1 minute read
Figure X.1: Percentage of Adults with an Account at a Formal Institution
areas (34%), and low-income adult population (25%) (Demirguc-kunt and Klapper, 2012).1 This is consistent with findings from Africa where only 11% of the population at the lowest quartile of the income distribution and 19% of adults living in rural areas have an account at a formal financial institution, compared to a 23% average for the continent.
Countries that have experienced strong economic growth in recent years, such as Brazil, Costa Rica, and Chile, have the largest number of adults with formal accounts; while other countries with slower economic performance, like El Salvador and Nicaragua, are lagging behind (Figure X.1). Haiti counts one of the lowest numbers of low income adults holding an account in the LAC region, which is similar to trends documented in African fragile states. Conversely, Brazil, Costa Rica, and Venezuela have the highest rates of formal banking among low-income adults.
Advertisement
Figure X.1: Percentage of Adults with an Account at a Formal Institution
120 100
Adults (%)
80 60 40 20 0 BoliviaArgentina BrazilChileColombiaCosta RicaEcuadorEl SalvadorGuatemala HondurasHaiti MexicoNicaraguaPanamaParaguayPeruUruguayVenezuela
Total Quintiles I and II
Source: Demirgüç-Kunt and Klapper (2012).
However, having access to formal accounts does not necessarily imply that financial products are actually used. Of the 39% of adults in LAC with an account, only about 30% conduct more than three transactions (deposits and withdrawals) a month, while close to 50% make between one and two transactions a month. An estimated 10% are inactive. Hence, while account penetration in Africa is slightly lower than in LAC, the frequency of account use in both regions is very similar.
Usage data is low both in Africa and LAC, but the limited information available shows that there are many informal financial mechanisms that low-income people use. Interestingly, data from Findex suggest that Africans are slightly better at saving using formal financial institutions with 13% of adults using the financial system to save, compared to only 9.5% of adults in LAC. The
