Financial Inclusion in Africa - African Development Bank

1 Financial Inclusion in AfricaEditorsThouraya Triki Issa Faye 2013 - African Development bank (AfDB) African Development bank Group15, avenue du Ghana,Angle des rues Pierre de Coubertin et Hedi NouiraBP 323, 1002 Tunis Belv d re TunisiaISBN: publication on Financial Inclusion in Africa is produced by the staff of the African Development bank , and the views expressed therein do not necessarily reflect those of the Board of Directors or the countries they represent. Designations employed in this publication do not imply the expression of any opinion, on the part of the African Development bank , concerning the legal status of any country or territory, or the delineation of its frontiers.

2 3 ContentsForewordAcknowledgementsEditors and ContributorsAbbreviationsCountry classificationIntroductionPart 1: Financial Inclusion in Africa : Setting the StageDefining and Measuring Financial InclusionAlliance for Financial InclusionFinancial Inclusion in Africa : A SnapshotAsli Demirg -Kunt and Leora KlapperPart 2: Serving the Underserved : Selected Transformational ApproachesFostering Financing for Africa s Small and Medium Enterprises Peer Stein, Nina Bilandzic and Martin HommesWomen and Finance: Unlocking Africa s Hidden Growth ReserveSandra Taylor and Narjess BoubakriFinancial Inclusion for Rural Areas and Agriculture Angela HansenFinancial Inclusion in Fragile StatesErick Sile4 Part 3: Strategic Issues and OptionsFinancial Inclusion in Africa : The Transformative Role of Technology Issa Faye and Thouraya TrikiDFIs Support to Financial Inclusion in AfricaIsabella Massa The Trade-off Between Financial Inclusion and Financial Stability Pietro CaliceFinancial Inclusion .

3 Lessons from Latin America and CaribbeanMaria Luisa Hayem, Andrea Reyes, Ana Maria Torres5 FiguresFigure : Dimensions of Financial Inclusion 31 Figure : FinScope Access Strands in Africa 35 Figure : Account Penetration (% Adults) 44 Figure : Account Penetration in Africa by Individual Characteristics (% Adults) 45 Figure : Financial Use vs.

4 Depth 46 Figure : Financial Use vs. Access Points 47 Figure : Formal Savings by Individual Characteristics (% Adults) 49 Figure : Savings Behavior in Africa (% Population) 50 Figure : Sources of Credit by Individual Characteristics 51 Figure.

5 Reported Reasons for Current Loans (% Adults) 53 Figure : Percent of Firms with a bank Account/Loan or Line of Credit by Size 54 Figure : Investment Financing by High-Growth SMEs 55 Figure : Financing Gap Relative to Outstanding SME Credit by Region 67 Figure : Interest Rates by Client Type in Selected African Countries (2009) 68 Figure : Women Economic Opportunities and Access to Finance in Selected African Countries (2010) 76 Figure : Business Access to Finance by Gender 77 Figure : Account Usage in Africa by Gender (2011) (% Adults) 79 Figure.

6 Financial Inclusion Indicators for Rural and Urban Population in Africa 85 Figure : Sector Distribution of bank Credit in Africa (2009) 86 Figure : Account Penetration in African Fragile States (%) 97 Figure : Account Penetration in African and Non- African Fragile States 99 Figure : Savings Behavior in African and Non- African Fragile States 1006 Figure : Percentage of Firms Reporting a Loan or Line of Credit by Country Type 101 Figure : Mobile Subscribers and Penetration Rates in Africa 108 Figure : Banking and Mobile Penetration Rates in Selected African Countries 108 Figure.

7 Number of Financial Inclusion -Related Projects Supported by Selected DFIs in Africa 2000-2013 118 Figure : Distribution of Financial Inclusion -Related Projects Supported by DFIs in Africa , by Instrument Type 119 Figure : Distribution of Financial Inclusion -Related Projects Supported by DFIs in Africa , by Beneficiary Type 120 Figure : Share of African Countries Where the Central Bankis Responsible for Financial Inclusion Topics (%) 130 Figure : Conceptual Framework for an Inclusive Regulatory Strategy 136 Figure.

8 Percentage of Adults with an Account at a Formal Institution 140 BoxesBox : Designing Country Specific Surveys to Measure Financial Inclusion 36 Box : Addressing the SME Barriers IFC Support to Financial Institutions 70 Box : Examples of Women Dedicated Financial Products in Africa 78 Box : Selected VCF Experiences in South Africa 88 Box : Supporting Recovery of Financial Systems in Fragile States 96 Box : Diagnostic Tools for Financial Sector Development 98 Box : Examples of Mobile Financial Service Deployments in Africa 110 Box : Examples of Second Generation Mobile Financial Services 111 Box.

9 Technology and Banking in The WAEMU 112 Box : Priority Objectives of Selected DFIs 117 Box : DFIs Support to Mobile Banking and Payment Systems in Africa 1217 Box : DFIs Investment in Microfinance: An Increasing Focus on Africa 122 Box : Supporting Credit Reporting Systems: IFC s Global Credit Bureau Program 123 Box : Examples of Risk Management Initiatives Supported by DFIs 125 Box : Reconciling Financial Inclusion and Stability: Insights from the South African Experience 133 Box : Offering Savings Products to Low Income Population 141 Box : Examples of Successful Agent Banking Experiences in LAC 143 TablesTable.

10 Examples of Available Supply-Side Data on Financial Inclusion 33 Table : Examples of Available Demand-Side Data on Financial Inclusion 34 Table : AFI Core Set of Indicators 38 Table : G-20 GPFI Financial Inclusion Indicators 39 Table : Cost