Data Download: Where to Find Multi-Country Data Sources for Access to Finance

June 7, 2009    

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130*

*The number of savings products offered in 25 Asian countries surveyed
by the Asian Development Bank

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Multi-Country Data Sources for Access to Finance

A new CGAP Technical Note reviews multiple country sources of data on microfinance, or access to finance more generally. The survey found data in four broad categories:

 Outreach: How many people have access to finance?
 Getting finance: What financial products are offered to clients, and what hinders access to these offers?
 Using finance: What are customers’ needs? What alternatives do they have? How do they choose among these alternatives?
 Funding microfinance: How do funds flow into the microfinance industry?

Putting these sources together to construct a global view on access to finance is not without its challenges—different data sources target different audiences, or the data are incomplete or aren’t comparable, and so forth. The good news is that this review determined that cross-country data are available for most of the questions asked.

The case of using finance

As a data source for access to finance, most household surveys are limited to identifying households that have some connection to the formal financial system. However, the World Bank’s Living Standards Measurements Survey (LSMS)* and the Inter-American Development Bank’s (IDB’s) Program for the Improvement of Surveys and the Measurement of Living Conditions in Latin America and the Caribbean (MECOVI)** surveys do provide information on credit products—loans, credit cards, overdraft facilities—used by households. And some modules include detailed loan terms (interest, maturity, collateral, documentation requirements) or, alternatively, reasons for denying or not applying for a loan. MECOVI and LSMS also have some indirect information on the use of insurance products, for instance in the form of household expenditure on insurance.

FinMark’s FinScope surveys*** are much broader and provide information on the use of credit, savings, insurance, payments, remittances, and investment products. The surveys also give information on insurance use, disaggregated by insurance product. Meanwhile, the Asian Development Bank has conducted a survey on voluntary savings services that collects basic information on over 130 savings products offered in 25 Asian countries.

A novel approach has been taken by the Financial Diaries study in South Africa, India, and Bangladesh. This survey examines financial management in rural and urban households. The type of data gathered provides information about household demographics, physical assets, typical income and expenditure patterns, historical and current employment, and current and previous use of financial instruments. The information collected is unique in its granularity and richness. Above all, it can help identify questions and frame the sampling of broader cross-country surveys.

National-level insurance penetration and average premium estimates for life and nonlife product categories are available from World Insurance in 2007: Emerging Markets Leading the Way (Swiss Re), which covers 147 countries. The data originate primarily from national supervisory authorities and, in some cases, from insurance associations.

Data on international remittances are available from multiple sources. At the macro level, the International Monetary Fund’s International Financial Statistics (IFS) provides data on net aggregate remittance flows recorded in official trade statistics. The World Bank publishes similar statistics in its Development Indicators. At the market level, Workers’ Remittances to Developing Countries: A Survey with Central Banks on Selected Public Policy Issues (World Bank) constructs remittance indicators from surveys of central banks and financial regulators. And at the household level, the surveys by LSMS, MECOVI, and FinScope all provide indicators of whether households receive or send remittances. Specialized remittances modules in LSMS (Ghana 2006) provide in-depth information on the types of remittance flows, origin/destination information, and use of remitted funds.

A sampling of resources

* LSMS collects household data through multiple-topic questionnaires from nationally representative household samples (1,000–5,000 households) run by local statistical agencies. LSMS was launched in 1980, and so far it has been conducted in 33 countries and is conducted every 1–5 years. LSMS includes questions on consumption, income, savings, employment, health, education, fertility, nutrition, housing, and migration. Cross-country comparisons are difficult because a standard questionnaire is not used. Nevertheless, LSMS is the broadest set of rigorous household-level data available for developing countries.

** MECOVI extracts data from over 400 independent, multipurpose surveys that cover 22 countries in the region. Twelve of these country surveys contain questions that have reasonably high-quality, comparable data on financial access rates. Financial markets and poverty: An inventory of microdata for research about financial markets in Latin America and the Caribbean describes the main findings from MECOVI surveys. Financial Services for the Poor—Household Survey Sources and Gaps in Borrowing and Saving constructs a standard set of access to finance metrics using MECOVI data, analyze how use of formal and informal financial services varies by household income level, and examine the links between entrepreneurship and use of financial services.

*** FinScope surveys cover 14 countries in Sub-Saharan Africa, with sample sizes of 2,000–3,000 households. Unlike LSMS and MECOVI, FinScope focuses on financial characteristics of households and develops comprehensive metrics on the use, access, and attitudes to credit, savings, and other financial products. It also employs a standard survey instrument that facilitates intercountry comparisons. FinScope goes beyond LSMS and MECOVI in that it includes information on differential use of financial services by individuals within the same household. FinScope created a Financial Services Measure, which places individuals in a continuum of degree of financial access and attitude to financial services from those who have full access (the fully banked) through to those who have no access at all. This can be used as a way of segmenting customers on their degree of exposure to financial services.