FinScope Consumer Survey Malawi 2014 LAUNCH (August 2014) October 2014 (revised due to changes in the weights) Making financial markets work for the poor
Objectives of FinScope Malawi 2014 • 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 assess trends/changes over time (from 2008) • To stimulate evidence-based dialogue that will ultimate lead to effective public and private sector interventions that will increase and deepen financial inclusion 2
Research process Design Implementation Results 1 2 3 Data management Agreements Training of (data entry, cleaning enumerators (SC, LPC, RH) weighting) SC Pilot and Questionnaire Data analysis questionnaire design revision SC SC Sampling, maps Fieldwork Launch and and field dissemination n=3005 preparations 3
Methodology - overview Respondent Sample and Quality control and profile methodology data validation • Quality control / field • Sample drawn by MCG, using • Universe: Adult checks conducted by sampling framework from NSO, population in the Research House, Representative on national, Malawi Steering committee urban/rural, and regional level • members, FinMark Residents of • Trust, LPC Malawi who are Comprehensive LISTING in 503 16 y ears and EAs – listing 115 913 households • Data validation against older census data and FS • 3005 Face-to-face pen and Malawi 2008 paper interviews ± 75 min. • Weighting of the data • Fieldwork conducted by conducted by Dr. Millennium (November 2013 – Ariane Neethling March 2014) 4
Contents 1. Understanding people’s lives: Have people’s lives changed? 2. Financial capability 3. Financial inclusion overview: Access Strands, total product uptake, Landscape of Access – what has changed since 2008? 4. Banking: Has it increased? 5. Savings and investments: Do people manage to save? 6. Borrowing and credit: Has the usage in credit increased? 7. Insurance and risk management: Did medical insurance remain its importance? 8. Remittance: Who is sending/receiving money? 9. Mobile money 10. Conclusions and recommendations 5
Understanding peoples’ lives: Demographics • 81% reside in rural areas • Total adult (16+) 40% are under 30 years of age population • 76% have primary education or 8 million less Urban/rural Gender Age Education No formal education 15 16 - 17 yrs 4 Primary standard 1-5 30 18 - 24 yrs 23 15 4 43 25 - 30 yrs 17 Primary standard 6-8 31 57 31 - 35 yrs 14 Secondary 1-2 11 81 36 - 40 yrs 11 10 Secondary 3-4 41 - 50 yrs 14 Vocational training Urban Peri-urban Rural Male Female 2 51 - 60 yrs 9 institute University or other 1 61 plus yrs 8 higher education 6
Understanding peoples’ lives: Access to Infrastructure 2008 Number of individuals with access to piped water Number of individuals with electricity (inside dwelling or yard/plot) (for cooking or lighting) 8.7 % (=528 000) 8.8% (=532 000) 2014 Number of individuals with access to piped water Number of individuals with electricity (inside dwelling or yard/plot) (for cooking or lighting) 9.9 % (=792 000) 9.5% (=762 000) 7
Understanding peoples’ lives: Ownership of assets 72 Torch 31 51 Cell phone 32 53 Radio 65 49 Bicycle 50 38 Bed 33 20 Lounge suite or sofa 15 15 TV set 2014 12 6 2008 Refrigerator or deep freezer 5 4 Electric or gascoooker or hotplate Increased ownership in: 5 • 3 Car, truck or other vehicle Cell phone 51% 3 • 3 Bed 38% Motorcycle 2 • TV sets 15% 3 Electric device to heat water 3 • Lounge suite 20% 2 Donkey or ox drawn cart 3 2 Plough 2 8
Understanding peoples’ lives: Income / livelihoods • 90% of households are involved in farming – 66% of them farm for consumption mainly. Tobacco, maize and groundnuts bring most income for the 34% households that sell their produce • Farming remains one of the most important source of income ( 46% ) • Only 8% receive a regular salary • 45% personally earn less than MK 10 000 per month (US$23.4) • 28% (about 1 million) house holds own any kind of livestock – of which 67% would sell their livestock to meet their expenses Sources of income Personal monthly income (US$1 = MK420) No income 10 Farming 46 MK 1 - 10 000 45 Ganyu (Piecework) 45 MK 10 001 - 20 000 9 Money from others 26 MK 20 001 - 50 000 8 Own business 23 MK 50 001 - 250 000 2 Wages or salary 8 MK 250 001 and more 1 Other 8 Don't know/refused 25 9
Understanding peoples’ lives: Expenditure and payments Monthly expenditure In 2008 we asked the largest expenses in 90 Food and grocery a normal month, which is not entirely comparable to 2014: Communication 45 1. Food and grocery 93% 26 Travelling expense 2. Expenses, e.g. rent, bills 14% 3. Medical expenses 12% Household expenses 17 4. Savings 7% e.g. rent, bills 5. Business 4% Savings/insurance 15 6. Communication (airtime) 2% instalments 16 Business expenses 11 Medication Loan repayments 8 8 Clothes 4 Education 6 Other 10 Base: 18 years or older
Summary More changes in the population profile: Decrease in the rural population from 84% to 81% Increase in female population from 52% to 57% Small improvements in education: percentage of people with formal education increased from 80% to 85% Small improvements in access to infrastructure: Access to piped water increased from 8.7% to 9.9% Access to electricity (for cooking or lighting) increased from 8.8% to 9.5% Average time taken to reach a bank branch reduced from 83 minutes to 77 minutes Farming remains the most important source of income 11
Contents 1. Understanding people’s lives: Have people’s lives changed ? 2. Financial capability 3. Financial inclusion overview: Access Strands, total product uptake, Landscape of Access – what has changed since 2008? 4. Banking: Has it increased? 5. Savings and investments: Do people manage to save? 6. Borrowing and credit: Has the usage in credit increased? 7. Insurance and risk management: Did medical insurance remain its importance? 8. Remittance: Who is sending/receiving money? 9. Mobile money 10. Conclusions and recommendations
Financial capability - Accessing information Unrecognised financial terms Desired financial education How to keep your money safe 72 Debit card 88 How to save your money 68 Credit card 87 How credit works 67 Grace period 80 How interest rates work 59 How to insure your life to Collateral 78 54 benefit your family when… How to insure your valuable 54 Interest rate 71 things against losses How to use mobile money 53 Life insurance 67 How to use an ATM to 52 transfer or withdraw money Current account or 68 How to use your cell phone cheque account 51 for banking ATM or Money Card or 64 How to draw up and manage a cash card 51 personal budget How to se the internet for Savings account 58 48 banking How to transfer airtime from 46 13 Personal budget 57 one's cell phone to another
Financial capability - Accessing information Where do people usually get financial Responsibility for financial decision advice making Would not ask anyone for 38 help Respondent make 31 decision alone Your spouse or partner 26 Parent and/or grandparent 9 Respondent and 38 partner make decision A friend 9 Other family members 6 Respondent and other family members make 8 One of your children 2 decision Any formal financial 4 institution Respondent do not 23 Financial adviser 3 make decision Someone you trust in the 52% of those who 3 community (e.g. Teacher) get financial Other 5 advice on money management Does not know 2 obtain advice 14 from family/friend
Someone is financial incapable if he/she can not plan Financial capability and manage money, but Malawi would be an exception due to low, inconsistence income. – Managing money Malawians use their savings as the coping strategy when they run out of money. Planning and tracking Reasons why people run out of money (96%) 65% do not keep to plan because of 47 low income Insufficient/low 71 37 income 17 Fluctuating/unreli 12 able income Plan/budget on how to Keep to the plan you Keep records of your Unexpected spend your money make for using the spending events, e.g. 10 money funeral Frequency at which people run out of money Unplanned nice to have expenses, 4 e.g. new cloths 20 40 36 4 Other 3 Always Often Sometimes Never 15
Financial capability – Planning ahead Main risks to livelihoods Most costly events Illness within the household 28 Illness or medical emergency for self or 39 Theft 21 family member Drought 13 Funeral 37 20% (1.6 million) individuals Rise in prices 11 are from households that Death of income earner 8 experienced 1 or more deaths Wedding 12 in the past year prior to the Loss of employment 5 survey Natural disaster 5 Birth of a child 8 Death of family member 3 Increase in household size 2 Engagement 2 Loss of land or access to land 2 Death or illness of livestock 2 None of the above 2 Other 13 Medical expenses are also a main reason for savings ( 13% ) and borrowing ( 12% ) 16
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