Slide 1 November 23, GHS - PANEL SURVEY GHS PANEL SURVEY Nigeria Exploring Financial Capability Reserve Bank of India-OECD-World Bank Regional Conference on Financial Education New Delhi, India March Temitayo Adebiyi National Bureau of Statistics, Abuja, Nigeria November 23, 2015

Slide 2 November 23, 2015 Focus Introduction The GHS Panel Survey Why embed Financial Capability into the GHS? Basic Results Plans for the future

Slide 3 November 23, 2015 Introduction The National Bureau of Statistics added the Financial Capability Survey questions to an on-going national household survey, GHS- Panel We seize this opportunity to thank the Russian Trust Fund and the World Bank for the opportunity to carry out this work Data were collected from September- November of 2012 Here we are presenting the preliminary findings

Slide 4 November 23, 2015 General Household Survey- Panel –National survey, sample of 5,000 households and individuals –Multi-topic survey designed to have a robust measure of welfare along with information to understand what affects welfare human capital -health, education productive activities-labor, agriculture, household businesses access to financial services- credit and savings Assets-land, equipment, durable goods –Panel survey: following people (not just households) over time to understand decision-making and how households move in and out of poverty. –Link to a large cross sectional survey to allow imputations on poverty to be made at the state level

Slide 5 November 23, 2015 Innovations  The GHS-Panel has been designed to include space for innovations and experiments New ways of collecting agricultural data Land measurement experiment (GPS) and we are able to carry out pilot survey on Rope and compass Concurrent data entry Tracking method (moved away Households) Eventual move to computer assisted personal information (CAPI) Financial capability

Slide 6 November 23, 2015 Value added from Embedding the Financial Capability in the GHS-Panel Why include the financial capability module in the GHS- Panel instead of doing it as a stand alone survey? Short run: Understand how financial capability is linked to other characteristics of households. The stand alone survey has a quite restricted set of household and individual characteristics; Medium term: –The reason to measure financial capability is that we think it affects welfare--financially capable people are better at managing their money, planning for the future, using financial services etc. The hypothesis is that this translates into better outcomes and less vulnerability. These can actually be assess if we have panel data on individuals.

Slide 7 November 23, 2015 Value added (contd.) Change over time: In all the other countries in this study, the picture we have of financial capability is static- a snap shot. –Interested in looking at the dynamic process: does financial capability change in the short run? at all? –Do all or just some aspects of financial capability improve? –Do improvements in financial capabilities go hand in hand with more education? with certain types of employment? with the expansion of the banking system? etc. –There is an entire policy agenda that a solid panel survey like the GHS can inform. Methodological Interest: As part of the overall work under the Russian Trust Fund on Financial Literacy, Nigeria was able to test how embedding in a larger survey actually works in the field (some lessons learned). The next round of the panel is planned for 2014: funding is not yet in place but there is an expectation that it will be.

Slide 8 November 23, 2015 Financial Capability 2012 in Nigeria (Results) 96% plan how to spend the money they receive, although only 62% always do (65% of men and 59% of women) 92% of people who plan also say they keep to their plans, though only 37% always do (40% of men, 34% of women) Half of the people who run short of money for food and essentials uses credit/borrows to buy them However, at the time of the interview, only 15% had to repay money that they had borrowed Of these, only 7% said that they had borrowed more than they could afford

Slide 9 November 23, 2015 Financial capability result cont. Between 70-75% of the sample knows how much money they have spent in the past 7 days, and knows how much they have available to spend However only 20-25% knows exactly (higher among men) 93% of the sample agrees that they are very disciplined in managing money, but around 30% buys things that they know are not necessary and that they cannot afford – at least sometimes Worryingly, only 16% say they regularly have money left over after spending for food and essentials, and 20% does not have money left over at any time 55% say they even run short of money for food and essentials (regularly or at least sometimes)  The most frequently cited reason is insufficient/low income and/or fluctuating/unreliable income

Slide 10 November 23, 2015 Percentage distribution by sector Here we asked people if plan how they will use money when they receive it. In Urban areas people claim that they do plan, over 70 percent say they always plan how they will use money they receive. In contrast, less than 60 percent of the rural people say they plan all the time and more only plan sometimes.

Slide 11 November 23, 2015 Percentage distribution by head of household A statement was read to the respondent: I am very disciplined when it comes to managing money. And asked them to say whether they agree that the statement describes them or not. Here we look at the question by heads of households and people who are not heads of households. We find out that most people think they are disciplined, but heads of households are more likely to agree strongly (dark green bar) with this statement.

Slide 12 November 23, 2015 Summary These are very preliminary results The next phase is to calculate the overall capability scores Then we will look at how financial capability relates to other characteristics of households And, with your support we will like to include these questions in the 2014 round of the GHS-Panel and thus be able to look at how financial capability and welfare are linked

Slide 13 November 23, 2015 End of presentation Thanks for your attention