Financial Inclusion at a Glance June 2015 Tomás Conde BBVA Chair for Financial Inclusion, IIF Dongyoon Kim Intern, Global Macro Analysis Arpitha Bykere Associate Economist, Global Macro Analysis Felix Huefner Chief Economist, Global Macro Analysis

Financial Inclusion – From Access to Usage Financial Access: The First Step Towards Financial Inclusion (Pages 3-10) Asia is leading the rise in access to financial services, but variation across and within countries remains wide Developed markets dominate traditional banking… …but mobile banking and mobile money accounts are increasing rapidly in Sub-Saharan Africa Trends in Usage of Financial Services (Pages 11-15) Sub-Saharan Africa is on par with high-income countries in using mobile banking… …but cash still dominates transfers in developing countries Financial Inclusion and Financial Sector Development (Pages 16-17) Financial inclusion boosts borrowing and saving in the economy… …and is associated with a rise in the credit-to-GDP ratio LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Asia Leading the Rise in Financial Access 40% of World Population Still Without an Account… …But Rapid Catch-up in Recent Years LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Financial Access is Not Progressing Evenly Within Regions Kenya Remains a Frontrunner… …While Some Other African Countries Lag Behind LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Large Differences in Financial Access Within Countries Slow Reduction in Gender Gap… …But Income Gap Narrowing More Steadily LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Developed Markets Dominate in Traditional Banking Less than 20% of World Population Holds a Credit Card High Debit Card Ownership Leads to ATM Access in High-Income Countries LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Middle East Lags Behind in Traditional Banking Activity Share of Formal Savings in High-Income Countries Nearly Twice the Global Average Share of Borrowers Twice as Large in Latin America Compared to Middle East LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Mobile Penetration Key Tool to Boost Financial Access Mobile Penetration Exceeds Bank Account Ownership in All Regions Sub-Saharan Africa Makes Most Use of Mobile Penetration LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Sub-Saharan Africa Leads in Mobile Money More Than 10% of Population in Sub-Saharan Africa Has a Mobile Money Account… …With Kenya Being the Frontrunner LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Growth in Mobile Money is a Recent Phenomenon Mobile Money Growth has Jumped in Uganda and Botswana since 2011… …But Remains Almost Non-Existent in Indonesia and Argentina LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Traditional vs. Innovative Modes of Usage High-Income Countries Still Dominate in Traditional Banking Usage… …But the Divide is Narrowing for Mobile Banking LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Direct Deposit Services Gathering Pace 8% of Sub-Saharan Population Receives Wages Through Mobile Phone… …But Cash Remains Important for Developing Countries Overall LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Mobile Banking Promoting Account Usage Kenya Ahead of U.S. in Mobile Banking … …With Greece Lagging Far Behind LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Rising Mobile Payment Systems Cash Dominates Domestic Transfers in Most Countries… …But Use of Mobile Phone to Pay Utility Bills is Picking Up LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

High Mobile Money Usage in Sub-Saharan Africa Tanzania and Kenya Lead in Active Mobile Money Accounts… …And in Transactions LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Financial Inclusion Boosts Borrowing and Saving Account Owners Tend to Save More… …And Take Up Mortgages LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Financial Inclusion Contributes to Financial Sector Growth Countries With Higher Account Ownership Experience a Rise in Credit-to-GDP in Subsequent Years LHS: Ask Arpitha Bykere to update T:\GUEST\GlobalMacro\GEM Charts\Quarterly GDP Forecasts\EM Quarterly Growth Forecasts.xls RHS: T:\GUEST\GlobalMacro\Inflation\Inflation_EM.xls & T:\GUEST\GlobalMacro\Inflation\Inflation_G3.xls

Resources World Bank Global Findex Database IMF Financial Access Survey World Bank Development Indicators World Bank Financial Development and Structure Database IIF Coverage on Financial Inclusion: https://www.iif.com/topics/financial-inclusion