Capacité financière et inclusion en Haïti : Résultat d'une enquête du côté de la demande

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Financial Capability and Inclusion in Haiti Public Disclosure Authorized Result of a Demand-side Survey © 2019 The World Bank Group 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpreta tions, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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Photo Credits: World Bank photo library and Shutterstock.com Table of Contents Acknowledgements............................................................................................................................................... v Acronyms and Abbreviations ............................................................................................................................ vii Preface................................................................................................................................................................... ix Key Findings........................................................................................................................................................... x Executive Summary ............................................................................................................................................. xi 1. Survey Background and Methodology............................................................................................................ 1 2. Financial Inclusion in Haiti...............................................................................................................................5 2.1 Concepts to Measure Financial Inclusion.......................................................................................................... 5 2.2 Headline Measure for Financial Inclusion.......................................................................................................... 6 2.3 Usage of Individual Financial Products...............................................................................................................7 2.3.1 Usage of Accounts ..........................................................................................................................................7 2.3.2 Remittances and Other Financial Transfers ......................................................................................... 9 2.3.3 Usage of Loan Products .............................................................................................................................12 2.3.4 Other Financial Products ...........................................................................................................................14 3. Financial Capability........................................................................................................................................15 3.1 Knowledge of and Experience with Financial Service Providers ...............................................................15 3.1.1 Commercial Banks........................................................................................................................................17 3.1.2 Financial Cooperatives ................................................................................................................................18 3.1.3 Microfinance Institutions............................................................................................................................18 3.1.4 Mobile Payment Providers.........................................................................................................................20 3.1.5 Money Transfer Operators .........................................................................................................................21 3.1.6 Insurance Companies and Brokerage Houses......................................................................................23 3.2 Knowledge of Financial Concepts .....................................................................................................................23 3.3 Financial Behavior and Attitudes......................................................................................................................29 Table of Contents | I 3.3.1 Attitudes and Behaviors based on Principle Component Analysis................................................30 3.3.2 An Assessment of Individual Dimensions of Behaviors and Attitudes ........................................30 3.3.3 Cross-Country Comparison of Financial Capability Scores ...........................................................34 3.4 Revealed Attitudes regarding Information Seeking and Dispute Handling ..........................................34 3.4.1 Dispute Handling.........................................................................................................................................34 3.4.2 Information Seeking and Media Usage................................................................................................. 37 4. Summary Assessment and Recommendations......................................................................................... 39 References............................................................................................................................................................43 Appendices...........................................................................................................................................................47 A. Cross-tabulation of Financial Inclusion .............................................................................................................. 47 B. Knowledge, Experience and Level of Satisfaction with Different Financial Service Providers ...........49 C. Background Data on Haitian Financial Survey................................................................................................... 5 Box Box 1. Financial Literacy Quiz...........................................................................................................................................24 List of Figures Figure 1: Financial Inclusion in Haiti ................................................................................................................................. 6 Figure 2: Formal and Informal Savings (by gender, urban/rural, and income)..................................................... 8 Figure 3: Aggregated Financial Account Ownership (by gender, urban/rural, and income level)................... 9 Figure 4: Remittance Trends (by gender, urban/rural, income, zone and strata) ............................................. 10 Figure 5: Remittance Channels (by gender and urban/rural) .................................................................................. 11 Figure 6: Client Satisfaction with Remittance Services ........................................................................................... 11 Figure 7: Level of Debt among Haitian Adults ..............................................................................................................12 Figure 8: Level of Confidence in Repaying Debts (% of respondents with debt) .................................................13 Figure 9: Debt Forms and Levels among Haitian Adults ...........................................................................................13 Figure 10: Self-reported Knowledge of Financial Institutions and Products.......................................................16 Figure 11: Awareness of and Experience with Financial Services Offered by Commercial Banks .................17 Figure 12: Client Reasons for Dissatisfaction with Bank Remittance Services .................................................18 Figure 13: Awareness and Experience with Financial Services Offered by Financial Cooperatives..............19 Figure 14: Awareness of and Experience with Financial Services Offered by MFIs............................................19 Figure 15: Awareness of and Experience with Financial Services Offered by Mobile Money Providers ......20 Figure 16: Client-reported Difficulties with Mobile Money Remittances Services.............................................21 Figure 17: Awareness of and Experience with Financial Services Offered by Money Transfer Operators............................................................................................................................................22 Figure 18: Client-reported Difficulties with Money Transfer Operators...............................................................22 Figure 19: Perceived Knowledge of Financial Concepts and Products .................................................................25 Figure 20: Financial Literacy Distribution (by number of correct answers and by financial concept).......25 II | Financial Capability and Inclusion in Haiti Figure 21: Reported versus Actual Financial Literacy...............................................................................................26 Figure 22: Financial Literacy Scores (by income, urban/rural, zone and strata) ..............................................28 Figure 23: Average Financial Capability Scores..........................................................................................................30 Figure 24: Financial Capability Scores ...........................................................................................................................31 Figure 25: Remittance Usage (% of Haitian adults who receive remittances) ...................................................32 Figure 26: Approaches to Dealing with Financial Service Provider Conflicts.....................................................36 Figure 27: Action Taken to Redress Conflicts with Financial Service Providers................................................36 Figure 28: Reasons for Not Solving Conflicts with Financial Service Providers................................................ 37 Figure 29: Media Consumption by Social and Demographic Groups....................................................................38 Figure 30: Estimated Population by Urban/Rural.......................................................................................................51 Figure 31: Estimated Population by Province...............................................................................................................51 Figure 32: Estimated Population by Gender.................................................................................................................51 Figure 33: Estimated Population by Age Group...........................................................................................................51 Figure 34: Estimated Population by Household Size..................................................................................................51 Figure 35: Estimated Population by Education Group...............................................................................................51 Figure 36: Estimated Population by Stable/Unstable Income Groups.................................................................52 Figure 37: Estimated Population by Income Group....................................................................................................52 Figure 38: Estimated Population by Zone ....................................................................................................................52 Figure 39: Estimated Population by Strata.................................................................................................................52 List of Tables Table 1: Comparison between Key Census Characteristics and the Financial Capability Survey Profile... 3 Table 2: Financial Account Ownership in Selected Countries and Regions (2014, 2017)...................................7 Table 3: Cross-country Comparison of Financial Literacy Scores......................................................................... 27 Table 4: Main Identified Financial Components from PCA Analysis......................................................................29 Table 5: Cross-country Comparison of Financial Capability Scores.....................................................................35 Table 6: Financial Inclusion Summary by Social and Demographic Factors ...................................................... 47 Table 7: Awareness and Experience with Financial Services Offered by Financial Institutions....................49 Table of Contents | III Acknowledgements This Financial Capability and Inclusion Survey Report builds on the results of a survey that was carried out with the support of the World Bank’s Strategic Research Program on Finance for Poverty Reduction and Shared Prosperity. The report was prepared in the context of the program for “Increasing Access to Financial Services in Haiti”, supported by the Financial Sector Reform and Strengthening (FIRST) Initiative. The survey was prepared by a team led by Juan Buchenau (Senior Financial Sector Specialist) and Luis Trevino (Financial Sector Specialist) from the World Bank Group’s (WBG) Finance and Markets Global Practice. The survey was adapted to the Haitian context by Luis Trevino and Fares Khoury (Economist and President of the Economic Study Council [Étude Économique Conseil], EEC Canada) and tested in the field by the Canadian survey firm EEC Canada. EEC also launched the final survey between September 2016 and March 2017 in Haiti. The analysis of the results and preparation of the report was done by Ilka Funke (Financial Inclusion Specialist, Consultant, GFMDR) and Fares Khoury. The graphic design of this document was performed by Aichin Jones and Amy Quach. The team would like to express its deep appreciation to the Haitian authorities, in particular the Central Bank of Haiti (Banque Centrale de la République d’Haïti) (BRH) and the Haitian Institute of Statistics and Informatics (l’Institut Haïtien de Statistique et d’Informatique) (IHSI), for their cooperation and collaboration during the preparation and implementation of the survey, as well as for the feedback they provided regarding the results. The team is also grateful for the valuable support provided by Minah Je and Justin Archer (Consultants, World Bank, GFMDR) and Lina Wedefort (Economist, EEC Canada), as well as to EEC Canada’s core and field team, led by Isabelle Leyder (Deputy Project Director of the survey). Furthermore, the team would like to thank Emilie Bernadette Perge, Siegfried Zottel and Bilal Husnain Zia (all of the World Bank) for their valuable peer review comments on the report. Finally, a special thanks goes to Nicolas Megelas, (Country Manager at EEC Canada), as well as all supervisors and enumerators whose efforts and commitments made this project possible. Finally, the team wishes to express its sincere appreciation to all the Haitian women and men who patiently responded to the survey. Acknowledgements | V Acronyms and Abbreviations AML/ CFT Anti-Money Laundering/Combating the Financing of Terrorism ATM Automated Teller Machine BRH Central Bank of Haiti (Banque Centrale de la République d’Haïti) CAPI Computer-assisted Personal Interview EA Enumeration Area FC Financial Cooperative FIRST Financial Sector Reform and Strengthening Initiative FIU Financial Inclusion Unit (within the Central Bank of Haiti) FSP Financial Service Provider GSMA Global System for Mobile Communications HTG Haitian Gourdes IFAS Inclusive Finance Advocacy Staff IHSI Haitian Institute of Statistics and Informatics (L’Institut Haïtien de Statistique et d’Informatique) KYC Know Your Customer LAC Latin America and the Caribbean MFI Microfinance Institution MFS Mobile Financial Services MTO Money Transfer Operator NFIS National Financial Inclusion Strategy NGO Non-governmental Organization NSCI National Saving and Credit Institution PAP Port-au-Prince PCA Principal Component Analysis PPS Probability Proportional to Size PSU Probability Sampling Unit RN National Road Network (Route Nationale) WBG World Bank Group Acronyms and Abbreviations | VII Preface Financial capability, as defined by the World Bank Group (WBG) in this report, is the capacity to act in one’s best financial interest, given socioeconomic and environmental conditions. It encompasses knowledge (literacy), attitudes, skills and behavior of consumers with respect to understanding, selecting, and using financial services that fit their needs (World Bank 2013a). Improving financial capabilities has become a priority for policy makers seeking to promote financial inclusion, financial stability and the smooth functioning of financial markets. Today people are required to take increasing responsibility for managing a variety of risks over their life cycle. Those who make sound financial decisions and who effectively interact with financial service providers are more likely to achieve their financial goals, hedge against financial and economic risks, and improve their household’s welfare. All of this supports economic growth. Boosting financial capability has therefore emerged as a policy objective that complements governments’ financial inclusion and consumer protection agendas. To this end, policy makers are increasingly using surveys as diagnostic tools to identify financial capability areas that need improvement, as well as vulnerable segments of the population that could be targeted with specific interventions. In response to a request from the Central Bank of Haiti (Banque Centrale de la République d’Haïti) (BRH), the World Bank has conducted a Financial Capability and Inclusion Survey. The BRH has identified the low levels of financial capabilities and financial inclusion as priority areas for reform. This survey constitutes a key diagnostic tool that aims to guide the authorities in developing a detailed implementation action plan for improving financial capability and inclusion levels. Moreover, it will help the authorities set quantifiable and concrete targets to update the National Financial Inclusion Strategy, evaluate supply side reforms, and assess the effectiveness of future financial capability enhancing programs. The report covers three main areas: Chapter 1 provides a brief overview of the methodology used and the composition of the sample. Chapter 2 then assesses the level of financial inclusion in Haiti, including a more detailed look at the uptake of individual products, and Chapter 3 assesses varies aspects of financial capability in Haiti. This includes the population’s knowledge of financial service providers, their level of financial literacy (that is, their understanding of financial concepts such as inflation, interest rates and risk diversification), as well as underlying skills and attitudes that influence the financial behavior of the population. Finally, Chapter 4 summarizes the findings and makes recommendations for the development of an action plan for financial education. This plan would be developed and implemented as part of the National Strategy for Financial Inclusion, and will take ongoing financial education measures into account. Preface | IX Key Findings Source: World Bank Financial Capability and Inclusion Survey, Haiti (2017) Note: MFI = microfinance institution; PAP = Port-au-Prince. X | Financial Capability and Inclusion in Haiti Executive Summary The government of Haiti has a strong focus on expanding the breadth and depth of financial inclusion. In 2013, it launched a National Financial Inclusion Strategy with the objective of increasing access to responsible financial services. The strategy is currently under implementation. This Financial Capability and Inclusion Survey aims to inform the implementation of the National Financial Inclusion Strategy and to support the development of targeted financial education measures. The survey was launched between September 2016 and March 2017. The sample of 3,000 Haitian adults is nationally representative with regard to gender, urban / rural, and level of connectivity to national roads. The survey include]]s questions to measure the actual level of financial inclusion of the population, and to assess their financial capabilities with regards to knowledge, skills, attitudes and behaviors. Through this, it aims to (i) provide baseline data for the implementation of the Financial Inclusion Strategy, (ii) identify gaps in financial capabilities that need to be addressed through financial education measures, and (iii) verify supply side gaps that need to be tackled. Level of financial inclusion in Haiti Account ownership has increased in the last few years, with 27.5 percent of Haitian adults having a financial account in 2017. Based on the survey results, 21.5 percent of Haitian adults have a savings or checking account at a bank or financial cooperative, and 14.3 percent have a mobile account through which they can conduct financial services from their cell phones. Those who are not financially included say that the main reason is that they are not able to afford a financial account, with 34 percent of Haitian adults indicating not having enough money for an account, and another 15 percent indicating that an account is “too expensive”. Financial account ownership is generally correlated with people’s income level, type of employment and location. Adults with a savings or checking account live mostly in urban areas (36.8 percent for Port-au-Prince compared to 12.1 percent for rural, non-connected areas) and belong to the highest income bracket (30.3 percent compared to between 12.9 to 21.8 percent for the other income brackets). Women are less likely to have an account (with 18.5 percent compared to 24.3 percent for men). Similar results were obtained for mobile accounts. Few people confirm being able to save, with only 15 percent of Haitian adults reporting the ability to do so. The savings of urban residents are usually held in formal accounts. By contrast, informal methods still play an important role in rural areas. Around 35 percent of the adult population confirm sending or receiving remittances, with remittances being channeled mostly through money transfer operators (MTOs). Overall, 17 and 22 percent of Haitians report periodically sending and receiving remittances, respectively. Remittance senders are usually located in Port-au-Prince and locations connected to the national road system, whereas remittance receivers 1 The Global Findex Database for 2014 indicates that 18.9 percent of the population has a financial account, of which 17.5 percent are with a bank or financial cooperative. However, the data is not fully comparable, as the Global Findex Dataset uses as a base adults aged 15 and older, whereas the Financial Capability Survey is based on a sample of adults aged 18 years and older. Executive Summary | XI mostly live in rural and unconnected areas of Haiti. Whether financially included or not, most people still send or receive remittances via money transfer operators (with 62 percent for senders, and 53 percent for receivers). In rural areas, informal methods for receiving the funds also play a large role (for 40 percent of receivers). Although almost half of the Haitian population currently has some form of loan, only 10 percent of adults have a loan from a formal financial service provider. Borrowing money is particularly prevalent in rural and unconnected areas, where over 60 percent of adults report having a loan. Debt levels appear elevated. For example, 37 percent of people in the lowest income quartile report debt equivalent to 2-12 months of income, and another 23 percent report debt equivalent to over 12 months of income. The borrowing needs are mostly met through informal sources. Regarding formal loans, banks mostly cater to people in urban areas and with higher income levels, whereas financial cooperatives and microfinance institutions tend to reach people with lower income levels in peri-urban and rural areas. Uptake of insurance and investment products is low. It is largely limited to people with a higher income and those living in urban areas, particularly in Port-au Prince. Financial capabilities Ascertaining adequate financial capabilities among the Haitian population is important for increasing access to financial services in a responsible way. New and existing clients need to have knowledge about service providers and their products. They also need to have an understanding of basic financial concepts, as well as appropriate attitudes and financial behavior to select and use financial services in a responsible manner. In this context, the survey identifies substantial gaps in all dimensions of financial capabilities in Haiti. The Haitian population’s awareness and experience with financial service providers varies greatly. People are mostly aware of commercial banks, MTOs and mobile payment service providers (at 94, 87 and 73 percent, respectively). However, there is a lack knowledge about financial cooperatives, microfinance 2 These are service providers who offer mobile accounts. institutions (MFIs), insurance companies and brokerage houses (at 40, 13, 20 and 10 percent, respectively). People who have a higher awareness are predominantly adults with a higher income, residing in Port-au-Prince. Although two-thirds of users report being satisfied with the received financial services, the survey reveals important shortcomings in terms of quality of service, liquidity management and availability of information from service providers. Satisfaction with the received service is the lowest for MFIs and MTOs (at 51 and 59 percent, respectively), whereas financial cooperatives and insurance companies both reach client satisfaction levels of over 90 percent. The level of financial literacy among Haitian adults also shows substantial gaps. Haitian adults generally know about interest and exchange rates (96 and 84 percent, respectively). However, people in rural areas with lower income levels admit to not being familiar with concepts such as insurance, inflation and stock shares (35, 26, and 26 percent, respectively). However, the perceived knowledge and de facto understanding of concepts vary markedly. When given a standard financial literacy test, people were only able to correctly answer 3.6 of the 7 questions, with vast gaps noted in the ability to calculate simple interest or compare bargains. Low levels of financial literacy are prevalent in rural and unconnected areas of the country and among people with lower incomes. Yet, many people did understand the impact of inflation. It should also be noted that even those financially included adults still lack basic skills, with over one-third showing vast gaps in knowledge, as well as differences in their perceived and de facto knowledge. There are also substantial deficiencies regarding attitudes and behaviors toward financial management and services. Although many people monitor their expenses and plan how to spend their available funds, the level of detail about the planning and the adherence to the plan is uneven. Gaps in planning and adherence are more visible in urban and connected areas and among people with a higher income level, where people have more spending choices and options to generate additional income. Overall, though, people do not feel that they can put money aside for future expenditures XII | Financial Capability and Inclusion in Haiti because they struggle to cover the basic needs. This is particularly the case in rural areas, where people lack additional income-generating sources and are subject to volatile incomes. At the same time, people admit to a lack of discipline when it comes to managing money and controlling expenditures. Sixty-two percent of adults report occasionally buying unnecessary items before having covered their essential expenses. As a result, less than one-third of adults who had an upcoming large expenditure were prepared to cover it, and few have put any funds aside to support themselves in old age. Thus, despite a general, positive attitude toward savings and a tendency to plan expenditures, people have a strong inclination to live for today and not plan for the future. Finally, the survey also reveals a passive attitude toward dispute handling and information seeking. Only 25 percent of users of financial services who had a problem with the service actually tried to resolve it. The remainder did not trust the available dispute resolution mechanisms, or they lacked information about where to go. A similar passive attitude was noted among those who did not yet experience a problem. Core recommendations that emerge from the survey results: Recommendations Responsible* Time Frame** Supply-side reforms Conduct supply-side mapping. BRH (FIU) ST Build the capacity of non-bank agents and employees of financial institutions to enhance service quality. Financial Service Providers On an ongoing basis Enhance transparency of information at financial service points. Financial Service Providers On an ongoing basis Strengthen the availability of information about dispute resolution mechanisms. Financial Service Provider, BRH MT Demand-side reforms Conduct focus groups to complement quantitative research with qualitative information. BRH, donors ST Develop core messages for financial education that can be used across programs. BRH (FIU), donors ST Develop a Financial Education Strategy. BRH (FIU), stakeholders ST / MT Regulatory reforms Mandate regular reporting to the BRH by service points and publish information. BRH (FIU) MT Issue consumer protection regulations to foster disclosure and transparency of information about financial services, as well as responsible market conduct. BRH MT Donors and NGOs Support the development of a Financial Education Strategy. Donors, NGOs ST / MT Integrate financial education measures into ongoing work programs. Donors, NGOs MT Where possible, channel financial support through the financial system. Donors, NGOs MT Note: * FIU = Financial Inclusion Unit (within the BRH); FSP = Financial Service Provider; NGO = non-governmental organization; ** LT = long term (over 2 years); MT = medium term (6 months to 2 years); ST = short term (within 6 months). Executive Summary | XIII 1. Survey Background and Methodology Expanding the breadth and depth of financial inclusion is a priority in Haiti. In recent years, Haitian authorities have made considerable efforts to develop and implement measures to increase access to financial services among the Haitian population. The efforts are carried out as part of the National Financial Inclusion Strategy (NFIS), which the Haitian government formulated in 2013 with World Bank support. The NFIS focuses on five main pillars: (i) the availability of responsible financial services to facilitate inclusion and poverty reduction; (ii) access to credit to foster economic growth; (iii) improved geographic access to financial services; (iv) enhanced financial education and consumer protection; and (v) strengthened financial infrastructure and institutions. In particular, the NFIS targets vulnerable groups such as smallholder farmers, women, migrant workers, and Haitians living in remote areas.3 The National Financial Inclusion Strategy is currently being updated. The Haitian Financial Capability and Inclusion Survey aims to shed light on the level of financial inclusion in Haiti, as well as constraints to financial capabilities that hinder the uptake of financial services from the demand side. National Financial Inclusion Surveys allow for the analysis of the level of financial inclusion in a population; how the uptake of financial products varies across population segments; and the degree to which saving, borrowing, and making payments is being channeled through formal financial service providers. Regarding demand-side reforms, the financial capability-related questions also help to further the understanding of: (i) the population’s knowledge of financial concepts and products; (ii) attitudes, skills and behaviors related to financial services and their providers; and (iii) the day-to-day management of resources, planning for the future, and staying informed. As for supply-side reforms, the survey provides valuable insights into the usage, value and limitations of existing financial services from a customer’s perspective. It also reveals general perceptions about financial institutions and products in a given country. Taken together, the findings from financial capabilities and inclusion surveys help to: (i) identify population segments that are currently not adequately financially included; (ii) design reforms and projects to address the gaps from both the supply and demand sides; and (iii) set national financial inclusion targets using the survey results as a baseline. The questionnaire used for this survey has been tested in the context of middle- and low-income countries, and customized to fit the specific context of Haiti. The survey is based on a questionnaire originally developed for low- and middle-income countries with support from the Russia Financial Literacy and Education Trust Fund.4 Where necessary, the list of financial products or service providers was adapted to the local context of Haiti. Furthermore, personal and household income ranges were adapted to Haitian levels, and the main status of household members considers three new options 3 Central Bank of Haiti, National Strategy of Financial Inclusion (Banque de la République d’Haïti, “Stratégie Nationale D’inclusion Financière”), 2013. 4 Extensive qualitative research techniques were used to develop this general survey instrument, including about 70 focus groups and more than 200 cognitive interviews in eight countries. These research techniques were used to identify the concepts that are relevant in middle- and low- income settings, and to test and adapt the questions to ensure that they are well understood and meaningful across income and education levels. The instrument has been or will be used in 14 countries in Arica, East Asia, Latin America, Africa, the Middle East and the Pacific. 1. Survey Background and Methodology | 1 to differentiate farm employees or self-employees from those whose main activities are not related to the agricultural sector. Since remittances play a considerable role in Haiti, the Haitian questionnaire also includes four new segments to record remittance trends (including the frequency of sending and receiving remittances, purposes, channels and levels of satisfaction with these channels). The survey is representative of the active population, and was applied to 3,000 adults between September 2016 and March 2017.5 Probability-sampling techniques were used to select the 3,000 surveyed adults, using data from the Haitian Institute of Statistics and Informatics (IHSI).6 The population was divided into 6 strata. Communal sections were identified as rural or urban according to the IHSI and then characterized by their degree of connectedness to the national road network (RN) in Haiti (Connected (RN) and Not connected). Port-au-Prince remained in a category of its own and formed a separate stratum. The survey itself was implemented through computer-assisted personal interview methods (CAPI). To ensure high data quality and avoid common errors associated with paper-and pencil surveys, an electronic version of the questionnaire (including internal consistency tests) was programmed, and the survey was administered using power personal computers (PCs). The non-response rate was low at around 5.1 percent of the total sampled households due to extensive efforts and strategies used.7 The individual respondents within households were selected through a three-stage cluster sampling. The communal sections were randomly selected as primary sampling units (PSUs) with probability proportional to size (PPS, that is, the number of households) at the first stage. They consisted of a selection of 200 primary sampling units to reach the sample target. In 5 This includes the population aged 18 and older. each selected PSU, a listing of households was taken, from which 15 households were randomly drawn and targeted for surveying at the second stage. This choice of having 15 randomly drawn respondents instead of 20 per Enumeration Area (EA) reduced the possible clustering effect even further. Finally, within each selected household, eligible adults either responsible for personal or household finances were randomly drawn by means of the Kish grid. Individual weights were then calculated and used in the ensuing analysis to adjust for varying probabilities of selection (design weights). The respondents of the survey have the following key demographic characteristics (see also Annex C): 40 percent of the surveyed adults live in urban areas, with the remaining 60 percent living in rural settings. Slightly less than half of the respondents are female (48 percent). All individuals were also ranked by their reported household income and divided into four groups: 25 percent of the population fall within the lowest income segment (up to 10,000 Haitian Gourdes [HTG] per month); 25 percent in the second-lowest quartile (between 10,001 HTG and 19,200 HTG); 25 percent in the second highest (between 19,201 HTG and 35,700 HTG); and 25 percent in the highest income quartile (more than 35,700 HTG). Forty-seven percent of the surveyed adults are younger than 35 years of age, 37 percent are between 35 and 55 years of age, and 16 percent are older than 55 years of age. In terms of educational attainment, less than 1 percent of the respondents have some or have completed tertiary education (including other higher education); about 23 percent have some or have completed secondary schooling; 53 percent have some or have completed primary or informal education; and around 24 percent of the surveyed adults have no schooling at all. The average number of adults per household is two, whereas the average sized household is comprised of four people. 6 The sampling frame for the Financial Capability and Inclusion Survey in Haiti was extracted from the report entitled “Total Population, Population 18 Years and Older, Households and Estimated Densities in 2015” published by the Haitian Institute of Statistics and Informatics. (note de bas de page: la formation des agents de recensement, par exemple, sur le refus de stratégies de reconversion, la communication avec les répondants pour les informer de l’enquête à venir mais également pour expliquer les objectifs de l’enquête, allant jusqu’à 5 tentatives de prise de contact à différents moments pendant la période de l’enquête, etc.) (“Population Totale, Population de 18 ans et plus, Ménages et Densités Estimés en 2015” published by the “Institut Haïtien de la Statistique et d’Informatique. (IHSI).” This report used results from the 9th Haitian Census of Population and Housing as well as short- (2014), medium- (2000 to 2015) and long-term (1950 to 2050) population projections from IHSI and the Economic Commission for Latin America and the Caribbean. This information was used to estimate total population (by gender), the adult population, density and the number of households by communal section. A presentation on the survey methodology can be found in Appendix E. 7 This includes the training of enumerators on refusal conversion strategies, communication with respondents to inform them of the coming survey, as well as explaining the survey’s objectives. Up to 5 contact attempts were made at different moments during the survey period. 2 | Financial Capability and Inclusion in Haiti As shown in Annex C, 39 percent of the respondents live in households with one to three members; 43 percent of households are comprised of four to six members; and 18 percent live in households with 7 or more members. About 33 percent of respondents live in the metropolitan zone of Port-au-Prince; 34 percent live in zones with access to national roads; and the remaining 33 percent live in non-connected zones. The survey results of the Financial Capability and Inclusion Survey were extrapolated to match the key characteristics of Haiti’s population. As Table 1 presents, there are minor differences between Haiti’s population distribution and the extrapolated population from the survey (all household members are considered). The analysis uses the term “respondents” whenever the survey results were not extrapolated. Table 1: Comparison between Key Census Characteristics and the Financial Capability Survey Profile Country Demographic IHSI Financial Capability Survey Gender distribution Male 49.6% 49.3% Female Area distribution 50.4% 50.7% Urban 51.9% 51.4% Rural 48.1% 48.6% Households per Stratum Rural - Port-au-Prince (PAP) 0.9% 0.9% Urban - Port-au-Prince (PAP) 24.2% 24.3% Rural - Connected (RN) 17.6% 17.7% Urban - Connected (RN) 16.5% 15.9% Rural - Non-connected 29.9% 30.0% Urban - Non-connected 11.0% 11.2% Sources: Republic of Haiti, Ministry of Economy and Finance, Haitian Institute of Statistics and Informatics, Total population 18 years and over, households and densities estimated in 2015 (“République d’Haïti, Ministère de l’Économie et de Finances, Institut Haïtien de la Statistique et d’Informatique, Population totale de 18 ans et plus, ménages et densités estimés en 2015”), and WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: The variables used to generate the indicators included in the Tables and Figures of this report are extracted from the survey questionnaire presented in Appendix F. They are listed by Table and Figure in Appendix G. 1. Survey Background and Methodology | 3 2. Financial Inclusion in Haiti 2.1 Concepts to Measure Financial Inclusion Financial Inclusion, as defined by the World Development Report 2014 (World Bank 2013a), relates to the share of individuals and firms that use financial services. As Financial Capability and Inclusion Surveys focus only on individuals, the report uses as its definition for financial inclusion “the share of individuals that use financial services”. To assess the level of financial inclusion, the World Bank Group generally uses two concepts: • As a narrow financial inclusion indicator, the share of the population with a formal financial account is used. This includes checking and/or savings accounts at commercial banks and financial cooperatives, as well as mobile accounts.8 Through these accounts, people can carry out transfer and bill payments, receive payments, as well as store/save funds for future expenses or emergencies. This indicator is used as a core indicator in the Global Findex Survey of the World Bank, and allows for the comparison of account ownership across countries worldwide. • As a broad financial inclusion indicator, the share of the population with a formal account or a loan from a formal financial service provider is used. In addition to the narrow indicator, this also includes those people who have a credit card or a loan/mortgage from a formal financial institution such as licensed banks, financial cooperatives, microfinance institutions, and other formal lenders. The measurable level of financial inclusion is not identical to the share of the population that could access financial services. As highlighted in the Global Financial Development Report (2014), people can have access to affordable financial services, but decide not to use them for cultural or religious reasons, or because they do not see a need for them. The share of the population that voluntarily excludes itself from using financial services is difficult to measure, but financial capability assessments can shed some light on underlying misperceptions about financial products and cultural issues. On the other hand, there are those that are restricted in their access to financial services because (i) they do not have a financial services provider in reach (lack of geographical access); (ii) they cannot afford the available products (lack of affordability); and/or (iii) they cannot bring the necessary documentation or fulfill other requirements (lack of eligibility). Where possible, the discussion about the uptake of financial services will try to shed light on voluntary exclusion and de facto gaps in financial access. 8 In the Haitian context, “mobile accounts” refers to mobile wallets, such as “Mon Cash” of Digicel / Sogebank, and “Lajan Cash” launched by the National Bank of Credit (Banque Nationale de Credit), as well as other existing mobile accounts that are being used to pay bills or make financial transactions via cell phones. 2. Financial Inclusion in Haiti | 5 2.2 Headline Measure for Financial Inclusion Based on the survey results, 27.5 percent of the population currently has a financial account.9 In terms of type of account, 21.5 percent of Haitian adults reveal having a savings or checking account at a bank or a financial cooperative. Figure 1A shows that a small fraction of these account holders also has a debit card (5.1 percent of Haitian adults), and over one-third of the people with a savings/checking account also indicate having a mobile account (8.3 percent of Haitian adults). Another 6 percent of Haitian adults reveal having a mobile account, but no checking or savings account at a bank or financial cooperative. This indicates that mobile accounts have helped to reach hitherto unbanked segments of the population. The level of financial inclusion in Haiti does not deviate between the narrow and broad financial Figure 1: Financial Inclusion in Haiti inclusion indicator, as all respondents with a lending product also have a savings, checking or mobile account. Figure 1B shows that 10 percent of Haitian adults indicate having a loan, mortgage or credit card from a financial institution. As a loan in Haiti usually requires cash collateral, all borrowers are required to have a formal financial account in which the cash collateral is stored. The uptake of individual products will be assessed in more depth in the next chapter (2.3) With regard to the number of financial products used by Haitians, 10.6 percent of adults have one financial product, 9.5 percent have two, and 7.4 percent have more than two financial products (see Figure 1C). None has more than 5 financial products. Those with only one financial product are mostly holders of a mobile account (6 percent of Haitian adults “only” have a mobile account), again reiterating the important role that mobile accounts can play in fostering financial inclusion. A. Haitian Adults with a Financial Account B. Type of Financial Product held by Adults Mobile account 10 6.4 Checking or savings account at a bank or financial cooperative 25 21.4 20 15 10 5 14.3 10 3.2 1.9 6 0 Debit Card Checking and savings accounts Loans at formal financial institutions (including mortgages, loans, credits cards and Mobile account C. Number of Financial Products held by Haitian Adults 5 2.2 0.2 0 0 9.5 10.6 72.5 Source: WBG Financial Capability and Inclusion Survey (2017). Note: FC = Financial Cooperatives; MFI = microfinance. 0 products 1 product 2 products 3 products 4 products 5 products 6 products 7 products 18.1 34.5 MFI or FC loans) 8.2 0.8 0 0 38.5 1 product 2 products 3 products 4 products 5 products 6 products 7 products 9 Financial accounts in this report refers to checking, savings or mobile accounts held at formal financial institutions. 6 | Financial Capability and Inclusion in Haiti Given the recent increase in the level of financial inclusion, Haiti is now in line with the average level of financial inclusion in other low-income countries. A comparison of the results of the Financial Capability and Inclusion Survey (2018) and the Global Findex Survey (2014) shows that the sha