In Côte d'Ivoire, Financial Inclusion at a Crossroads

For many years, Côte d'Ivoire has lacked reliable data to measure its progress toward financial inclusion. However, CGAP’s Financial Inclusion Insights (FII) 2018 survey — the results of which are now available — and the 2017 Global Findex paint a more detailed picture than we’ve had before. They show that the country has made substantial progress on financial inclusion, with 41 percent of adults now owning an account — an increase of 21 percent since 2014. But they also show that significant challenges remain, particularly when it comes to ensuring excluded groups have the digital and financial skills to take advantage of digital finance.

Woman on bicycle in Cote d'Ivoire
Woman on bicycle in Cote d'Ivoire. Photo by Rajesh Bhattacharjee, 2014 CGAP Photo Contest.

Mobile money is driving overall progress in financial inclusion

Côte d’Ivoire’s progress has been driven entirely by mobile money. From 2014 to 2017, access to financial institution accounts stagnated at 15 percent according to Findex. Yet the share of adults with a mobile money account rose by at least 40 percent. Between 34 and 38 percent of the adult population had a mobile money account in 2017 — the highest rate in the West African Economy and Monetary Union. As a result, most Ivorians who access formal financial services today do so via mobile money. Almost all adults using financial services from traditional financial institutions (banks and microfinance institutions) also use mobile money. A mere 2 percent of the financially included are not using mobile money, and just 11 percent of adults are using only informal financial services like rotating savings and credit associations or money guards.

Most Financially Included Ivorians Access Financial Services through Mobile Money. Source: CGAP Financial Inclusion Insights Survey.

Mobile money is reaching marginalized groups, but gaps remain

Nearly 44 percent of Ivorian adults have never used formal or informal financial services, and these numbers are higher for historically disadvantaged groups, including women, the poor and people in rural areas. Mobile money is emerging as an equalizing force and helping such groups gain access to financial services. While the gender gap in access to financial institutions grew by 90 percent from 2014 to 2017 due to an absolute decline in access among women, the gender gap on mobile money decreased by 35 percent. That said, inequality on mobile money remains. Men are still 65 percent more likely to have an account than are women.

Likewise, gaps between the poor and nonpoor are declining but are still significant. Access to any type of financial account has grown 3.5 times faster among the poorest segments of the population, cutting the income-based access gap in half. This is partly driven by a 17 percent decrease in the use of bank accounts by wealthier segments, which may show that financial institutions do not offer enough value to this category of the population either. Interestingly, the poor’s access to financial institution accounts has grown even faster than access to mobile money. Nevertheless, just 11 percent have a financial institution account, and poor people are four times more likely to have a mobile money account.

Use remains a challenge

Unfortunately, greater account ownership has not translated into use of formal savings, credit and insurance products. This is partly because most mobile money services still offer “first generation” products, such as money transfer, airtime top-up and bill payments. However, the mobile money account has come to be used as a safe place to store money in addition to send remittances. FII data show that three in four adults (75 percent) reported saving money of which 27 percent use their mobile money account for that purpose.  One in five adults — more than 50 percent of mobile money customers — use their accounts for saving, which at the time of the survey did not include options for earning interest on deposits. In fact, a mobile money account is the second most common form of saving after cash. However, 84 percent still save cash at home.

Access and use of credit and insurance products are low. According to FII data, 34 percent of adults have ever borrowed outside the household, and at the time of the survey only 2 percent of them had an ongoing loan with a bank or with a formal or informal non-bank financial institution. Only 8 percent of adults have insurance — medical insurance being the most common. Formal financial institutions still have a long way to go to offer financial services and modalities of delivery that can meet the needs of the diverse segments of Ivorian adults. Again, mobile financial services may prove powerful: Digital credit products appeal to people, and 60 percent say they would try them if they were available.

Are we seeing a widening digital divide?

In many ways, Ivorian adults have the prerequisites to start using mobile money, as many have identification documents and mobile phones. However, half of the population does not have basic numeracy skills or any ability to navigate a phone menu or send text messages. This matters because people with basic digital skills, for instance, are up to four times more likely to have a mobile money account and are significantly more likely to use their accounts. With mobile money’s rise, we may be seeing the emergence of a digital divide, in which systematic differences in basic digital skills entrench differences in financial access. This should be a policy priority for the Ivorian government, which could consider making basic digital and financial skills part of the core curriculum for primary school students.

Consumer protection should also be a priority. Only a third of adults are considered financially literate by the FII survey, meaning that they are vulnerable to buying products they don't understand, being taken advantage of by unscrupulous providers and being preyed on by fraudsters. As the range and variety of products expand, not least including digital credit, it will be important to ensure new consumers’ rights are protected. Consumer protection should, therefore, rise high on the policy agenda.

Côte d’Ivoire appears to be at a crossroads in its financial inclusion journey. On one hand, the growing popularity of mobile money raises the possibility of a digital divide that may put at a disadvantage those with lower digital skills, including women and rural populations. On the other hand, the stagnation of account ownership at financial institutions over the past four years and even the decrease in the use of bank accounts by wealthier segments indicate that traditional financial institutions may be losing their relevance. This situation should lead these providers to question their current strategies. Concerted actions by all stakeholders, including regulators and policy makers, will be necessary to remove current barriers and overcome the challenges of tomorrow.


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