ConsumerBehaviorsinBeninAnalysisandFindingsUnitedNa*onsCapitalDevelopmentFund
Background
• UNCDF,FinanceInclusiveetDéveloppementlocal
• MobileMoneyforthePoor• Augmenterl’accèsauservicesfinanciersvial’u*lisa*ondetechnologieetagents
• ProgrammesenOuganda,auMalawi,auLibéria,enZambie,auLaos,auNépal,auSénégaletauBénin
• Plusieursdonateurs,ProgrammeGlobal(UNCDF,Sida,AusAID,Fonda*onGates,Fonda*onMasterCard)
• Alignéaveclesini*a*vesdeUNDPetUNCDFdanslesPayslesMoinsAvancés(PMA),travailledemanièreétroiteaveclesprogrammesconjointsUNCDF/UNDPdeFinanceInclusive
2
Thisreportreliesondatacollectedthroughmixedmethods,bothquan=ta=veandqualita=ve
• Quan*ta*veSurveyconductedonasampleof3,042Benineseaged15+betweenDecember2015-February2016
• Qualita*vestudyconductedthrough:! Focusgroups! Dynamicfocusgroupobserva*oninthreeloca*ons(fourgroupseachloca*on,6to
8par*cipantseach)• Aguegue• Bohicon• Banikoara
! In-depthinterviews(16perloca*on)
• Par*cipantsinclude:! Newusersofdigitalfinancialservices(DFS)! Prospec*veusersofdigitalfinancialservices! MFIusers! Women(foragender-specificapproach)
3
Execu=veSummary
Key Findings
5
• TheBeninesefinancialmarketoffersconsumersdifferenttypesoffinancialservices,includingformalandinformalop*ons.Withinthismarket,25%ofBenineseadultshaveusedaformalfinancialproduct.! Onlyabouttwo-thirdsofformalfinancialproductusageiswithdigitalaccounts(providingsomeformofdigital
access).• While25%haveusedaformalfinancialproduct,just20%ofBenineseadultssaythattheyhavetheirown,registeredformal
financialaccountintheirownname,makingthemfinanciallyincluded.Only11%haredigitallyfinanciallyincluded,meaningtheyhaveafull-servicedigitalfinancialaccount.! Mobilemoney,banksandnonbankfinancialins*tu*ons(NBFIs)alldrivefinancialinclusion,innearequalparts.! Onceaconsumerhasanaccount,theytendtoac*velyuseit.Eightinten(80%)accountholdershaveusedtheir
accountinthepast90days! Thosewhoarecurrentlyfinanciallyincludedaremoreeducated,liveinurbanareasandareemployed.Theyalsoare
ac*velyusingtheiraccounts,sugges*ngapoten*al“earlyadopter”biasamongcurrentusers.• Awarenessofmobilemoneydoesnotconverttoregistereduse.Overhalf(54%)ofadultsknowofmobilemoney,47%are
awareofamobilemoneyprovider,yetonly11%haveusedmobilemoney,with9%havingaregisteredmobilemoneyaccount.
• MoreBeninesearefinanciallyac*vethanhaveformalaccounts,indica*nganeedsgapaswellasinterestsinfinancialmechanisms.! Closetohalfofadultssave47%,eventhoughonly20%haveformalaccounts.Twentypercentofadultsalsohave
borrowedmoney.Muchofthesavingsandborrowinghappensthroughinformalmechanisms.! Informalfinancialmechanismsareusedmorethanformalonesoutoffamiliarity,notduetopreference
Understanding Consumer Needs
6
• Thereisaneeds-basedprogressionwithfinancialservicesthatleadsaconsumertoabankaccount! Consumersstartwithaton*ne,buildinguptoMFIuseandthenmaybehavingenoughofaneedorresourcestouseabank.! Mobilemoneyanddigitalfinancialservicesarenotcurrentlyanexplicitpartofthisprogression.
• Consumershavethreetypesofneedsfordigitalfinancialservices! Circumstan=alneeds:havingaccesstofinancialservices,havingfinancialservicesthatareeasytouseandmatchconsumers’
cogni*veabili*es,andfeelingcomfortableusingtheservice! Financialneeds:thatfacilitatelife,suchassavings,loans,moneytransferandatwilldeposit/withdrawal.Thesefacilitate
businessgrowth,payments,incomesmoothing! Tangibleneeds:fromafinancialproduct,suchasfeesanddeposit/withdrawalamountsthatmatchbudget,incomeand
expensesaswellascustomerserviceduringfirstexperienceswiththeproduct
• ConsumerswhoaremoreawareoffinancialproductsassociatemobilemoneyandDFSwithmee*ngconsumerneedsfromfinancialservices:! Theseinclude:includingspeedandeaseoftransfer,presumedlowfees,andpresumedlowdepositrequirements.
• Buildingmeaningfulawarenessandconnec*ngtheconsumerneedtoDFSisacri*calhurdleforthoseconsumers! Inaddi*ontospeedandeaseofmoneytransfer,feesanddepositrequirementsthatmatchincomestreams,financialsafetyand
securitycanbeausefulhookforshowingDFSvalue.
• Lackofinforma*onchannelsandheavydependenceonpeergroupsposechallengesforincreasingmeaningfulawarenessandknowledge! Consumersingeneralhavelimitedaccesstoinforma*onsources,andthereforerecruitmenteffortsmustconsiderappropriate
messengersforconnec*ngDFSwithaconsumerneed.! Demographicsmaier.Peri-urbanaswellasruralareasstrugglemorewhenitcomestoawareness,knowledge.Youthshow
poten*altobethenexttargetmarketinthecountry.
Main barriers to DFS Uptake
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• TherearetwomaintypesofbarrierstomobilemoneyandDFSinBenin:lackoftoolsandskillsforusingDFS,andlackofknowledgeaboutDFS.
• Lackoftoolsandskills:Therearelimita*onsthatcouldhamperDFSuptake.Theseinclude:! Limiteddiffusionofdevices(75%ofadultshaveaccesstomobilephones,butlessthan66%owntheirownphone)! Limitedliteracy(justover33%areliterate)! LimiteduseofSMS(0nly33%regularlycommunicateviaSMS,whichisalsoacri*calcapabilityforDFSinterac*ons)! Limitedawareness(althoughawarenessofmobilemoneyisover54%,mostconsumersaren’tasfamiliarwithwhat
mobilemoneydoesorhowtouseit.Mobilemoney,acoreDFStool,ismostlyunknownorconsideredtobe“notneeded”intheeyesofconsumers:42%don’tknowwhatitis,17%feeltheydon’tneedit)
• Lackofknowledge:Inaddi*ontolimitedawareness,consumersdonotyethavecore,cri*calknowledgeofDFS.Thisincludes:! Prospec*veusersdonotknowwheremobilemoney(orDFS)agentsarelocated! Theydonotknowenoughabouthowtousetheservice! Theydonotknowaboutservicesrequirements(feesandhowtheprocessworks)! Theseareespeciallylimi*ngformobilemoneyadop*on.! Adop*onofdigitalaccesstofinancialservicesamongcurrentuserscouldincurfewerbarriersbecauseoftheexis*ng
productrela*onship
• Growthinknowledge,awarenessmaycreatenewbarrierstouptake.Onceconsumersknowaboutit,theymaydecidethattheycannotaffordit,ortheircurrentmeansoffinancialaccessismoreaffordable.Thesearebarriersthattypicallyarisewithgreaterknowledgeandexposure,eventhoughtheyarenotcurrentlypresentinthemarketplace! Thismeansthatitisimportantforpro-ac*vemessagingaroundDFSmatchingone’savailableresourcesandincome
streams,toallayanyfuturefearsorcost-basedobjec*ons.
WhatisBeninfinanciallandscapelike?
8
There are a number of different types of financial services in the Beninese market
FormalFullservice
Non-digital
MNOs MFIs
Informal
Notfullservice
Digital
Banks &More
Figuresarecategoricalonly.Asrepresented,theyarenotnotexclusiveofeachotherordrawntoscale 9
Financialservicesuse(Shown:PercentageofBenineseadults,N=3,042)
Digitalusersoffinancialservices(Shown:PercentageofBenineseadultswhohaveusedformalfinancial
services,n=702)
25%Haveusedformal,regulatedfinancial
services
75%Havenotusedformalfinancialservices
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Not all formal financial services are digital
17%Haveuseddigitalfinancialservices
11%haveaDFSaccountintheirownname
8%:Ontu=lisédesservicesfinanciersformels,maisjamaisde
servicesfinanciersdigitaux
!
10
Bankaccountownership(Shown:PercentageofBeninese,n,3,042)
Havefull-servicebank
account,7%
Notregistered,92%
Bank accountholders are active users of their accounts
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).*Appearsthesameasaccountholdersduetorounding
11
39%
60%
Haveabankaccountandamobilemoney
account
Bankaccountandmobilemoneyaccountoverlap(Shown:Percentageofbankaccountholders,n=215)
13%
87%
HaveabankaccountandanNBFIaccount
BankaccountandNBFIaccountoverlap(Shown:Percentageofbankaccountholders,n=215)
Bank account holders tend to have an additional financial mechanism
12
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Benin is a two provider-dominated MNO market with room to grow; over one-third of adults do not yet have their own phone
75%
63%
Haveaccesstoamobilephone
Ownamobilephone
2015(N=3,042)
SIMcardproviders(Shown:Percentageofmobilephoneownersw/atleastonesimcardfrom
provider,n=1,781)
0%
1%
3%
45%
65%
Libercom
BELBenin
GLO
MOOV
MTN
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Reflectsmul*pleSIMcardownership
Mobilephoneownershipandaccess(Shown:PercentageofBenineseadults)
"37%donothavetheirownphone
13
Most individuals with mobile money access are account holders
89%havenomobilemoneyaccess
11%haveaccess
Mobilemoneyaccess(Shown:percentageofBenineseadults,n=3,042)
62%ofmobilemoneyusers
havearegisteredaccount
Registeredmobilemoneyaccounts(Shown:percentageofBeninesewithmobilemoneyaccess,n=306)
9%ofallBenineseadultshavearegisteredmobilemoney
accountSource:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
14
Most accountholders are active users; they are mostly men, above the poverty line, and living in urban areas
Ac=veusedemographicprofile(Shown:Ac=vemobilemoneyusers,n=185)
Men Women Urban
Rural
Abovethepovertyline
Belowthepovertyline
68% 32% 74% 27% 59% 41%
Source:Lesenseignementsdel’inclusionfinancièreauBéninpourleMM4PQrésdel’étudeconduiteparIntermedia(Décembre2015–Février2016surunéchanQllonde3042individusde15ansouplus)
25%ofac*vemobilemoneyaccountholdersareurbanmaleslivingabovethepovertyline.
80%areac*veusers
20%arenotac*veusers
Ac=vemobilemoneyuse(Shown:percentageofBeninesemobilemoney
accountholders,n=232)
15
Approximately one in 10 adults use only informal financial services
16
5%
11%
84%
Useinformalandformalservices FormalusersandnonusersoffinancialservicesOnlyuseinformal
financialservices
Useofinformalfinancialservices(Shown:PercentageofBenineseadults,N=3,042)
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
20%Financiallyincluded*
Profile:Informalusers’demographicsn=365
Above$2.50adaypovertyline 26%
Female 62%
Under35 37%
Rural 52%
Primaryeduca*onorless 82%
Employed 77%
Married 73%
Ownmobile 71%
Advancedphoneuser 36%
Financial inclusion currently reaches 20% of Beninese adults; 11% are digitally financially included.
31.8%ofBenineseadultsreportbeingwithin5KMofamobilemoneyagent,bankingagentorastoreorakioskwithover-the-countermobilemoneyservices
(30.3%ofwomen)
5.5%OfBenineseadultshaveusedsomeformofdigitalfinancialservices
(includingOTC)inthepast90daysbutdonothavearegisteredaccount
(5.5%ofwomen)
RateofBenineseadultswhohaveusedanaccountintheirnameforsomeformofdigitalfinancialservice
(e.g.bankaccountwithdigitalfeatures,e-walletservice,NBFIaccountwithdigital
features)
(6.9%ofwomen)
20%Financiallyincluded*
N=3,042
11.3%Digitallyfinanciallyincluded*
N=3,042
17
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Beninese women lag behind their counterpoints in every financial inclusion indicator
4%Havebankaccounts
9%HaveNBFIaccounts
6%Registered
mm
12%Havebankaccounts
9%HaveNBFIaccounts
12%Registered
mm
84%Financiallyexcluded
76%Financiallyexcluded
18
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
For comparison across Africa and Asia:
Kenya India Tanzania Bangladesh Uganda Nigeria Indonesia Benin Senegal Pakistan
Financialinclusion 69% 65% 62% 43% 39% 37% 24% 20% 15% 9%
Mobilemoney
ownership67% 65% 61% 9% 35% 1% 24% 9% 8% 1%
FullserviceNBFI
ownership11% 9% 1% 24% 6% 3% 3% 9% 4% 1%
FullserviceBank
ownership27% 63% 8% 19% 11% 37% 23% 8% 7% 7%
• Sharedmarketdis*nguishesBeninfromothercountries,mostcloselyalignedwithSenegal
• Somesimilari*eswithBangladeshbecauseallthreeformsofformalaccesshavereach
*Nigeria,Tanzania,Kenya,Indonesia,Uganda,Pakistan,IndiaandBangladeshsta*s*cscomefrom2015FinancialInclusionInsights 19
Howaredifferentfinancialins=tu=onsperceived?
Account holders describe making needs-based decisions on which financial mechanism to use
21
• Someuseton*nesfordailysavingsandincomesmoothing,andanMFIforabusinessloan
• Someusemobilemoneytoconducttransac*onsandanMFIforbusinessloans
• Othercombina*onsexist–somerela*onshipsbecomedormantascapabili*esbegintooverlaporsavingsbecomedepleted
This progression gives consumers more than one financial mechanism, and a choice based on what suits them
22
Ton*ne Mostcommonfinancialtool.Tradi*onalforbuildingprosperityandcommunity
MFIAccustomedtoworkingingroups,borrowingasagroupwithMFIleveragesculturalnorms,buildssavingshabits
BankThosewhohavebuiltsteadysavingsandhealthybusinessesarecomfortableinbanks,wherebalancescanstaysafeandtransac*onsarefacilitated
MFIs help facilitate consumers’ businesses and provide savings accounts
23
WHATPARTICIPANTSBELIEVEMFIsDO• Provideloanstostartand/orinvestinbusinesses
• Providesavingsaccounts
POSITIVEPERCEPTIONS
• Purposeistohelppeoplewithlessaccesstoresources! Areaswheretherearenobanks! Someareforwomenonly
• Securemeanstosavemoney! Savingsdoesn’tgetspent,destroyedor
stolen• Createcommunity
! Manydescribeobtaininga“group”loanwherebandsofwomengetaloantogether
NEGATIVEPERCEPTIONS
• Notalwayseasytosetup,needrequirements
✗ Mayneedini*alamounttoputinsavingsaccount
• Transac*onshaveprotocol✗ Havetosubmitforms
• Canbedifficulttowithdrawmoney✗ Restric*onsonhowmuchcanbe
withdrawn
Tontines can be perceived as untrustworthy but are often the only available option to consumers
24
WHATPARTICIPANTSBELIEVETONTINESDO• Providesmallloanstomemberstohelpwithincomesmoothing,smallbusinessinvestments
• Providesavingsop*onsforton*nemembers,poten*altogainmoney
POSITIVEPERCEPTIONS
• Convenient! Ton*nesarelocallybased,madeupof
neighbors,friends• Communitybuilding
! Ton*nemembersworktogethertoprovideaidinadversityaswellasgrowsavings
! Somedescribeplanningsavingsandincomestrategiestogether
• Sourceofbonusincome! Well-runton*nesprovidememberswith
interestfromthesmallloans
NEGATIVEPERCEPTIONS
• Untrustworthy✗ Somedescribeton*nemanagersashaving
cheatedmembersandmisrepresentedprofits
✗ Othersreportthatsomememberstakeloansandneverrepay,sosavingsarelost
• Notgoodforlargeramounts✗ Loanamountsareowennotenoughfor
significantbusinessinvestments
Banks enjoy respect and trust but are not accessible to everyone
25
WHATPARTICIPANTSBELIEVEBANKSDO• Providesavingsaccountsandtransac*onalaccounts
• Provideloans
POSITIVEPERCEPTIONS
• Secureandtrustworthy! Keepsmoneysafefromthew,
destruc*on,tempta*ontospend• Enabletransac*onsthroughoutBenin
! Merchantswithbusinessinterestsoutsideofvillagecantransactwithbusinessassociatesfurtheraway
• Earninterestonlargeramounts! Savingscanprovideinterestincomeif
notwithdrawn
NEGATIVEPERCEPTIONS
• Inconvenient✗ Branchesmaynotexistinvillage
• Longwaitsinlines✗ Transac*onsrequirevisi*ngabranch,wai*ng
foravailablestaffatacounter• Restric*ve
✗ MusthavegovernmentissuedIDandini*aldepositamountstoopenanaccount
• Networkconnec*onsgodown✗ Manyreportthatbanks’networksare
unreliable,makingtransac*ngwhendesiredunreliable
Even though it is a newer financial mechanism, the benefits of mobile money are known and attractive
26
WHATMOBILEMONEY(MM)DOES• Providesatransac*onalaccounttosendandreceivemoney
• Providesameanstosavemoneydaily
POSITIVEPERCEPTIONS
• Widespreadinterest• Secure
! ManydescribeMMasbeingjustassafeasbankandMFIaccounts
• Fast! Transac*onsareinstantaneous
• Convenient! Youcanperformtransac*onsfrom
whereveryouareandwhereveryourrecipientorsendermaybe
! YoucansavedailywithMM• Noini*aldepositrequirement
! Youdonotneedmoneyonhandtoopenanaccount
NEGATIVEPERCEPTIONS
• Norealobjec*onsornega*vitytowardMM:Nooneruleditout!
• Somerecognizeditisinconvenientforthosenotlivinginareasservedbycurrentmobilemoneyproviders✗ ManydescribethatMMhasnotarrived
intheirvillageyet,buttheyknowit’sinneighboringareas
• Someconcernoverfees✗ Somecomplainedthefeesfor
conduc*ngindividualtransac*onsaretoohigh
Mobile money is not yet part of that progression and instead fulfills a different need
27
Ton*ne,MFI,bankaccounts:! Savingsandloans
! Liquidity
! Incomesmoothing
Mobilemoney:! Geyngmoneyfromoneplacetoanother
quickly,safelyandconveniently(bigdraw)
! Knowledgeofitsfunc*onasasavings
account,lowdepositrequirement
! ThisbodeswellforMFIs,LaPosteconsideringamobilemoneytransfer
Don’thavetowaitinline. –Itissecure. –Allmysisterhastodoiscallme,andIcanjustsendanditgoesover. –Neitherofushavetogetonabus. –
Whatarethemainneedsandaspira=ons?
28
Consumers have four main financial services needs:
• Access to safe, reliable savings
• Access to loans, credit
• Ability to transfer money safely, securely, quickly
• Ability to withdraw and deposit money at will
Factorsintoincomesmoothing,makingpayments,buildingbusinesses,convenientaccess
29
They are also largely dissatisfied with their current financial condition; creating an opportunity for financial services that mitigate that pain point
29%
Comfortablehavingsomedebtinordertoachieve
goals
15%
Havetoomuchdebtrightnow
14%
Buyfromseveralshopkeeperstoensurecreditavailability
Sa*sfied,22%
Neithersa*sfiednordissa*sfied,
19%
Notsa*sfied,59%
2015:Sa=sfac=onwithfinancialcondi=on(Shown:PercentageofBenineseadults,n=3,042)
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
15%
30
The main perceived benefit of saving is the ability to manage emergencies and unexpected expenses
31
• Mostexplainthattheyusetheirsavingsmoreforcoveringsuddenillnesses,accidents,funeralexpenditures
• Nothavingmoneyavailablefortheseunforeseeneventscancreatedisasterforthefamily
• Someexplainthatsavingscanleadtoabeierfutureforthefamilyinthelongterm
Moreover• Savingswillbuildstrongerbusinesses• Savingscanfundeduca*on• Savingscanbuylandandbuildhouses
For the purpose of saving, home building is a top goal
32 Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
1%
2%
2%
4%
6%
8%
8%
17%
21%
21%
Acquiringfurniture
Payingoffadebt
Takingcareofrela*ves
Acquiringsomekindofpersonalassest
Payingschoolfees
Buyingapieceofland
Inves*nginthefarm
Makemoremoney
Growingyourbusinessorafamilymember'sbusiness
Buildingorupgradingthehome
Mostimportantfinancialgoals(Shown:PercentageofBenineseadults,n=3,042)
Sta*cacrossmostdemographics
Separate from mobile money, many would also like to have digital access to tontine, MFI and bank accounts
33
Interestin
MovingmoneybetweenanMFIandbank/mobilemoneyaccount
Accessing MFI through mobile phone
AccessingMFIthroughATM,oronlineinterface
Makingdepositstoanyfinancialmechanismdigitally
Receivingpaycheckdigitally
Receivingpaymentsforservicesdigitally
Paying vendors/suppliers digitally
Note:“digital”referstotheconceptofaccessingcurrencyinaformotherthanactualcashinhand,includingmobilephones,ATMs,directdeposit,agent.Lackofknowledge/exposurelimitedobserva*onsoftruepreferenceduringthisexploratoryphase.
HowreadyisBeninforDFS?
Literacy, SMS experience limit DFS readiness, especially for women…
75%
97%
32%
44%36%
99%
79%
98%
38%
51%42%
99%
71%
97%
25%
38%30%
99%
Accesstophone
ID Beyondprimaryschool
SMSsend Literate Numerate
Popula*on Men Women
FactorsthatcontributetoDFSReadiness(Shown:BenineseAdults,n=3042)
35 Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
… and rural adults
75%
97%
32%
44%36%
99%
84%
99%
45%
57%52%
100%
64%
96%
20%
32%22%
99%
Accesstophone
ID Beyondprimaryschool
SMSsend Literate Numerate
Popula*on Urban Rural
FactorsthatcontributetoDFSReadiness(Shown:BeninseAdults,n=3042)
36
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
For comparison across Africa and Asia:
2015/16: Benin Senegal Indonesia Kenya Nigeria Pakistan India Tanzania Uganda Bangladesh
Accesstoaphone 75% 90% 79% 93% 93% 76% 90% 96% 85% 96%
Havena*onalID 97% 95% 94% 77% 32% 89% 82% 11% 41% 0.6%
Literacy 36% 35% 95% 83% 78% 65% 66% 84% 57% 60%
Numeracy 99% 97% 98% 98% 96% 95% 95% 96% 80% 98%
SMS 44% 64% 69% 75% 80% 40% 38% 78% 47% 37%
BeyondPrimarySchoolEduca*on 32% 29% 60% 47% 73% 46% 58% 24% 39% 49%
• Literacy,loweduca*onaiainmentagreaterissueforBenin• Accesstophonesrela*velylowcomparedtoothercountries
ElementsofDFSReadiness(Shown:Alladultsincountry)
*Nigeria,Tanzania,Kenya,Indonesia,Uganda,Pakistan,IndiaandBangladeshsta*s*cscomefrom2015FinancialInclusionInsights 37
Rural Beninese are substantially more disadvantaged than their urban counterparts; all readiness components are lower among the rural population than urbanites
52%
Demographics/accesstofinance Ruraln=1,936
Urbann=1,106
Abovepoverty 14% 42%
Male 50% 49%
Over35 44% 47%
Primaryeduca*onorless 78% 54%
Involvedinagriculture(farmownerorlaborer)
62% 27%
Accessformalfinancialservices 17% 34%
Accessbank 3% 15%
AccessOTCservices 4% 10%
Accessmobilemoney 6% 18%
AccessNBFI 10% 11%
Rural(Shown:PercentageofBenineseadults,
n=3,042)
38
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
“Readiness” becomes a top need for customer adoption
• It is a pain point for consumers, because they are conscious of their own perceived limitations
• It is a gap in the marketplace, because consumers do not know where to turn to get “ready”
• It is a NEED because consumers feel it will prohibit their own ability to use financial services
• This pertains to new customers, who wonder if they have what it takes to use the product
• This pertains to prospective users, who have not yet opened an account
39
Reflecting the gender, rural lag for phone ownership, these groups also are less likely to use a phone for advanced purposes
40
2015:Advancedphoneusebydemographic(Shown:Percentageofsubgroups)
36%
useamobilephoneforadvanced
func=ons
Totalpopula=on(Shown:Beninesemobilephoneusers,
n=2,130)
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Urban(n=938)
44%
Rural(n=1,192)
26%
Female(n=1,004)
28%
Male(n=1,126)
43%
40
2015:Haveeversentatextmessage(SMS)(Shown:Percentageofmobilephoneusers,n=2,130)
33%financiallyincluded
59% 37%HavenotsentanSMS(SMSincapable)
HavesentanSMS(SMScapable,alladults)
14%financiallyincluded
*AsdefinedinFinancialInclusionsec*on
Consumers with greater mobile phone proficiency are more likely to have financial accounts, particularly mobile money accounts
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
41
Barriersandpainpoints
43
TangibleBarrierstoDFS
• Costofmobilephones• SMSexperience• Distancetoformalfinancialpointsof
service(POS)
Barrierstomobilemoneyinclude:
• NOTknowingwhereamobilemoneyagentis
• NOTknowingenoughabouthowtousemobilemoney
• NOTknowingenoughaboutproductrequirements,includingfeesandhowtheprocessworks
Forprospec*veusers,barriersareaboutawareness,notobjec*ontoservices
44
47%Awareofatleastonemobilemoneyprovider
11%Haveusedmobile
money
Awareness varies according to the region, with lows of 16% and 17% respectively in Atacora and Plateau
Region MobileMoneyAwareness
Alibori 40%
Atacora 16%
Atln*q 53%
Borgou 42%
Collnes 34%
Couffo 61%
Donga 30%
Liiorl 68%
Mono 61%
Oueme 63%
Plateau 17%
Zou 50%
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
[9%havemobilemoneyaccount]
45
Lack of knowledge is a key barrier to having a mobile money account
42%
17%14%
7%5%
2% 2%
Idonotknowwhatitis
Idonotneed,Idonotdo
transac*ons
Idonotknowhowtoopenone
Thereisnoofficeservice/orcaretaker,
Ineverhavemoneytocarryouttransac*on
Idonothaveana*onaliden*tycardorother
Idonotunderstandthatservice;IdonotknowwhatIpe
Reasonsfornothavingamobilemoneyaccount(Shown:thosewithoutamobilemoneyaccount,n=1151)
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
46
Barriers create imperatives for adoption
47
Barriers:Prospec*ve
userswouldliketousemobilemoney,but:
Therearenoagents/outletsintheirarea
Donotfullyunderstandhowinterac*onswork,even
thoughtheyliketheconcept
Areconcernedthatitwouldbecost-prohibi*ve,even
thoughtheyseethevalueinit
Areuncertaintheywillbeabletolearnhowtousemobile
money
"Needaccesspoints,andknowledgeofaccesspoints
"Needtodemys*fytheprocessofmakingatransac*ontobuildtrust
"Needinforma*ononfeestomakethisseemagoodvalue
"Requireassistanceinusingun*lcomfortable
Perceptions around fees: A barrier to customer adoption
48
• Consumersareconsciousofthecostofusingfinancialmechanismsandwhatthe
mechanismyieldsthemforthecost(Bankshavehigherfeesanddepositrequirementstouse,butgiveyouaddedsafetyandsecurityforyourmoney)
• Theycurrentlytalkaboutcostsofusingfinancialservices(ton*nes,MFIs)
conceptually,insteadofinmonetaryunits(CFA)• Forinstance:Imake30depositsintoaTon*neandget29back.Ipayinfor3
monthsandthefourthmonthIcanwithdraw
• Theyarealsoconsciousoftheliabilityofthegroup(ifsomeoneelseinthegroupofaTon*neorMFIdefaults,itcouldhaveimpactonthem).Thisfactorsintotheirconsidera*onofcost
• Consumerslikefortheirmoneytoworkforthem,soanypricingcouldbeevaluatedas“whatamIgeyngforthis?”
Thecostisthereforecalculatedbyconsideringnotonlythefeesoftheservice,butalsothepossiblerisksandthelackofbenefitscomparedtootherservices.Thisiswhypreservingfinancialalterna*vesiscrucial.
There are five hurdles on the path to digital financial services adoption; Technology and Education, in particular, form basis for DFS readiness
AWARENESS• HowawareamIofDFS?• Whatcommunica*on
channelsareavailabletoreachme?
TECHNOLOGY• DoIownaphone?• AmIcomfortablewith
tex*ng?
TRUST• HowmuchdoItrustthe
providersoftheseservices?
• HowmuchdoINOTtrusttheotherservices?
EDUCATION• AmIcomfortableenough
readingwordsandnumberstobeabletousetheservice?
• Howmucheffortwillittaketolearnhowtouseit?
NEEDS• Howsa*sfiedamIwiththe
statusquoofmanagingmymoney?
• HowwellservedamIwithcurrentfinancialproviderstowhichIhaveaccess?
[Hurdlesarefluidandmayfollowadifferentorder] 49
Addressingbarriers,speakingtoneedsbuildstrust
Consumers:
Mightbeunsureofwhethertotrustmobile
money
Donotknowenoughaboutmobilemoney
touse
S*llhaveneedsthatcanbe
sa*sfiedbymobilemoney
50
What is the Role of Social Networks?
51
Financial education and knowledge primarily comes from friends and family
52
2%
1%
1%
30%
31%
35%
Allother(excludingDK/refuse)
MFI
Bank
Myself
Spouse
Family,friends,neighbors
Whodoyoudependonforfinancialadvice?(Shown:PercentageofBenineseadults,N=3,042)
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Prospective users can envision learning about DFS through a friend or family member, or number of different socially-oriented channels
53
AfriendorfamilymemberwhoiscurrentlyusingitintroducesthemtoitMostcommonlymen=onedchannels:• Massmedia• Town-hallstylemee*ngs• Church,thecommunityandleaders• Themayororcommunitychief,butnotthegovernment/authori*es
Offereduplessfrequently:• Door-to-doorbyacommunity-memberproviderrepresenta*ve• Employers• Schools• Electricitycompanies
The significance of social networks in financial practices suggests that various types of mobile money/DFS agents, rooted within the community, can play a key role to build awareness
54
• Mobile,mobilemoney/DFSagent! Bus,vanorsomeformofmobileunitthatcomestoanarearegularlyforcash-in/cash-outorbill-pay! EspeciallyrelevantinAguegue
• Postofficeasanagent! Knownen*tyinthecommunity
• Shopkeepersservingasagents! Shopkeepersoffercredit,informalsavingsop*onsusingmerchandiseascredit! Couldbenaturalsynergies
• Billcollectors,moneylenders,ton*neadministratorsservingasagents! Digi*zingtherela*onshipandpoten*allyaddingmoretransparencyintotheprocess/lessconcern
aboutmoneybeingstolen/lost
• MFIadministratorsasagents! Exis*ngsa*sfac*onwithMFIs,digitalaccesscouldextendtheiru*lity
• U*litycompaniesasagentsorchannelsintoanaccount! Alreadycollec*ngmoneyforservicesthatareessen*alforindividuals
What are the main financial needs?
55
Havetakenloan,19%
Havenottakenloan,77%
Don’tknoworrefuse
3%
5%
16%
16%
17%
19%
32%
38%
Largepurchase(e.g.TV)
Bills
Rou*nepurchases,suchasgroceries
Boostbusiness
Medicalpayments
Educa*onalexpenses/schoolfees
Emergencyexpenses
Investment
Borrowing money is primarily for investment and growth, sometimes for emergencies and routine expenses
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Havetakenaloaninthepast12months(Shown:PercentageofBenineseadultsn=3,042)
Reasonsfortakingaloan(Shown:Percentageofthathavetakenaloanin
thepast12monthsn=527)
56
Consumers have mostly informal lending options at their disposal
Haveyoutakenaloanfromthefollowingins=tu=ons?(Shown:AllBenineseAdults,n=3,042)
Percentageoftotalpopula=on
Familyorfriends 10%
MFI 5%
ASCA/lendinggroup 1%
Informalmoneylender 1%
Bank 1%
SACCO 1%
Shopkeeperletsyoutakecredit 0.22%
Buyerofcrops/harvest 0.16%
Governmentins*tu*on 0.14%
Employer 0.12%
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Formalop*onshalfascommonasinformalop*ons
57
Savings is driven by long term oriented investment and protecting family needs
1%
2%
6%
8%
11%
11%
13%
29%
28%
50%
Givebacktocommunity
Buildchildren'sfriendforwedding
Buildchildren'sfundforeduca*on
Getreadyforre*rement
Buyexpensiveitems
Educa*onforyourself
Protectbelongings
Makeendsmeet
Protectfamilyfrompoverty/crime
Start/expandyourbusiness
Reasonsforsaving(Shown:percentageofsavingadults)
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
58
Financial goals are primarily oriented around investing in future growth or prosperity
1%
2%
2%
4%
6%
8%
8%
17%
21%
21%
Acquiringfurniture
Payingoffadebt
Takingcareofrela*ves
Acquiringsomekindofpersonalassest
Payingschoolfees
Buyingapieceofland
Inves*nginthefarm
Makemoremoney
Growingyourbusinessorafamilymember'sbusiness
Buildingorupgradingthehome
Mostimportantfinancialgoals(Shown:AllBenineseAdults,n=3,042)
Sta*cacrossmostdemographics
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
59
60
LimitedinclusiondoesNOTmeanlimitedfinancialinterest
There is also significant interest in mechanisms that help pay for school fees, and bundled products
2015:Interestinfinancialproducts(Shown:Percentageofadults,N=3,042)
19%
19%
21%
25%
30%
36%
36%
37%
23%
24%
25%
32%
35%
31%
31%
31%
Pre-paidcardforreceivingincome
Pre-paidcardtomakepayments
Mobilemoneyaccountthatcamewithasmartphone
Loanthatcamewithaninsuranceplan
Loanthatcamewithamobilemoneyaccount
Loanthatcamewithabankaccount
Creditplanforschoolfees
Layawayplanforschoolfees
Veryimportant Somewhatimportant
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Schoolfees
Bundledproducts
61
Additionally, women tend to exhibit less demand for financial services, save for a desire to obtain business loans
54%
66%
74%
73%
66%
88%
50%
61%
65%
66%
71%
87%
Bankaccount
Insurance
Savingsaccount
Mobilemoneyaccount
Businessloans
Mobilephone
Women Men
Demandforfinancialservices,mobilephonesamongthosewithout(Shown:Percentageofadults,bygenderandsubgroup)
Theprimaryreasonfornothavingeachoftheseitemsis“donothaveenoughmoney”,regardlessofgender.
62 Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Rural Beninese are not resigned to this gap, though, as they place great importance on financial tools
42%
38%
33%
34%
41%
77%
38%
38%
40%
40%
47%
72%
Bankaccount
Insurance
Loanthatcamewithabankaccount
Layawayplanforschoolfees
Loanforyourbusiness
Mobilephone
Rural(n=1,936) Urban(n=1,106)
Veryimportanttoolsforhouseholds(Shown:Percentageofurban,ruraladults)
52%
Rural(Shown:PercentageofBenineseadults,
n=3,042)
63 Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+).
Consumers have significant needs when it comes to managing money
64
• Focusonhelpinmanagingdailytransac=ons,sendingandreceivingmoney,helpingtosavethroughsmallamounts
• Allowsmall,incremental,and/orinfrequentsavingsdepositsthatmatchthewayinwhichaconsumercansave
• Lowfeesornofees–formalaccountsseemunapproachableiffeestaketoolargeachunkofconsumers’funds
• Convenienceiskey–peoplewanttotransactwheretheyare,whenevertheyneedto
• Keepmoneysafefromcheaters,thieves,accidentsandthetempta*ontospendthrougheasysavingofsmallamounts
BuildingaDFSvalueproposi=onWhatdoesDFSneedtoconveyandtowhom?
Building readiness is key to capitalizing on consumer interest in the marketplace
Readyandinterested,
13% Readyandnot
interested,1%
Notreadyandinterested,
70%
Notreadyandnot
interested,16%
ReadinessandInterestacrossBeninamongtheun-included(shown:noformalaccount)
• ManyBeninesearenotyetreadyforDFS,lackingcri*calcomponentsforuptake.
• Atthesame*me,thereisinterestinmanyofthefunc*onsofDFS,eventhoughformalfinancialaccountownershipisrela*velylowandconsumersdonotconnectformalaccountswithameaningfulvalueproposi*on
• Tobestiden*fybroad-basedgroupstargetgroupsforbuildingavalueproposi*on,wecombinedreadinessfactorswithinterest:
• Readinessfactors:basedoffofhavingsomecombina*onofmobilephone,SMSability,na*onalID,literacyandnumeracy
• Interestfactors:basedoffofques*onposi*veresponsestosomecombina*onof:wouldyouliketouseyourphoneto:paybills,makepurchases,save,takeloans
• Thisshowsthatupto83%areinterestedinthecorefunc*onsthatDFScanoffer,eventhough70%lackvariouscomponentsofreadiness.
Source:InterMediaBeninFinancialInclusionInsightsforMM4P,December2015-February2016(N=3,042,15+). 66
There is DFS opportunity in the gap between what existing financial products offer, and what consumers need or want
67
Exis*ngproductsmostlyoffer:
• Placetosave• Placetogetaloan
• Limita*onsonwithdrawals
• Requirementsondepositamounts
ConsumersALSOneed:
• Waytotransfermoneysafely,securely,affordably
• Op*onsformakingsmallerdepositsandwithdrawals
• Accountswithfees/requirementsthatmatchtheirbudget
ConsumerswouldLIKE:
• Waystotransfermoneydigitally
• Waystopaybillsdigitally
• Waystomakepurchasesdigitally
• Shopkeepers:Waystoacceptpaymentdigitally
!Opportunity
Digital financial services may also address current pain points in financial management
68
PAINPOINT DFSUSECASEDailyincomeistypicallyunstableand
unpredictableDigitalaccountsconnectedtosavingscan
facilitateincomesmoothing
Itisdifficulttosavesmallamountsconsistentlyover*me
DFSpar*cularlysuitedtodailysavingsofsmallamounts
Smallbusinessesneedcashinfusionstogrowandprovidemoreincome
DFSconnectedtoMFIloansmakeaccesseasierandconvenient
Schoolfeescanbedifficulttopayon*meandconsistently
DFSmakespayingforeducaQonwithouthavingtophysicallydeliverpayments,andpoten*allywithasavingsmechanismfor
affordingthefees
Cashsavingsarenotsecurefromthew,destruc*onandtempta*on
DFSprovideinherentlysecuresavingsmechanisms
Savingswithgroupsrequiresrelianceonpoten*allyuntrustworthyindividuals DFSprovidestrustworthytransac*ons
Needtoquickly,easilytransactwithindividualsinotherareasofBenin
DFSfurnishesfasttransac*onstosend/receivemoneytoanyone,anywhere
This suggests five* important elements for a consumer-facing value proposition:
• Easy to use ! Even with limited digital experience
• Facilitates budgeting ! Which addresses a pain point
• Facilitates saving ! Which addresses a need
• Helps support financial stability ! Which is a pain point
• Is meant for people like you ! To bridge the gap between financial mechanism and perception of
needing it
*Addi*onalmodesofresearchmayexpandthislisttoincludeoverfiveimportantelementsand/orrefinementsonthislist 69
There are specific gender-based challenges for women when it comes to financial management and financial services
70
! Herpersonal*meandmoneyarelimited;thisnecessitatesthatshedependonotherpeopleand/orbecomequiteresourcefulinplanning
! Herhouseholddynamicsmayrequirethatsheonlypar*cipatejointlyinfinancialac*vi*es,orberestricted
! Ifshehasanaccount,shemightstruggletokeepitprivatefrommeninthehome,anditmaybecomevulnerabletoaman’shouseholddebt
! Ins*tu*onsmayrequirethatamancosignanaccount! Shemightfeelshehaslimitedfinancialop*onsbecauseofwhatisavailableinher
area,aswellasfeelingcomfortableusingaproductotherthananMFIorton*ne! Communi*esofwomenusingaton*neorMFIcreatea“sisterhood”thatcanbe
verypersuasiveandcomfortableforwomen,makingitdifficultforthemtoprogresstoanotherfinancialproduct
! Shewillexpectandrequiremoreperson-to-personinterac*ontoopenanewaccountandlearnhowtouseit
Imperatives that address challenges associated with fostering greater DFS among women:
71
Gender-basedchallenge Impera=ve
1:Difficultymanaging*meandfinances • Appealtoawoman’sneeds,illustra*nghowDFShelpsinlife.Remember,oneMFIwascreditedwith“helpingmakewomen’slivesbeier.”
2:Threepersonasoffinancialmanagement;independent,co-decide,restricted
• Donotassumeallwomenarerestrictedfromaccessingfinancialmechanisms
3and4.Keepingaccountsprivateinthehome,keepingamountinaccountsprivateathome
• Equipherwithprivacy-protec*ngelementsonheraccount(biometrics,KYCrequirements)
5.Accountpoliciesthatrequireaguarantor • Fosterresponsiblepoliciesandproceduresthatconsideralterna*veguarantors,orofferabenefittothemaleforbeingaguarantor
6.Limitedop*onsbeyondton*nes,MFIs • Womenknowthatmicrofinancehelpsthemspecificallyinwaysthatotherfinancialtoolsmaynot
• Considerdigitalaccesstoton*nes,MFIsasawaytobringherintodigitaltransac*onsusingafinancialmechanismwithwhichsheiscomfortable
• Buildexposuretootherformalfinancialservicesbyillustra*ngthatshecanaccessthese,andthattheyareforher
7.Womenexpectahigh-touchrela*onshipwithherfinancialproduct
• Emanaterecruitment,interac*onofton*nes,MFIswithwomen
Insights and implications What does this mean for next steps?
72
Seven key components will drive recruiting new consumers into DFS accountholders
1. BepreparedtofosterDFSreadiness;manyconsumerslacktherequiredbasicskills
2. DevelopDFSinterfacesthatarecomfortablewiththosewithlowliteracy,numeracy,orwhoaredevelopingreadiness
3. Offerone-on-onesupportthatmirrorsanagent-consumerrela*onshiptopromoteuserskillsandcomfortwithusinganaccount
4. Posi*onaccountsasatoolforkeepingmoneysafeandsecurebuts*llaccessibleforhouseholdneeds
5. Employtargetaudienceplansthataccommodatehardertoreach,typicallyfinanciallyexcludedpopula*ons,suchaslowerincome,ruralresidentsandwomen
6. Cul*vatetheyouthsothattheyenterthefinancialecosystemwithafull-service,digitalaccount
7. Facilitateorevenu*lizemoreformalcommunica*onschannelsfordissemina*onofmessagesaboutaccounts
73
A way forward
74
• However,consumersdonotyetassociateDFSasarelevantmechanismfortheirlives.! Interestintheac*vi*esthatcanbeperformedwithDFS,andinterestinloanand
savingsproducts,issubstan*al(between57%and68%).Atthesame*me,mobilemoney,acoreDFStool,ismostlyunknownorconsideredtobe“notneeded”intheeyesofconsumers(42%don’tknowwhatitis,17%feeltheydon’tneedit).
! Thissuggeststhatconsumersdonotyetrecognizeacorevalueproposi*onforDFS.
! Italsosuggeststhatbuildingoutthedigitalecosystemandinnova*ngonbillpay,merchantpaymentsandsavingsproductswillhavesomerealtrac*ononceconsumersarereadytoadoptDFS.
• Thepoten*alvalueproposi*oncouldpromptadop*onofreadinesselements,suchasphonesandSMS.! Knowingofatoolthatfacilitateslifegoalsorday-to-dayneedsmightbeanudge
towardmobilephoneacquisi*on,SMScapabili*esorIDacquisi*on.! Othercomponents,suchasliteracy,educa*onandnumeracy,willneedtobe
addressedthroughformandfunc*onofspecificDFS,op*mizedforlowliteracy,educa*onlevels.
For more information, contact: Colleen Learch