Case Study: Extending Financial Services Access to More Ghanaians

We use data from the AudienceScapes 2009 survey in Ghana  to identify who is currently left out of the financial system, and how those people can be reached by development organizations seeking to expand access to financial services.

Formal vs. informal banking - a critical distinction

A principle goal of the finance module of the 2009 AudienceScapes Survey in Ghana was to identify which demographic groups are not currently active in the financial sector, in order to assist development organizations as they select priority target populations for communication and outreach efforts. To start out, the AudienceScapes survey first distinguished between formal financial services (such as those provided by commercial banks or credit unions) and informal financial services (such as those offered by local susu or community savings clubs).

This distinction is intended to make the analysis more useful for development agencies that may focus on one or the other type of financial services. For example, Oxfam America tends to support community savings groups, while the African Rural and Agricultural Credit Association works to extend commercial banking to rural areas; of course, some organizations address access to both formal and informal providers of financial services. 

Access to financial services – the demographic view

As might be expected, many of the respondents in lower socio-economic strata said they do not use financial services and have limited access to either formal or informal banking. Women and youth—who might be assumed to also be low-use groups—were only slightly less likely than the national average to have access to financial services (though women were relatively skewed toward informal banking). Women were also more likely to use informal savings accounts than formal ones (Table 1).

Table 1
            

Closer inspection of the survey results for rural residents suggests geography also matters. Residents of more remote and/or rural regions show lower rates of access to and use of financial services than those in less remote or more urban areas. Notably, the relatively remote Northern and Upper East regions have particularly severe gaps in financial services (Charts 1 and 2).

Chart 1
     

Chart 2
         

Even in regions where financial services are widely available, half or more of all respondents said they had not saved or borrowed money in either formal or informal institutions. Thus, access is not the only factor determining whether people use services; both formal and informal financial services still have a long way to go to become attractive to potential customers even where such services are readily available.

These results point to some key challenges for development agencies:

•  making financial services available in regions—and to types of people—where they are currently lacking;
• making those services truly accessible and appealing—a process likely to require intense communication programs detailing the real costs and benefits of saving and borrowing;
•  Reaching women, rural and remote citizens and the extreme poor is likely to be particularly challenging because these groups use media and ICTs less frequently than men, urban residents, and wealthier individuals.

Indeed, people who had not used particular financial services were also less likely to have received information about those services recently (or at all), suggesting a link between the availability of information and use patterns. Causality is unclear, however, because people with no access to or interest in financial services may not want such information, while people who would be inclined to use financial services in any case may seek out information on the topic.

Reaching the “Unbanked”

One area of great interest in development circles is how to make information about finance, and financial services themselves, available to people who have never used or even considered using  them. In the AudienceScapes data, we can separate out “unbanked” individuals as those who said they had never saved or borrowed (from either formal or informal organizations).
In Table 2 below, we compare the sources of financial information for the unbanked to sources cited by  “savers” ( individuals who had saved money with either a formal or informal organization).

To design communication strategies about finance that appeal to this unbanked population, it is also useful to see which information sources they are already using for other types of information, as well as where (and to what extent) they currently hear financial information.

According to the survey data:

• Radio, TV, and word-of-mouth are the best ways to reach the unbanked, but they are currently underutilized for financial information (Table 2).
• Eighty-six percent of the unbanked had listened to the radio for news and information within the last week, 64 percent had gotten news/information from friends and family in the last week, and over half—56 percent—had watched TV for news and information.
• Bankers themselves, who were an important source of information about formal financial services for people who use them, were rarely mentioned as a financial information source by the unbanked (Table 2).
• The results suggest that demystifying financial services, and making experts more accessible to prospective users of financial services in underserved regions or target groups (rather than just those already engaged in banking), may address at least one part of the information gap.

Table 2
           

The implication is that many people who have not used any financial services are nevertheless reachable—for example, a radio announcement repeated for at least one week would probably reach the vast majority of them. This audience is not turning to the radio for financial information, however, some messages might be more successful if they are coupled with other types of programming (such as new bulletins about local events, sports, or even crime) rather than focused solely on less familiar, and potentially more intimidating, financial information.

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