shows no significant difference between male and female individuals or male and female-headed enterprises (Aterido, Beck and Iacovone, 2013)

Source: Beck and Cull (2014)

Reasons for not bankingSub-Saharan Africa Non-African developing country

Lack of money 68 52

High costs 25 18

Lack of the necessary documentation 25 11

Geographic barriers 22 13

lack of trust 12 11

Religious reasons 2 4

No need 5 9

Competition is key to

innovation

Focus on Services;

not institutions• Innovation might come

from unexpected quarters• New products (leasing

and factoring)• New delivery channels

• Competitio

n within the

Banking Sector

• Look beyond the banking

sector

• Look beyond the

traditional fin

ancial

services sector

Innovation is key• Competition is key for innovation that is necessary for broadening

financial systems • Reap potential benefits of technology

• Level playing field – open infrastructure to all safe and sound players• Might imply an activist government role• Relates to credit registries, payment system etc.

• New regulatory approach to innovation• Revert sequence of legislation-regulation-innovation

• New approach to inclusion• Move away from credit- or savings-led inclusion to payment-led inclusion

approach

Thank you

Thorsten Beckwww.thorstenbeck.com