FinScope Consumer Survey DRC 2014 LAUNCH PRESENTATION 26 March - PowerPoint PPT Presentation

FinScope Consumer Survey DRC 2014 LAUNCH PRESENTATION 26 March 2015 Kinshasa, DRC Making financial markets work for the poor

Objectives of FinScope DRC 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 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 (RH) weighting) SC Pilot and Questionnaire Data analysis questionnaire design revision SC SC Sampling, maps Fieldwork Launch and and field dissemination n=5,000 preparations 3

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 Coverage and Sample and fieldwork Respondent profile methodology validation   Fieldwork conducted from Universe: Adult  Representative sample May to July 2014 population in selected at Capital, peri-urban survey areas of DRC and rural levels  Questionnaire translated  into French DRC residents 15 years  Covered areas of and older Central Bank activity  5 000 interviews conducted by Target Research and  Sample drawn Consulting proportional to population size  Sample designed by AfricaScope  Survey data weighted to adult population of  Quality control by Frontline 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) 7 • DRC has a strong network of local and international remittance companies

Understanding people’s lives: Demographics Gender Age Education 15-17 8 No formal 10 education 18-24 18 49 Primary school or 31 51 25-34 27 less 35-44 18 High school 48 education Male Female 45-59 18 11 University or higher 10 60+ 8 Base: 15 years or older

Understanding people's lives: Satisfaction with life In the past 12 months: Life will be better in 2 years 85 10 5 Unable to send children to 14 35 20 26 5 school 47 50 3 Happy with education Went without medicine 12 42 28 18 Up to government to 44 49 7 provide for family Skipped a meal 8 38 31 22 1 HH money improved in 23 73 4 past year Often Sometimes Rarely Agree Disagree Not applicable Never Don't know 9 Note: Not applicable responses not shown Base: 15 years or older

Possession of documentation • Other than elector’s card, a low possession of documentation . Is this a barrier to financial access? Possession of documentation in own name [%] Elector's card 77 Proof of residence 8 Proof of income 6 Passport 4 ID equivalent 3 Driver's license 3 Pupil card 2 10 None of these 16 Base: 15 years or older

Household dwelling ownership and type of construction materials used Main type of wall construction Dwelling ownership [%] materials used[%] 2 5 1 3 10 8 11 10 12 6 15 1 1 13 5 8 6 16 22 9 23 39 17 21 11 14 10 12 4 83 24 68 62 47 53 48 48 33 15 Total Capital Peri-urban Rural Owner Tenant Free Total Capital Peri-urban Rural Brick adobe Cement block Dwelling ownership higher in Rural Baked brick Wood [83%] than Urban regions [53%] Plant / mats Beaten earth 11 Tarpauling / cardboard sheets Base: 15 years or older

Understanding people's lives: Access to infrastucture and media channel use in the past month Total Radio 39 Top 3 main lighting sources: Flashlight 41% TV 27 Electricity 21% Oil lamp 19% Newspapers 7 Top 3 main water sources: Not equipped 19% Equipped 17% Service valve 15% Internet 6 % of individuals with access to latrine / flush Magazines 4 toilet 31 % 12 Base: 15 years or older

Understanding people's lives: Household ownership of assets Bed/Mattress 81 Radio 57 Mobile Phone 51 Lamp/floor lamp 42 Television 34 Video recorder / CD-DVD Player 21 Bicycle 20 Wardrobe/Closet 17 Fan 15 Stove/Portable stove 13 Refrigerator / Freezer Chest 12 Generator / Solar pannel 8 Motorcycle / Motorbike 8 Sewing machine 6 Desktop or Laptop 6 Satellite Dish / Decoder 6 Wheelbarrow 6 Hi-fi or sound system 5 13 Photo Camera / Video Camera 5 Base: 15 years or older

Understanding people's lives: Income / livelihoods Personal monthly income [%] Income generating activities [%] (US$1 = CDF925) 41 Farming / fishing 32 No income 4 33 Own business 21 24 Money from parent / other family 12 Less than CDF8.999 13 15 Money from husband, wife / partner 8 4 Money from friend CDF9.000-CDF26.999 16 15 Selling things on the street 7 6 Likelemba / informal savings group CDF27.000 - CDF89.999 20 2 Rent 1 1 Providing interest on loans CDF90.000-CDF179.999 15 6 Job with government 4 4 Job with company 3 CDF180.000 + 11 8 Job with individual person 5 6 Piece job 2 Don't know/refused 21 Do not get money 4 Income generating activity Main source of income 14 Base: 15 years or older

Understanding people's lives: Income segments Estimated median Main Income generating activities [%] reported income (CDF ) Formal employment 7 CDF90.000 Business owner 21 CDF85.000 Informal employment 7 CDF70.000 Sell to neighbours / on street 9 CDF48.000 Depend on others 21 CDF48.000 Farming 32 CDF25.000 Median monthly income estimate based on those that claim to know their No money 4 income and a proportion within the appropriate income band 15 Base: 15 years or older

Food needs and farming problems Farming problems experienced [%] When it comes to household involvement in Lack of tools 24 farming, 55% of household What to grow 18 are involved in farming: Drought 14 26% only farm, 29% farm Product spoiling 13 and do other work and 45% Selling prices 10 are not involved in farming Not enough land 7 at all. Not getting loans 4 Land conflicts 2 None 4 Farming coverage of food needs [%] None 2% People in DRC are primarily farming to Some All eat 79% 19% 16 Base: 15 years or older in households involved in farming

Involvement in farming • 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 Mostly sell 6 Consume and sell 76 Consumption Farming coverage of food needs [%] only Farming coverage of food needs [%] None Some Sell 18% 1% None 51% 82% 2% All 13% Some All 85% 48% Crops farmed [%] Crops farmed [%] Tubers and root crops Tubers and root crops 85 93 Beans, pulses, peanuts Beans, pulses, peanuts 69 79 Cereals (maize etc.) Cereals (maize etc.) 61 77 Vegetables Vegetables 53 51 Fruits Fruits 25 38 Sugar cane Sugar cane 12 21 Oil palm Oil palm 9 20 Beverage crop (tea etc.) Beverage crop (tea etc.) 6 8 Poultry Poultry 41 46 Goat / sheep Goat / sheep 32 25 Pigs Pigs 11 22 Fishing 2 Fishing 10 17 Meat cattle 6 Meat cattle 4 Base: 15 years or older in households involved in farming