FINSCOPE II 2009 FINDINGS - Microfinance Gateway · 2017-07-14 · •Majority of Ugandans live in...

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Steadman now Synovate

Demand, Access & Useof Financial Services

FINSCOPE II 2009 FINDINGS•Prepared by: Synovate•Date: 5th October 2010

1© Synovate 2009 Steadman now Synovate

Contents•Introduction•Methodology•Demographics•Income•Financial literacy•Financial Landscape•Savings•Investment•Credit•Insurance•Money transfer•Access to finance by the Youth

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Introduction


Background•FinScope studies provide data on access, demand and

usage of financial services and products

•The first FinScope study was carried out in 2006

•Since 2006, the financial sector has experienced changesand growth, notably;

- Increase in number of commercial banks- Mergers and buy offs- Innovations in financial products and services, increase

in number of branches- Upgrading of MDIs to commercial banks- Increased implementation of VSLA and SACCOs- More elaborate efforts by government in rolling out

Prosperity for All

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Background

•FinScope II (2009) is a follow up to FinScopeI conducted in 2006

•It provides details on the current status onaccess, demand and usage of financialservices

•Hence, providing information on changes andimpact created as a result of the interventionsin the financial sector

Methodology

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Methodology

•Approach: Face-to-face interviews with selectedrespondents aged 16 years and above at householdlevel

•Coverage: 56 districts•Sample selection

- Selection of EAs: Probability proportionate to size- Selection of Respondents; Kish Grid

•Achieved sample: 3001 (1649 female, 1352 male)

Distribution of the 16+

Central 940

Eastern 713

Northern 620

Western 728

UnderstandingUgandans

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Economicprofile &livelihood

• Majority of Ugandans live in the rural areas(75%)

• 63% have attained only primary education ornone at all

• 32% do not earn any cash income & only 8% areformally employed.

• For those with an income financial earning is frommainly agricultural activity (over 50%).

• Agricultural earning highest in the rural areas.30% of Urban people earn through runningpersonal businesses.

• 40 % earn irregularly

• Income from other activities constitutes 52%


Access tofacilities

• Health centre are the closest facilities to thepublic –39% mentioning Less than a km & 42%1-5km

• Formal financial institutions are relatively far fromthe majority of the public–42% said they are 5 to10km or more

• 63%(less than a km) can easily access informalfinancial services

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FinancialLandscape


Formallyincluded

Informallyserved

Financiallyexcluded

Individuals using “Formal” financial products supplied by institutionsgoverned by a legal precedent of anytype. Thus, a formal organization thatmust be bound by legally recognizedrules. Adults who currently use atleast one or more of these productsare included in this segment. This isnot exclusive usage, as theseindividuals may also be using“informal” products.

Individuals usingtraditional financialproducts supplied bycommercial banks, creditinstitutions & MDIs.

FormalotherBanked

Divided into two sub-segments for more accurate cross countrycomparisons:

Finscope financial strand segmentation methodology

Individuals using financialproducts supplied by non BoUregulated financial institutions

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Formallyincluded

Informallyserved

Financiallyexcluded

Individuals using “informal” products –i.e. productswithout recognized legalgovernance e.g. usingservices of an informal group,money lender, employer etc

Individuals who use nofinancial products - neither“formal” nor “informal” –tomanage their financial lives

Defining Financial Inclusion


Financiallyexcluded

Defining Access strand–product usage•Banked: Individuals with a product from a bank (these individuals

could also have other products but their defining characteristic isthe fact they do have access to a bank product);

•Formal Others: individuals who do not have a product from abank but who do have products from another types of formalfinancial institutions (these individuals could also have informalsavings products but their defining characteristic is the fact theydo have access to a formal financial product although this is notfrom a commercial bank)

• Informal: individuals who do not have any formal financialproducts and only rely on informal products such as savings clubs;ASCA’sand burial societies etc

•Financially excluded: individuals who did not have access to anyfinancial product at the time of the FinScope survey.

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Financiallyexcluded

21%

20%

61%

28%

0% 20% 40% 60% 80%

Banked

Formal Others

Informal

Formal

Financial products usage

Overlap in the use of financial services


Financial Access–mutually Exclusive

Base: All Ugandans 16years +

21% 7% 42% 30%

Banked Other Formal Informal Un-served

70% financially included

28% formally included

Financial inclusion is highly influenced by the informal sector

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Financial Access–mutually Exclusive

18%

22%

10%

7%

29%

43%

43%

28%

2006

2009

All Weighted population 18 years and above



Financial Access (continued)

38%

15%

9%

7%

25%

47%

28%

31%

Urban

Rural

Access by Location


The informal sectorserving more rural thanurban

Only 15% of the people inthe rural areas areformally banked

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Main source of income

Agriculture isthe mainsource oflivelihood


Formal access by employment

20%

11%

3%

19%

73%

33%

6%

7%

3%

10%

6%

8%

25%

57%

48%

39%

9%

32%

49%

25%

45%

32%

12%

27%

A household member (e.g. spouse, parent, child etc) pays my

Sell produce from own farm (food crops- beans, maize,cassav

Working on other people’s farms

Working for an individual in a private business

Employed in the formal sector like in an office–public or

Running own business

Banked Other formal Informal Un-served

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Formal access by Institution

18%

16%

3% 3%2%

1%

22%

17%

3% 3% 3% 2%

BOU regulatedInstitutions

Commercial Bank SACCO MDI MFI Credit Institution

2006 2009


Barriers to using formal financial institutions

59%

44%

29%

23%

11%

10%

10%

9%

6%

6%

5%

3%

3%

2%

Don’t have money to save

Don’t have a regular income

I earn too little to open and maintain an account

I can’t afford to have an account

I can’t read or write

I don’t know how to open an account

I don’t need an account

The financial institution is too far from where I live or stay

Don’t want to pay service fees

I prefer to use other options rather than a bank

I couldn’t speak their language

I don’t qualify to open an account

Spouse/partner does not allow to open an account

It takes long to get money from the institution

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Banked Formal other

Informal

3% 2%

42%

4%

9%

5% 5%

Excluded30%

Overlap in the user of financial institutions


Banked Formal other

Informal

5% 5%

25%

11%

15%

7% 5%

Excluded27%

Banked Formal other

Informal

2% 2%

47%

2%

7%4%

5%

Excluded31%

Urban Rural

Financial Access strand

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Savings &Investment


Currently save67%

Ever saved butstopped

9%

Never saved24%

Incidence of saving - 2009

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Saving & Investment strand

73%

72%

15%

8%

12%

20%

2006

2009

Base: Weighted population 18 years and above

Currently save Ever saved but stopped Never saved


Saving & investment strand

17% 4% 31% 19% 29%

Banked Other Formal Informal Secret place/Friends Don't save

Base: 16year and above

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Saving & investment strand

16%

18%

8%

4%

18%

32%

31%

18%

27%

28%

2006

2009

Base: Weighted population 18 years and above

Banked Other Formal Informal Secret place/Friends Don't save


Saving strand by source of income

11%16%

8%3%

14%

70%

27%0%

5%

5%

3%

5%

4%

4%

15%

41%46%

24%

21%

8%

26%33%

14%14%

22%

36%

9%

22%

41%

24% 27%

49%

24%

10%

22%

A household member(e.g. spouse, parent,

child etc) pays myexpenses

Sell produce fromown farm (Cash crops–coffee, tea,pyreth

Sell produce fromown farm (food crops-beans, maize,cassav

Working on otherpeople’s farms

Working for anindividual in a private

business

Employed in theformal sector like inan office–public or

Running ownbusiness

Banked Other formal Informal Friends/Secret place Don't save

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What is happening in the savings space?

Read: In 2009, 70% of the 16+ Ugandan population claimed to be saving

Savings mechanisms/products


71%

18% 16%

4%

26%

62%

7%

27%

6%

43%

Secret place Friends/relatives Banked Formal others Informally

2006 2009

Place of saving

Base: 18years and above

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Banked Formal other

Informal

3% 1%

31%

4%

6%

4% 3%

Excluded48%


Banked Formal other

Informal

8% 1%

15%

9%

9%

5% 3%

Excluded50%

Banked Formal other

Informal

2% 1%

36%

2%

4%4%

3%

Excluded48%

Urban Rural

Savings strand

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Credit


CurrentlyBorrowing

45%

EverBorrowed

20%

Neverborrowed

35%

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Borrowing status

34%

46%

17%

20%

49%

34%

2006

2009

CurrentlyBorrowing Ever Borrowed Never borrowed


Credit strand 2009 (mutually exclusive)

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Borrowing strand (mutually exclusive)


Borrowing by main income generating activity

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Agriculture & Credit

11%

8%

15%

4%

13%

Total Female Male Urban Rural

Incidence of borrowing for Agriculture


27%20%

30%

0%

29%

23%28%

20%

43%

21%

7%0%

12%

0%

8%6%

12%

2%

7%

5%5%

5%5%

11%

4%

33% 35% 32%39%

33%


Base: Weighted population 16 years and above who borrowed for agricultural purposes

Friends and family Commercial bank MDI SACCOS MFIs Others

Where agricultural borrowing is accessed

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35%

13%

11%

11%

10%

5%

Buy seed

Buy pesticide/herbicide

Hire of labor

Buy agricultural land

Buy fertilizers

Buy livestock

Use of Agriculture credit


Banked Formal other

Informal

3% 1%

32%

2% 1%

Excluded61%

Borrowing Strand

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Banked Formal other

Informal

3% 1%

28%

0%

1%

2% 1%

Excluded64%

Banked Formal other

Informal

2% 0.5%

33%

0%

0.5%1.5%

0.5%

Excluded61%

Urban Rural

Borrowing Strand

Insurance

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FormalInsurance

3%

Informalinsurance

3%

Noinsurance

94%

2006Formal

Insurance -3%

Informalinsurance -

22%

Noinsurance -

75%

2009

Incidence of insuranceBase: 18+years


(n=3001)

Insurance strand (include burial society & welfare fund)

Taking at least one form of insurance (23.4%)

Insurance Strand Uganda 2009

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1%

1%

2%

2%

4%

6%

18%

87%

Trading goods

Regulated provider like UgaMed …

Loan protection

Termlife

Motor Third Party Liability

NSSF

Member of welfare group

Member of burial group

Base:All those with insurance 16 years and above

Informal sectorplays an

important role ininsurance justlike in other

financial services


Formal insurance by product

49%

30%

13%

12%

6%

5%

4%

3%

2%

Insures with NSSF

Motor Third Party Liability

Term life

Loan protection

Regulated provider like UgaMed/NIC/Jubilee

Trading goods

Unregulated provider like AAR, Bupa

House- Building or contents

Other occupational pension scheme

Most people buy formalinsurance as a mandate

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Benefits of insurance

54%

14%

13%

8%

6%

3%

1%

Guard against unlikely events or uncertainties

Prevent financial losses

Don't know

Look after my family

Prestige/Status symbol in society

To have a peace of mind

None

Benefits of insurance

Ugandans appreciate the importance of insurance despite lowusage


Reason for not usinginsurance

Cant afford it

Don’t know about insurance and how it works

Never thought aboutinsurance

Don’t know how to go about insurance

Don’t want it

Don’t know where to buy insurance

Don’t believe in insurance

2006

56%

45%

14%

19%

9%

6%

4%

2009

55%

36%

25%

15%

11%

8%

6%

Cost & Knowledge of how to buy insurance are majorimpediments to use of formal insurance

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Lanscape of access


Landscape of Access - Uganda 2009

33.4

70.8

45.2

23.4 0

20

40

60

80

100Transactions product

Savings products

Credit products

Insurance products

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Comparing Landscape of Access–Informal/formal

Money transfer &Remittances

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Incidence of Money Transfer

35% 34% 37%48%

31%

1% 1% 1%

0%

1%

64% 65% 62%51%

68%


Base: All weighted population 16 years and above

Currently use Ever used but stopped Never


Incidence of Money Transfer 2006

Within Uganda

Channels


3,439,852

%

1,874,044

%

1,565,808

%

1,085,740

%

2,354,112

%

Informal services e.g. taxis 78 77 79 65 84

Commercial bank 25 21 29 35 20

Mobile money 13 12 14 21 9

Post office 3 2 5 4 3

Money transfer services (e.g western union, money

gram)2 3 1 5 1

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Incidence of Money Transfer 2006

Outside Uganda


Weighted Base628,544

%

326,681

%

301,863

%

281,963

%

346,582

%

Informal 41 42 39 20 57

Money transfer outside Uganda 34 37 32 36 33

Commercial bank 17 15 20 24 12

Post office outside Uganda 5 4 6 5 5

Non-banking Institutions 3 5 2 3 4


Frequency of receiving money

37%

18%17%

10%8%

6%

When needarises

At least once amonth

At least onceevery three

months

At least once ayear

At least onceevery sixmonths

Can’t remember

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Sources of Money

Total Urban Rural

Weighted Base641,048 279,367 361,681

Uganda88 79 93

Europe28 35 23

North America (USA or Canada)25 12 34

East Africa (i.e. Tanzania, Kenya including Rwanda & Burundi)14 11 17

Southern Sudan12 19 7


Thank You For YourAttention.Our Curiosity Is All Yours.

© Synovate 2008

FINSCOPE II 2009 FINDINGS - Microfinance Gateway · 2017-07-14 · •Majority of Ugandans live in...

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Transcript of FINSCOPE II 2009 FINDINGS - Microfinance Gateway · 2017-07-14 · •Majority of Ugandans live in...