FinScope Consumer Survey DRC 2014 - Finmark · PDF fileFinScope Consumer Survey DRC 2014 ... • Childhood mortality (under 5 years) of 158 per 1,ooo ... provide for family

Making financial markets work for the poor

FinScope Consumer Survey DRC 2014

LAUNCH PRESENTATION 26 March 2015

Kinshasa, DRC

• To describe the levels of financial inclusion (i.e. levels of access to financial products and services – both formal and informal)

• To describe the landscape of access (i.e. the type of products and services used by financially included individuals)

• To identify the drivers of, and barriers to financial access

• To stimulate evidence-based dialogue that will ultimate lead to effective public and private sector interventions that will increase and deepen financial inclusion

Objectives of FinScope DRC 2014

2

Research process

3

Design Implementation Results

Agreements (RH)

Questionnaire design

Sampling, maps and field

preparations

Training of enumerators

Pilot and questionnaire

revision

Fieldwork n=5,000

Data management (data entry, cleaning,

weighting)

Data analysis

Launch and dissemination

1 2 3

SC

SC SC

Background

Context of financial inclusion in DRC

• The FinScope Survey is part of the broader Making Access Possible (MAP) process undertaken together with UNCDF in the Democratic Republic of Congo (DRC).

• The FinScope survey in DRC will address the information needs that would enable the country to develop evidence-based policies and regulations which will help extend the reach of financial services in the DRC.

• FinScope DRC 2014 has been conducted in conjunction with the Ministry of Finance, the Central Bank and the Institute of National Statistics (INS) in DRC. The process has been approved by the Government via the Ministry of Finance and has their full support.

4

Sampling and Methodology

Respondent profile Coverage and methodology

Sample and fieldwork validation

Universe: Adult population in selected survey areas of DRC

DRC residents 15 years and older

Fieldwork conducted from May to July 2014

Questionnaire translated into French

5 000 interviews conducted by Target Research and Consulting

Sample designed by AfricaScope

Quality control by Frontline

Representative sample at Capital, peri-urban and rural levels

Covered areas of Central Bank activity

Sample drawn proportional to population size

Survey data weighted to adult population of survey areas

Contents

1. Understanding people’s lives

2. Payments: Banking, MFIs, SACCOs, remittances and mobile money

3. Savings and investments: Do people manage to save?

4. Borrowing and credit

5. Insurance and risk management

6. Financial inclusion overview: Access Strands, total product uptake, Landscape of Access

7. Financial capability

8. Conclusions and recommendations

Introduction and context

• Although enjoying GDP growth of 8,5% in 2013 (IMF), DRC is classified as a low income country

• Key poverty indicators highlight that DRC is a country in severe poverty: • Gross National Income (GNI) per capital of $444 (2013) (HDI)

• 7 out of 10 households are classified as poor and 46% of the population in severe poverty (UNDP)

• Agriculture employs over 71% of the total population, but 73% of the population is constantly affected by food insecurity (BCC, 2012)

• Childhood mortality (under 5 years) of 158 per 1,ooo (MICS 2010)

• Ranked 186 out of 187 countries on the overall Human Development Index (2013)

• Only 18,000 individuals registered individual tax payers in the top tax bracket and only 69,000 registered in the middle income tax bracket

• Low levels of financial inclusion

• Total banking service use estimated to be 5.7% (BCC 2012)

• 23 MFIs and 126 SACCOs operate in DRC (BCC 2012)

• In June 2014, BCC recorded total bank loans of US$2bn, of which $584m (+/- 30%) is given to private households. Given the banking rate, this would mean that banking loans have to be concentrated amongst the proportionately fewer banked wealthiest private households that actually have bank loans.

• Cash-based society - 76% of household decision-makers are remunerated in cash and only 1.3% make utility payments at a bank (GSMA 2013)

• DRC has a strong network of local and international remittance companies

7

Understanding people’s lives:

Demographics

Gender Age Education

8

18

27

18

18

10

15-17

18-24

25-34

35-44

45-59

60+

10

31

48

11

No formaleducation

Primary school orless

High schooleducation

University or higher

8

51

49

Male Female

Base: 15 years or older

9

Understanding people's lives:

Satisfaction with life

23

44

47

85

73

49

50

10

4

7

3

5

HH money improved inpast year

Up to government toprovide for family

Happy with education

Life will be better in 2 years

Agree Disagree Not applicable

Note: Not applicable responses not shown

8

12

14

38

42

35

31

28

20

22

18

26

1

5

Skipped a meal

Went without medicine

Unable to send children toschool

Often Sometimes Rarely

Never Don't know

In the past 12 months:


Possession of documentation

• Other than elector’s card, a low possession of documentation. Is this a barrier to financial access?

10

77

8

6

4

3

3

2

16

Elector's card

Proof of residence

Proof of income

Passport

ID equivalent

Driver's license

Pupil card

None of these

Possession of documentation in own name [%]


Household dwelling ownership and type of construction materials used

68 53

62

83

22 39 23

5

10 8 15 12

Total Capital Peri-urban Rural

Dwelling ownership [%]

Owner Tenant Free

Dwelling ownership higher in Rural [83%] than Urban regions [53%]

11


33

15

48 48

24 47

12 4

14

17 21

10

9

6 13

11

8 1

3

16

6 1

1 11

5 10

2

Total Capital Peri-urban Rural

Main type of wall construction materials used[%]

Brick adobe Cement blockBaked brick WoodPlant / mats Beaten earthTarpauling / cardboard sheets

39

27

7

6

4

Radio

TV

Newspapers

Internet

Magazines

Total

12


Access to infrastucture and media channel use in the past month


Top 3 main lighting sources:

Flashlight 41% Electricity 21% Oil lamp 19%

% of individuals with access to latrine / flush

toilet 31 %

Top 3 main water sources: Not equipped 19%

Equipped 17% Service valve 15%

81

57

51

42

34

21

20

17

15

13

12

8

8

6

6

6

6

5

5

Bed/Mattress

Radio

Mobile Phone

Lamp/floor lamp

Television

Video recorder / CD-DVD Player

Bicycle

Wardrobe/Closet

Fan

Stove/Portable stove

Refrigerator / Freezer Chest

Generator / Solar pannel

Motorcycle / Motorbike

Sewing machine

Desktop or Laptop

Satellite Dish / Decoder

Wheelbarrow

Hi-fi or sound system

Photo Camera / Video Camera 13


Household ownership of assets


41

33

24

15

4

15

6

2

1

6

4

8

6

32

21

12

8

7

1

4

3

5

2

4

Farming / fishing

Own business

Money from parent / other family

Money from husband, wife / partner

Money from friend

Selling things on the street

Likelemba / informal savings group

Rent

Providing interest on loans

Job with government

Job with company

Job with individual person

Piece job

Do not get money

Income generating activities [%]

Income generating activity Main source of income

4

13

16

20

15

11

21

No income

Less than CDF8.999

CDF9.000-CDF26.999

CDF27.000 - CDF89.999

CDF90.000-CDF179.999

CDF180.000 +

Don't know/refused


Income / livelihoods

Personal monthly income [%] (US$1 = CDF925)

14



Income segments

15

7

21

7

9

21

32

4

Formal employment

Business owner

Informal employment

Sell to neighbours / on street

Depend on others

Farming

No money

Main Income generating activities [%]


Estimated median reported income

(CDF)

CDF90.000

CDF85.000

CDF70.000

CDF48.000

CDF48.000

CDF25.000 Median monthly income estimate based on those that claim to know their income and a proportion within the appropriate income band

Food needs and farming problems

16

All 19%

Some 79%

None 2%

Farming coverage of food needs [%]

24

18

14

13

10

7

4

2

4

Lack of tools

What to grow

Drought

Product spoiling

Selling prices

Not enough land

Not getting loans

Land conflicts

None

Farming problems experienced [%]

Base: 15 years or older in households involved in farming

People in DRC are primarily farming to eat

When it comes to household involvement in farming, 55% of household are involved in farming: 26% only farm, 29% farm and do other work and 45% are not involved in farming at all.

• Of the 74% of households that farm, 18% farm mostly for their own consumption, 76% both to sell and consume and 6% mostly to sell

Consumption only 18% Sell

82%

All 48%

Some 51%

None 1%


Involvement in farming

17

85 69

61 53

25 12

9 6

41 32

11 2

6

Tubers and root cropsBeans, pulses, peanuts

Cereals (maize etc.)Vegetables

FruitsSugar cane

Oil palmBeverage crop (tea etc.)

PoultryGoat / sheep

PigsFishing

Meat cattle


Crops farmed [%] Crops farmed [%]

All 13% Some

85%

None 2%


76

6

Consume and sell

Mostly sell

93 79

77 51

38 21 20

8 46

25 22

10 4

Tubers and root cropsBeans, pulses, peanuts

Cereals (maize etc.)Vegetables

FruitsSugar cane

Oil palmBeverage crop (tea etc.)

PoultryGoat / sheep

PigsFishing

Meat cattle

• Of the 74% of households that farm, 18% farm mostly for their own consumption, 76% both to sell and consume and 6% mostly to sell

Consumption only 18%

Sell 82%

51

22

8

5

3

3

2

2

47

17

Sell crops and use money

Other income sources

Sell livestock

Collect from nature and sell

Do piece work

Sell animal byproducts

Use savings

Borrow friends / family

Don't - make do

Do not use inputs

17

35

2

4

3

3

2

1

34

28

Sell crops and use money

Other income sources

Sell livestock

Collect from nature and sell

Do piece work

Sell animal byproducts

Use savings

Borrow friends / family

Don't - make do

Do not use inputs

Farm inputs finance sources [%]

Involvement in farming

18


Farm inputs finance sources [%]

Access to facilities

• Households do not use or know the duration to many points of commercial facilities, particularly those that are part of formal franchises rather than localised places

19

73 64

53 58 48

57 40

37 30 28

85 82 80 77 74 72 64 64 61 61

Generalconvenience

store

Pharmacy Local clinic Informalmarket

Internet café PublicTransport

Petrol station ATM Bank Supermarket

Within 30 min Within 1 hour

FROM MOST TO LEAST ACCESSIBLE Base: 15 years or older

Time taken amongst those who use or know

Don’t know / don’t use [%]

11 12 6 12

66

23

59 74 66 61

17

8

8

10

16

77

None of these

Solidarity groups

Tribal / ethnicassociations

Neighbourhoodassociations

Likelemba / informalsavings group

Church or other religiousgroup

5

1

2

7

6

14

18

37

51

76

No-one

Banque lambert /moneylender

MFI or SACCO

Likelemba / informalsavings group

Community basedorganisation

Children

Other persons

Church / religious /solidarity group

Friends

Parents or otherfamily

Community membership and assistance

Group membership [%] Where would people go for financial advice or assistance [%]

20


There is very low membership of informal financial groups. Congolese would mostly seek financial advice or assistance from family or neighbours. Note the ¾ agree they can rely on neighbours for help and 3 in 5 agree they rely on church for help

DRC has infrastructure and livelihood vulnerability challenges. This is borne out through

Only 1 in 4 have electricity and 1 in 3 have a flush or latrine toilet in their household.

Only 30% of adults in surveyed areas are within half an hour of a bank

2 in 5 adults in surveyed areas have not attained high school education

The potential lack of formal institutions or lack of trust in such places is displayed through the very low percentages of people who would seek out such places for financial advice.

Rather family, neighbours and religious groups are key safety nets used for financial and other support

People’s lives Summary

21

Fewer than 1 in 4 adults in surveyed areas agree that the household money situation has improved in the past year

53% adults in surveyed areas claim to earn less than US$100 a month and a further 1 in 5 did not know or refused to give their income

There is low formalisation of employment – 1 in 3 claim farming (predominantly subsistence) to be their main income source, a further 1 in 5 mainly depend on others and a further 1 in 5 claim business (usually informal) income as main income source

55% of households are involved in farming and 82% of these households sell (some of) their produce but this is on a marginal level as only about a half claim to actively finance farm inputs such as seeds, implements and fertiliser. Furthermore the biggest problems experienced are:

Lack of tools (24%) What to grow (18%)

The main produce farmed are basic foodstuffs like tubers and root crops, beans and pulses and cereals

People’s lives Summary (continued)

22

Contents


2. Financial accounts: Banking, MFIs , SACCOs, remittances and mobile money







23

Defining financial inclusion

Total adult surveyed population 15 years and older in DRC

Financially included = have/use financial products and/or services – formal and/or informal

Financially excluded = do not have/use any financial products and/ or services –– neither formal nor informal.

Formally served

= have/use financial products and/or services provided by a formal financial institution (bank and/or non-bank). A formal financial institution is governed by a legal precedent of any kind and bound by legally recognised rules.

Informally served

= have/use financial products and/or services which are not regulated and operate without legal governance that would be recognised, e.g. Likelemba, Banque lambert.

Banked

= have/use financial products/ services provided by a bank, regulated by the Regulatory Authorities of DRC.

Served by other formal financial institutions

= have/use financial products/services provided by other regulated (non-bank) financial institutions, e.g. a loan by a micro-finance institution or insurance products.

24

Banking behaviour of the adult surveyed population

• 12% of surveyed adults are currently banked

• About 2% of the currently unbanked surveyed population were previously banked, while the rest have never been banked

Banked 12%

Unbanked 88%

Banking behaviour of the adult surveyed population [%]

2

86

Previously banked

Never banked

%

25

Financial transactions: What drives the 3% with any kind of financial account and what transactions have they done in the past 3 months?

26

12

28

42

46

Pay bills throughbank account

Non-cashtransactions

Do banking in bankbranch

Got cash from ATM

Base: Have Financial Account 15 years or older

Note that non-cash transactions are very low and banking in a bank branch is more frequent i.e. monthly activity

Primarily EFTs or debit orders

75

50

33

22

13

To save

To keep money safe

Get salary or wages

Get credit or loan

Make payments orget money

Drivers [%] Transactions conducted in past 3 months [%]

Banks: Drivers and barriers

12% of surveyed adults are banked 88% of surveyed adults are not banked

27

48

30

23

18

12

12

10

10

8

5

5

Unaware of any bank

Not enough money for bankaccount

Don't have regular income

Don't have money to save

Don't have job

Earn too little

Don't understand howworks

Don't know how to openaccount

Bank too far

Prefer cash

Don't know

73

60

55

36

36

33

32

Money safe from theft

Trust banks with money

Employers deposit salary

Helps to access loans

Safe / easy way toreceive money

Safe/easy way to sendmoney

Interest on savings

Drivers [%] Barriers [%]

52% of unbanked surveyed adults in DRC are aware of banks but don’t use them In addition to awareness, limited income is a key barrier for the unbanked Interestingly this group would trust banks with their money

MFIs: Drivers and barriers

4% of surveyed adults claim use of MFI 96% of surveyed adults do not use MFIs

28

76

17

10

8

4

4

3

3

3

3

Unaware of any MFI

Don’t know - accounts, convenience, fees

Not enough money to openaccount

NOT trust with money

No money to save

Don't have regular income

Don't know how to openaccount

Don't need

MFI too far

MFI unreliable

22

21

12

9

9

52

13

Helps get access toloans


Interest on savings

Salaries deposited

Safe way to receivemoney

Don't know

None


24% of MFI non-user surveyed adults in DRC are aware of MFIs but don’t use them Although income and trust issues feature, awareness of MFI and its workings are by far the biggest barrier to MFI use, even amongst those who have heard of and use MFIs

SACCOs: Drivers and barriers

5% of surveyed adults claim use of SACCO 95% of surveyed adults do not use SACCOs

29

87

8

4

3

3

3

3

Unaware of any SACCOs

Don't know - fees,convenience, accounts

Not enough money

Irregular income

Trust with money

Easy to understand

No money to save

50

50

41

28

27

22

14

7

37

Easy to understand


Trust with money

Employers deposit salary

Interest on savings

Get access to loans

Safe / easy way toreceive money

Safe/easy way to sendmoney

Do not know


13% of SACCO non-user surveyed adults in DRC are aware of MFIs but don’t use them Although income issues feature, awareness of SACCOs and its workings are by far the biggest barrier

42% of users claim the hours to be inconvenient

30


Remittances / money transfer overview [%]

Remittances / money transfer Strand [%]

25 1 8 66 2014

Formal Informal only Friends / family / other No remittance usage

25

2

9

66

Formal

Informal

Friends / family

No remittance usage

Remittances / money transfer

Origin and destination of remittances

31

3

8

16

17

22

63

Borrowed

Spouse

Friend

Parent

Child

Other family members

People sent to or received money from [%]

Base: 15 years or older remittance senders/receivers

57

23

53

9

In DRC

OutsideDRC

Received Sent

Destination / origin of money sent [%]

Payment channels used to send and receive money

• 1 out of 3 surveyed adults who use remittances claim to send or receive money at least once a month

32

2

3

4

28

72

Motorcycle / taxi

Cellphone

Bank transfer

Friends / family

Financial courier / otherremittance channel

Base: 15 years or older remittance senders/receivers

• Nearly 47% of surveyed adults own a mobile phone (against 51% of households), and only 1 out of 5 use paying call points

• Low use and ownership of other devices as well – compared with household ownership of 57% for radios, 42% for lamps and 34% for televisions

Mobile Phone

Computer / Laptop /

Tablet Internet

connection E-mail Paying call

points

Use 57% 8% 8% 7% 22%

Own 47% 4% - - -

Usage and ownership of communication devices

33

2

2

3

3

5

5

6

12

15

1

3

69

Don't know

Don't have a cellphone

Don't trust telecom companies

Don't trust it

It is complicated

Don't have money to send/receive

Not thought about it

Not educated on how to use it

Don't have enough information

Not registered & use mobile money

Registered & use Mobile Money

No cellphone access / mobile money awareness

Mobile money About 57% individuals claim to use a cell phone

35% of surveyed adults in DRC know about mobile money, but only 4% (10% of those who own a mobile phone) have registered on a network with even fewer (60% of those registered as well as some others), claiming to conduct mobile money activities.

34


Only 12% of adults in surveyed areas claim to use a bank Claimed financial account ownership at either banks, MFIs or

SACCOs is even lower – only 3% claim to have any such account The chief drivers of such accounts as well as using banks, MFIs and

SACCOs generally are saving and keeping money safe Non-cash transactions amongst the those with accounts is very

low The biggest barrier to using banks, MFIs or SACCOs is awareness.

Income is also an important barrier mentioned and probably a key reason for low rollout of these institutions

Besides income / employment limitations, there appears to be low trust in financial institutions, particularly MFIs. This is reflected by the large proportion of users of MFIs and SACCOs who do not know what the advantages of using these institutions is

Summary

35

Formal remittances are one of the most important drivers of financial inclusion in DRC and 1 in 4 adults in surveyed areas claim to use

This is in turn underpinned by use of places like Western Union and Moneygram

Although mobile use and ownership amongst those surveyed in DRC (at 57% and 47% respectively) is high compared to all other communication devices, it is low when compared to other countries in SADC

However these use and ownership figures still present opportunities

Presently use of mobile money is very low and the biggest barriers to adoption are awareness and knowledge.

Summary

36

Contents









37

7

4

20

44

45

Banking products

Other formal products

Informal

Save at home, in kind,friends/family

Not saving

Savings and investments

Savings usage overview [%]

38

Savings Strand [%]

7 3 17 28 45 2014

Banking Other formal Informal only Save at home / friends etc. only Not savingBase: 15 years or older

Savings and investments: Even among the 55% who save, only 38% claim to save monthly or more often

55% of surveyed adults save 45% of surveyed adults do not save

39

2

9

16

54

57

Too much expenditure

Too many familyresponsibilities

All money spent onhousehold

No income

No money left over afterliving expenses

81

41

41

29

26

17

15

12

11

10

9

9

8

To have money when need

Non-medical emergency

Medical expenses

Living expenses

Education / school fees

Improving home

Starting / expanding business

Funeral expenses

Retirement / old age

Providing for family after die

Buying / building dwelling to live

Farming expenses

Buying land


Saving is driven by informal means as well as saving at home and with family and friends

A lack of disposable income is the biggest limitation on saving The biggest recipients of savings are planned and unplanned

emergency savings Limited income is the biggest barrier cited to saving

Summary

40

Contents









41

Borrowing and credit

42


0,2

0,3

3

6

92

Banking products

Other formal products

Informal

Borrow from friends/family

Not borrowing

Borrowing usage overview [%]

Credit Strand [%]

1 3 4 92 2014

Banking Other formal Informal only Borrowing from friends etc. only Not borrowing

Borrowing and credit: “Developmental reasons come up for borrowing”

8% have borrowing/credit products 92% do not borrow

43 3

3

4

5

8

8

9

10

10

31

Don't know

Too scared to approach sucha place

Interest is too high

Earn too little

Don't have job

Can't afford

No regular income

Never thought about it

Don't need it

Don't want to have debt

6

8

14

16

17

19

26

31

Bills

Clothes

Give to another familymember

Child's education

Start / invest in ownbusiness

Food

House

Medical spending


Borrowing use is very low with only 8% claiming to borrow, primarily from family and friends

Debt is the biggest fear followed by income limitations Medical spending, food and developmental reasons feature

amongst drivers of borrowing

Summary

44

Contents









45

Insurance and risk management Only 40% of surveyed adults have ever heard of insurance

46

1% of surveyed adults have insurance

Uptake of insurance products is driven by: • Accident / travel 60% • Property damage 48% • Comprehensive motor 24%

99% of surveyed adults do not have any kind

of financial product covering risk

Main barrier to the uptake of insurance: • Value of assets too low • Affordability (job / income) • Don’t understand how works • Don’t believe in it


Insurance Strand [%]

1 99 2014

Formal Informal only No insurance coverage

At 1% of adults in surveyed areas claiming any use, insurance in DRC is incredibly low. The main barriers to insurance uptake are value of assets, familiarity, understanding and affordability

45

24

17

2

1

2

9

Savings

Sell something

Family / friends

Borrow elsewhere

Rely on community

Other

Don't know

47

Main way to pay major expenses [%]

Risk management: 44% expect a major expense in the coming year Response to major events

38

31

14

9

8

Illness / death mainincome earner

Illness / death other HHmember

Theft

Drought

Increase in HH size

Costly events experienced in past year [%]


35

19

18

7

6

4

Health

Education

Water, electricity, cooking fuel

Clothing / footwear

Furtniture / household items/…

None of the above

Expenditure to cut back on, other than food [%]

There is a need in DRC for risk cover for death and illness, as the current coping mechanisms create vulnerabilities; and health spending is most likely to be cut when financial stresses take place

Contents









48

Financial inclusion overview

• High proportion of excluded adults in DRC, with 52% excluded individuals

• Only 12% are banked but including MFI and SACCO users gives the BCC banking rate of 17%

• Altogether 36% are formally served

36

12

32

26

52

Formally served

Banked

Other formal [non bank]

Informal

Excluded

Financial Inclusion overview [%]

49 Base: 15 years or older Note: MFIs and SACCOs excluded from “banked” classification

• Banking is mainly driven by savings and transactional products

• Other formal products by remittances, and

• Informal products by savings

Drivers of banking products, other formal products and informal products

65

59

2

Transactions

Savings

Credit

Drivers of Banking Products [%]

79

26

13

13

3

1

Remittances

Transactions

Mobile money

Savings

Insurance

Credit

Drivers of “Other formal products” products [%]

93

16

Savings

Credit

Drivers of “Informal Products” [%]

50

Financial inclusion overlaps

• Very few adults (3%) use a combination of all financial services types and the majority of those included only have either Formal other (18%) or Informal (12%) inclusion –i.e. are likely to be saving or remitting but not both

Financial Inclusion overlaps

Banked 3%

Formal other

18%

Informal 12%

5%

3%

1% 6%

Excluded 52%

51 Base: 15 years or older

Financial inclusion:

Access Strand total and by gender

52

12 24 12 52 2014

Banked Other formal (non-bank) Informal only Excluded

48% are financial included and 36% are formally included


By gender [%]

13

11

26

21

13

12

48

56

Male

Female



Access Strands 2014 by income categories

53

By income categories [%]

39

16

14

7

11

4

5

29

28

24

30

29

17

6

9

14

21

12

7

14

7

23

42

41

51

53

65

82

Formal employment

Business owner

Sell to neighbours / street

Informal employment

Depend on others

Farming

No money

Banked Other formal (non-bank)Informal only Excluded

12

12

14

14

27

30

38

41

54

62

75

85

1

24

43

9

7

39

23

18

10

8

5

3

9

12

16

14

15

8

20

8

9

3

6

2

78

52

27

63

51

23

19

33

27

27

14

10

Mozambique 2009

DRC 2014

Tanzania 2013

Zambia 2009

Malawi 2014

Zimbabwe 2014

Lesotho 2011

Botswana 2009

Swaziland 2014

Namibia 2011

South Africa 2014

Mauritius 2014



Access Strand across the region [%]

54

• Transactional banking outperforms the other product categories, while mobile money and remittances lag significantly behind. Informal savings are notable.

55

24

8

2

53

9

20

24

1

2

53

9

Savings

Transactional

Credit

Insurance

Remittances

Mobile money

Landscape of access among financially included individuals [%]

55


Landscape of Access (of those with any financial product)

The Landscape of Access is used to illustrate the extent to which financially included individuals have/use financial products/services (excluding those borrowing from family/friends and those who save at home/hiding in secret place)

Base: 15 years or older financially included

Legend

Total usage

Formal usage

48% of the survey population are included, 36% formally included and 12% banked

DRC has amongst the lowest inclusion levels in the SADC region Financial inclusion is driven by formal remittances and informal

savings The challenge for inclusion is particularly stark amongst those who

main rely on farming

Summary

56

Contents









58

Main way to pay major expenses [%]

Expenses: 44% expect a major expense in the coming year

38

31

14

9

8

Illness / death mainincome earner

Illness / death other HHmember

Theft

Drought

Increase in HH size

Costly events experienced in past year [%]


35

19

18

7

6

4

Health

Education

Water, electricity, cooking fuel

Clothing / footwear

Furtniture / household items/…

None of the above

Expenditure to cut back on, other than food [%]

45

24

17

2

1

2

9

Savings

Sell something

Family / friends

Borrow elsewhere

Rely on community

Other

Don't know

5

1

2

7

6

14

18

37

51

76

No-one

Banque lambert /moneylender

MFI or SACCO

Likelemba / informal savingsgroup

Community basedorganisation

Children

Other persons

Church / religious / solidaritygroup

Friends

Parents or other family

Financial capability - Assistance and decision-making

30

33

8

29

Manage HH moneyalone

Manage HH moneywith others

Others in HH managemoney

Someone else in HHmanages for everyone

Where would people go for financial advice or assistance [%]

Responsibility for financial decision Making [%]

59 Base: 15 years or older

54

25

13

8

Full control

Together with others

No control

Don't know / nomoney of own

Control over how own money spent [%]

60

47

31

26

Have a plan for spending money Pay bills / loans / accounts on timeevery month

Keep records of your spending

Financial capability – Managing money

Planning and tracking [%] Someone is financial incapable if he/she can not plan and manage money. Congolese use their savings as the coping strategy when they run out of money.

Financial capability in DRC appears low, with fewer than half of adults in surveyed areas claiming to have a budget and only 1 in 4 claiming to keep records of their spending

Most adults go to social sources for advice but fewer than half know where to go to for advice on their financial choices and problems

Adults in DRC are particularly vulnerable with 44% expecting a major expense in the next year, mostly illness and death of household members

Current coping mechanisms are savings, borrowing and dependence on others; and worryingly health spending is most likely to be cut when such financial stresses take place

Summary

61

Contents








8. Conclusions/Recommendation

62

1. Financial inclusion

48% of the survey population are included, 36% formally included and 12% banked

DRC has amongst the lowest inclusion levels in the SADC region

Financial inclusion is driven by formal remittances and informal savings

The challenge for inclusion is particularly stark amongst those who mainly rely on farming

Key headline findings/conclusion

63

2. Landscape of Access

The financially included landscape of DRC is driven by remittances and savings

The challenge for consumer education and behaviour change to lead to deeper, engaged use beyond these basic transactions

Both the drivers and barriers to savings and credit are day-to-day concerns over living expenses

Insurance is low, despite adverse medical and death events being far more common

When such events are experienced, the current coping mechanisms are savings, borrowing and dependence on others; and health spending is most likely to be cut when financial stresses take place. Some also borrow or sell possessions

Key headline findings/conclusion.. (cont. )

64

3. Mobile Money

Although mobile use and ownership amongst those surveyed in DRC (at 57% and 47% respectively) is high compared to all other communication devices, it is low when compared to other countries in SADC

However these use and ownership figures still present opportunities

Presently use of mobile money is very low and the biggest barriers to adoption are awareness and knowledge


65

4. Livelihoods

DRC has infrastructure and livelihood vulnerability challenges Only 7% work in formal employment, 1 in 5 depend on others and

almost 1 in 3 adults claim farming (predominantly subsistence) to be their main income source

With this picture, the majority of adults receive small, inconsistent and irregular incomes. 53% personally earn less than the equivalent of US$100 a month

From a demand-side perspective the financial behaviour of these individuals is driven by daily needs – this is often the reason why resort to informal mechanisms

Low income means vulnerability to financial shocks and limits demand for financial services


66

5. Financial literacy Fewer than half of adults in surveyed areas claiming to

have a budget and only 1 in 4 claiming to keep records of their spending

Adults in DRC are particularly vulnerable with 44% expecting a major expense in the next year, mostly illness and death of household members

Current coping mechanisms are savings, borrowing and dependence on others; and worryingly health spending is most likely to be cut when such financial stresses take place

Overall low levels of financial capability


67

1. Support subsidence farming through targeted subsidies along the value chain of key crops and inputs as well as mass media communication to aid the population

2. Insurance to better manage impact of risks

3. Remittance channels like financial couriers serve the most people and a channel opportunity to provide other financial services to better meet people’s needs

4. Customer education

Financial Inclusion Priorities

68

www.finmark.org.za

Thank you

FinMark Trust

For more information on FinScope Consumer Survey DRC 2014 please contact:

Dr Kingstone Mutsonziwa [email protected]

Tel: +27 11 315 9197 www.finmark.org.za

69

mailto:[email protected]

http://www.fisncopeafrica.com/

Documents

FinScope Consumer Survey DRC 2014 - Finmark · PDF fileFinScope Consumer Survey DRC 2014 ... • Childhood mortality (under 5 years) of 158 per 1,ooo ... provide for family