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ThedynamicsoffinancialinclusioninEthiopia

Diversifyingdeliverychannels,expandingdigitaltechnology,andenhancingfinancialknowledgeforgreaterfinancialinclusion

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ThedynamicsoffinancialinclusioninEthiopia

Diversifyingdeliverychannels,expandingdigitaltechnology,andenhancingfinancialknowledgeforgreaterfinancialinclusion

Recommendedcitation

Yonis,ManexB.;Ambel,AlemayehuA.;DiSalvo,FrancescoandRawlins,MarlonR.(2024).ThedynamicsoffinancialinclusioninEthiopia:Diversifyingdeliverychannels,expandingdigitaltechnology,andenhancingfinancialknowledgeforgreaterfinancialinclusion(English).Washington,D.C.:WorldBankGroup

Contents

Abbreviations vii

Acknowledgements vii

Overview viii

Thedynamicsoffinancialinclusion xi

Transitioningfrombeingunbankedtobanked xv

Narrowingthegendergap xviii

Expandingfinancialinclusion:broaderpolicyoptions xxi

Chapterone:Introduction 2

Chaptertwo:Understandingthedynamics:goingbeyond

bankaccountownership 8

Measuringfinancialinclusion 9

GlobalFindexindicators:Financialaccessanduse 10

Indexoffinancialinclusion 11

Evolutionoffinancialinclusion 15

Growthinaccountownership 15

Theriseofformalsavingsandstagnationinformalborrowing 18

Spatial-temporalevolutionofIndexofFinancialInclusion 21

Chapterthree:Pathwaystofinancialinclusion 24

Correlatesoffinancialinclusion 28

Enteringthefinancialsystem:Gatewaytechnologyandfinancial

knowledgeaspillars 33

Opportunitiestoboostfinancialinclusion 41

Chapterfour:GendergapinfinancialInclusion:trend,

explanation,andbridgingthedivide 46

Explainingthegendergap 50

Bridgingthegendergapandfosteringfinancialinclusion 52

Chapterfive:Summaryandprioritypolicyactions 58

References 62

Annexes 66

Annex1.AdditionalInformationonMeasurementsandScores 67

Enumerationarealevelfinancialknowledgescore 67

Annex2.AdditionalDescriptiveStatistics 68

Annex3.AdditionalRegressionResults 71

Annex4.AdditionalFigures 80

iii

ListofFigures

FigureO.1Accountownershipgrew,butlagscomparedtoregionalandglobalcomparators,

2011-2023 xi

FigureO.2Educationcorrelateswithowninganaccount,overtime xii

FigureO.3Thepoorinruralareasremainsbehind xii

FigureO.4Thepersistenceofgapsofaccountownershipdiffersbygenderandagegroup xiii

FigureO.5Theshareofadultssavingformallyincreased,overtime xiv

FigureO.6Formalborrowingisdecreasingovertimeregardlessofplaceofresidence xiv

FigureO.7Movementintobankedstatusfrom2019to2022 xv

FigureO.8Movementfromsavinginformallyintosavingformallybetween2019and2022 xv

FigureO.9Accountownershiptrajectoriesandindividualcharacteristics xvi

FigureO.10Accountownershiptrajectoriesandfinancialknowledge xvi

FigureO.11Banksarethemainfinancialaccesspointsfornewentrants xvii

FigureO.12Paymentsarethroughcash,2022 xvii

FigureO.13GendergaponaccountownershipinRural-Urbancontext,overtime xviii

FigureO.14Whatdrivesthegendergap?Socioeconomicstatusin2022 xviii

Figure1Accountownershipgrew,butrankslowestcomparedtoneighboringcountries,

2011-2023 15

Figure2aAccountownershipatindividualandhouseholdlevel,overtime 16

Figure2bAccountownershipbyplaceofresidence,overtime 16

Figure3aRural-Urbangapinaccountownership,bywealth,overtime 17

Figure3bAccountownershipbygender,overtime 17

Figure4aAccountownershipbyage,overtime 18

Figure4bAccountownershipbyeducation,overtime 18

Figure5aSavingatformalinstitutionsbyplaceofresidence,overtime 19

Figure5bGendergapinsavingatformalinstitutions,overtime 19

Figure5cSavingfrequency,overtime 19

Figure6aHouseholdaccesstocreditbyplaceofresidenceandwealth,overtime 20

Figure6bSourceofloanbyplaceofresidenceandwealth,overtime 20

Figure7aEvolutionofindexoffinancialinclusion(IFI),overtime 22

Figure7bEvolutionofleveloffinancialinclusion,overtime 22

Figure7cDistributionoffinancialinclusionindex,overtime 22

Figure7dDistributionoffinancialinclusionindexatworedalevel,overtime 22

Figure7eDistributionoffinancialinclusionindexinruralareas,overtime 23

Figure7fDistributionoffinancialinclusionindexinurbanareas,overtime 23

Figure7gEvolutionoffinancialinclusionacrossregions,overtime 23

Figure8aCorrelatesofaccountownershipin2019and2022 28

iv

Figure8bCorrelatesofaccountownershipbyplaceofresidence,2019and2022 29

Figure9aEducationeffectofaccountownershipbygenderin2019 30

Figure9bEducationeffectofaccountownershipbygenderin2022 30

Figure10aMobilephoneownershipeffectonaccountownershipbygenderin2019 31

Figure10bMobilephoneownershipeffectonaccountownershipbygenderin2022 31

Figure11aProximitytofinancialinstitutionandaccountownershipbygenderin2019 32

Figure11bDistancetonearestfinancialinstitution(Median) 32

Figure12aAccountownershiptrajectoriesandindividualcharacteristics 36

Figure12bAccountownershiptrajectoriesandfinancialknowledge 36

Figure12cAccountownershiptrajectoriesbyregion 37

Figure13aAgeandsexareassociateswithenteringthefinancialsystem 38

Figure13bEducationmatterstoescapefrombeingunbanked 38

Figure14Mobileownershipplaysagreatroletoacceleratefinancialinclusion 38

Figure15aFinancialknowledgefacilitatesthemovetowardsfinancialinclusion 39

Figure15bFinancialknowledgegapbetweenurbanandruralareasin2019 39

Figure16Proximitytoformalfinancialinstitutionsmatterstoescapeunbanked 40

Figure17Newentrantshavealow-levelfinancialinclusion 41

Figure18aBanksarethemaingetwaytothefinancialsystem 42

Figure18bSavingisacommonlyusedproductbynewentrants 42

Figure19aHouseholdsandindividualsreceivepaymentsthroughcash,2022 43

Figure19bAccountholdershardlyusedigitalmechanismstomakepayments,2022 43

Figure20Gendergapinfinancialinclusionlevelincreased,overtime 48

Figure21GendergaponaccountownershipinRural-Urbancontext,overtime 49

Figure22Gendergapinaccountownershipregioncontext,overtime 49

Figure23aLackseducation,bygender,overtime 50

Figure23bEmployedadultbygender,overtime 50

Figure23cMobileuse,bygender,overtime 50

Figure24aFinancialknowledgedistribution,bygender,2019 51

Figure24bFinancialknowledgedistribution,bygender,2022 51

Figure25aCounterfactualdensityestimation,2019 57

Figure25bCounterfactualdensityestimation,2022 57

FigureA.1Accountownership,bywealth,overtime 80

FigureA.2Useoffinancialservicesbyaccountholders,overtime 80

FigureA.3Mobilephonepenetrationbygender,location,overtime 80

FigureA.4Usageoffinancialinstitutionsovertime 80

FigureA.5Usageoffinancialinclusionbyplaceofresidence,overtime 81

FigureA.6Ageandgendereffectonaccountownershipin2019 81

FigureA.7Ageandgendereffectonaccountownershipin2022 81

v

ListofTables

TableO.1Decompositionofthegendergapsinaccountownership xx

Table1Profileofindividualrespondents,overtime 27

Table2Accountownershiptransitionmatrix 34

Table3Fairliedecompositionofthegendergapsinaccountownership 56

Table4Oaxaca-Blinderdecompositionofthegendergapsinfinancialinclusionindex 56

TableA.1Accountownershipbyregion,gender,placeofresidence,2019and2022 68

TableA.2Accountowningindividualsandfinancialinstitutionsbyregion,genderand

placeofresidence,2022 69

TableA.3Individualandhouseholdsavingbehaviorbyregion,gender,placeofresidence,

2019and2022 69

TableA.4Accesstoloanandsourceofloanbyregion,placeofresidenceandwealth,

2019and2022 70

TableA.5Estimatesforprobitmodelonaccountownership 71

TableA.6Estimatesforprobitmodelonaccountownershipforurban-dominatedregions

andotherregions 72

TableA.7Estimatesfororderedlogitmodelonleveloffinancialinclusion 73

TableA.8Linearregressionestimatedresultsonaz-scoreoffinancialinclusionindex 75

TableA.9Estimatesforlogitregressiononmovingoutoffinancialexclusion 76

TableA.10Estimatesfordecompositionanalysisongendergapsinaccount

ownership,2019 77

TableA.11Estimatesfordecompositionanalysisongendergapsinaccount

ownership,2022 78

TableA.12EstimatesforOaxaca-Blinderdecompositionanalysisongendergapsinfinancial

inclusion,overtime 79

ListofBoxes

Box1TheNationalFinancialInclusionStrategy 4

Box2DefinitionsandMeasuresofvariables 12

Box3Estimatedmodelstoexaminethecorrelatesoffinancialinclusion 26

Box4Robustnesscheck 32

Box5Transitionmatrix,financialknowledgeindex,andmodelestimation 34

Box6Comparisonbetweenthosewhoremainedunbankedandthoseabletoenterthe

financialsystem 36

Box7Decompositionanalysiscombiningwith2SLSregressionmethod 53

vi

Abbreviations

ESPS

EthiopianSocioeconomicPanelSurrey

ESS

EthiopianStatisticalService

HGERA

Home-GrownEconomicReformAgenda

IFI

IndexofFinancialInclusion

LFI

LevelofFinancialInclusion

LFMS

LaborForceandMigrationSurvey

LSMS-ISA

LivingStandardsMeasurementStudy–IntegratedSurveysonAgriculture

MFIs

MicrofinanceIntuitions

NBE

NationalBankofEthiopia

NFIS

NationalFinancialInclusionStrategy

POS

PointofSale

PSNP

ProductiveSafetyNetProgram

SACCOs

SavingandCreditCooperatives

SDG

SustainableDevelopmentGoal

Acknowledgements

ThereportwaspreparedbyManexBuleYonis(Economist),AlemayehuA.Ambel(SeniorEconomist),FrancescoDiSalvo(SeniorFinancialSectorSpecialist)andMarlonRolstonRawlins(SeniorFinancialSectorSpecialist).Theteamalsobenefitedfromfeedbackfrompeerreviewers:OyaPinarArdicAlper(SeniorFinancialSectorSpecialist),HeatherG.Moylan(SeniorEconomist)andTewodrosTassewKebede(FinancialSectorSpecialist).

ThisreportleveragesthedatafromtheEthiopiaSocioeconomicPanelSurvey(ESPS),whichisbeingimplementedbytheEthiopianStatisticalServicesince2011/12,withtechnicalsupportfromtheWorldBankLivingStandardsMeasurementStudy(LSMS)program.GenerousfinancialsupporttothesurveywasreceivedfromtheBillandMelindaGatesFoundation.

vii

Image:©i_am_zews/S

Overview

Ethiopia’sHome-GrownEconomicReformAgenda(HGERA)emphasizesfinancialinclusionasoneofthekeyenablingconditionstofosterthecountry’sinclusivegrowthandeconomicdevelopment.TheNationalFinancialInclusionStrategy(NFIS-II)laidthegroundworkforsignificantregulatoryandfinancialinfrastructureimprovements,aimingforgreaterfinancialinclusion(NBE,2021).Thestrategyemphasizesleveragingnewopportunitiesandenablersemerginginthecountry’ssocial,economic,andpoliticallandscape,suchastherapidgrowthofmobilephoneusageandtheincreasingavailabilityofdigitalfinancialservices,toscaleaccountownership.Italsofocusesondeepeningfinancialinclusionbymakingcredit,savings,andinsuranceaccessibleforthosealreadyinthefinancialsystem,aswellasfornewentrants.Itemphasizesexpandinggenderandrural-poortailoredfinancialservicesandproductsasanintegralelementoftheexpansionstrategy.

Thisfinancialinclusionstudyseekstoinformhowthecountrycanexpeditenationwideintegrationintotheformalfinancialsystemtobenefitfrompovertyreduction,equality,andotherrelevantreformsundertheHGERA.Financialinclusion,anextensiveconcept,referstoaccesstoanduseofaffordablefinancialproductsandservicesandparticipationinthefinancialmarket.Accountownershipisnotjustastep,butacrucialgatewaytobroaderfinancialinclusion.Gainingdevelopmentoutcomesrequiressimultaneouseffortstowardspromotingaccesstoafinancialaccountandrealizingthebenefitfromitsservices,suchassavings,credits,andinsurance(Demirgüç-Kuntetal.,2017;Demirgüç-Kuntetal.,2022).Also,goingbeyondgender-neutraltogender-intentionalfinancialservicesandproductsisakeypillarofwomen’sempowerment(Hendriks,2019;Fieldetal.,2021;Arshad,2023).Thus,theinclusionofdiversepopulationgroupsinthefinancialsystempromotesgenderequality,catalyzesinclusiveandresilientgrowth,andenhancessocialwell-being,thusunderliningthebroaderimpactoffinancialinclusion.

ix

ThedynamicsoffinancialinclusioninEthiopia

Toidentifypolicyoptionsforgreaterfinancialinclusionofindividuals,thereportimplementsananalyticalframeworkwiththreefeatures.First,thestatusanddynamicsoffinancialinclusionofindividuals,inthecontextofgenderandspatialdisparitiesinthesocioeconomiclandscape,isexaminedindetail.Thepurposeistobetterunderstandhowfastthefinancialinclusionrateevolvesacrossdifferentgroupsandgeographicalspheresandwhoremainsbehindovertime.Second,emphasisisplacedonidentifyingandunderstandingthefactorsthatexplainthedynamicsoffinancialinclusion,howthesefactorshaveevolvedovertime,howthenewentrantshaveperformedinthefinancialsystem,andthenatureofthechannelsthroughwhichthenewentrantsaccessthefinancialsystem.Explainingthefactorsholdingindividualsbackfromenteringandbenefitingfromthefinancialsystemfromadynamicperspectiveprovidesevidence-basedpathwaystogreaterfinancialinclusion.Third,agendergapisestimated,andeffortsaredirectedtoexplorewhatexplainsthegendergapbyzoominginonhowhumancapitalendowment,resources,andeconomicopportunitydefinethegaps.

Disaggregatedstatusanddynamicsupdatesandadeepunderstandingofthefactorsthatfosterfinancialinclusionandnarrowthegendergapareessentialforpolicymakersandpractitionerstogaugetheireffortstowardsdisadvantageousgroups,addressingstructuralimpediments,andcapitalizingonnewopportunities.Thereportidentifiesthreebroadpolicyoptionstopromoteanddeepenfinancialinclusion,anchoringontheprecedinganalyticfarmwork:

•Diversifyingentrychannelsbyovercomingconstraintssuchasdistance,time,cost,quality,andproducttypehurdlesandexploitingopportunities;

•Expandingdigitaltechnologythatcanoffermoreopportunitiesforpreviouslyunbankedpeopletoaccessandusefinancialproductsandservices;

•Enhancingfinancialknowledgethroughfinancialeducationprogramsathigherschoolsandfinancialliteracytrainingatthecommunity-level.

x

Overview

Thedynamicsoffinancialinclusion

Overthelastsixyears,theshareofadults(age18andabove)whoownafinancialaccountgrewsubstantially.Accountownershipnearlydoubled,from23%in2016to41%in2022.However,comparedtoneighboringcountriesandtheaverageofSub-SaharanAfricancountries,Ethiopiarankslowestintermsoftheshareoftheadultpopulationincludedinthefinancialsystem(FigureO.1).In2022,Ethiopiawas14percentagepointsbelowthe2021averagerateoftheSub-SaharanAfricancountries.Onaverage,accountownershipincreasedby35%everythreeyears.Thegrowthrateishigherthanthatofregionalandglobalcomparatortrends;onaverage,financialinclusiongrewonlyby27%inSub-SaharanAfricancountriesandby14%indevelopingcountriesoverthelastsevenyears.

FIGUREO.1

Accountownershipgrew,butlagscomparedtoregionalandglobalcomparators,2011-2023

PROPORTIONOFINDIVIDUAL(%)

100

90

80

70

60

50

40

30

20

10

0

DEVELOPINGCOUNTRIESSUB-SAHARANAFRICAETHIOPIA

2014

2011

2017

2016

2019

2022

2021

Source:Authors’estimatesfromESPSandFindex.ThecomparatorcountriesandregionalandglobalratesarederivedfromtheFindexdataset.TheEthiopianaccountownershiprateisestimatedusingtheESPSdata,astheentirenarrationofthereportisbasedonthisdata.BasedontheFindexdata,in2022,accountownershiprateis46%inEthiopia.

xi

ThedynamicsoffinancialinclusioninEthiopia

Accountownershipremainslowamongwomen,lesseducatedadults,andtheruralpoor.In2022,almostmorethanhalfofthemanadultpopulationownedafinancialaccount,whileonly30%ofwomenadultshaveanaccount.Educationdrivesaccountownership;in2022,94%ofadultsabovesecondaryeducationlevelownanaccount,whileonly25%ofadultswithnoeducationhaveaccesstofinance(FigureO.2).Similarly,theincidenceofaccountownershipincreasesalongthewealthdistributionovertheyears.However,theevolutionoffinancialinclusionamongtheruralpoor(thebottom40%)isweakerthanthatofothergroups,astheshareofthesehouseholdsinthefinancialsystemremainslowbetween2019and2022(FigureO.3).Thisimpliesthatthesystemleavesthemostdisadvantagedgroupsbehind.

FIGUREO.2

Educationcorrelateswithowninganaccount,overtime

100

PROPORTIONOF

INDIVIDUALS(%)

90

80

70

60

50

40

30

20

10

0

201620192022

Primary

Secondary

Abovesecondary

Noeducation

Source:Authors’estimatesfromESPS.

FIGUREO.3

Thepoorinruralareasremainsbehind

PROPORTIONOF

INDIVIDUAL(%)

100

90

80

70

60

50

40

30

20

10

0

Middle

RURAL

Middle

RicherRichest

PoorestPoorer

RicherRichestPoorestPoorer

URBAN

2019

2022

Source:Authors’estimatesfromESPS.

xii

Overview

Despitetheprogressinfinancialinclusion,thegendergappersistedandeven

doubledbetween2016and2022.Itgrewfrom10percentagepointsto21percentagepoints,andthegappersistedacrossallagegroups.Itincreasedacrosseveryagecategorybetween2016and2022;mainlyalmostdoubledamongyoungmen,thosebetween18and24,andamongolderwomen,those56andolder(FigureO.4).Regardlessofthepositiveevolutionacrossallagegroups,however,theagegapbetweentheyounger(18-24)andtheolder(25-55)adults,remainshighamongmen.Forexample,itwas22percentagepointsin2016and20percentagepointsin2022,whileitremains6and5percentagepoints,respectively,amongwomenoverthesameperiod.

FIGUREO.4

Thepersistenceofgapsofaccountownershipdiffersbygenderandagegroup

PROPORTIONOFINDIVIDUALS(%)

100

90

80

70

60

50

40

30

20

10

0

Ages[18,24]

Ages[18,24]

Ages[25,55]FEMALE

Ages(+55)

Ages(+55)

Ages[25,55]MALE

2019

2016

2022

Source:Authors’estimatesfromESPSandFindex.

xiii

ThedynamicsoffinancialinclusioninEthiopia

Ariseinsavingsatformalinstitutionsandlackofprogressinborrowingare

trendsthatsimultaneouslyoccurredovertime.SavingsatformalinstitutionsinEthiopiagrewfasterthanregionalandglobalcomparatoraverages.InEthiopia,itincreasedfrom18%in2016to24%in2022,whileitremains,onaverage,23%indevelopingcountriesand16%inSub-SaharanAfricanregions(FigureO.5).Incontrast,formalborrowingremainslimitedinthecountry,anditisgettingworseovertime.In2022,onlyabout3%ofadultsreceivedloansfromformalfinancialinstitutions(FigureO.6).

FIGUREO.5

Theshareofadultssavingformallyincreased,overtime

25

PROPORTIONOF

INDIVIDUALS(%)

20

15

10

201420162017201920212022

Ethiopia

Developing

Sub-SaharanAfrica

Source:Authors’estimatesfromESPSandGlobalFindex.

FIGUREO.6

Formalborrowingisdecreasingovertimeregardlessofplaceofresidence

PROPORTIONOF

INDIVIDUALS(%)

5

4,5

4

3,5

3

2,5

2

1,5

1

0,5

0

201620192022

Rural

Urban

Country

Source:Authors’estimatesfromESPS.Weassume

thathouseholdmembersmanagedtheloansarethebeneficiariesoftheloansobtainedbythehousehold.

Progressinfinancialinclusionisunderway,andanimprovementinthemultidimensionalnatureoffinancialinclusionalsomanifeststhis.Acomprehensivemeasureoffinancialinclusionrevealsthattheprogressofincludingmoreadultsintothefinancialsystemcanbedirectlyattributedtopositiveevolutionsacrossall

Woredas,particularlyamongpeopleinruralareaswhohavesuccessfullymovedintothe

financialsystembetween2016and2022.Notably,thedeepeningoffinancialinclusionisup-and-coming,astheshareofadultswhoaccessfinancialservicesandproductsbeyondowningaccountsincreasedfrom20%in2016to29%in2022.

xiv

Overview

Transitioningfrom

beingunbankedtobanked

Understandingthenatureofmovingoutoffinancialexclusionandthepossiblechannelsthatcanledthepreviouslyunbankedpopulationtoenterthefinancialsystemisnecessarytothemonitoringofexistingpoliciesandstrategiesandredefiningthembasedonpresentopportunities.Between2019and2022,about20%oftheunbankedpopulationenteredthefinancialsystem,24%inurbanareas,and19%inruralareas(FigureO.7).Itisasignificantachievement,thoughtwo-thirdsoftheruralpopulationremainedunbanked.FigureO.8alsoshowspositivedynamicsinsavingatformalfinancialinstitutionsamongadults,whichalsoshedslightontheprogressoffinancialinclusionovertheyears.About24%ofurbanand13%ofruraladultsstartedsavingformallybetween2019and2022.Despitetheprogress,eightoutoftenruraladultsmaintainedinformalsavings,whileonlyabouthalfoftheurbanadultsdidthesame.

FIGUREO.7

Movementintobankedstatusfrom2019to2022

15

PROPORTIONOF

INDIVIDUALS(%)

19

56

24

67

20

URBAN

RURAL

UB

BB

UU

Source:Authors’estimatesfromESPS.

UUreferstothosewhoremainedunbanked,UBreferstothosewhotransitionedtobanked,andBBreferstothosewhoremainedbanked.

FIGUREO.8

Movementfromsavinginformallyintosavingformallybetween2019and2022

7

13

28

PROPORTIONOF

INDIVIDUALS(%)

24

80

48

RURAL

URBAN

IS-IS

IS-FSFS-FS

Source:Authors’estimatesfromESPS.

IS-ISreferstothosewhokeptsavinginformally,

IS-FSreferstothosewhotransitionedtoformalsavings,andFS-FSreferstothosewhoremainedsavingformally.

xv

ThedynamicsoffinancialinclusioninEthiopia

Accesstodigitaltechnology,financialknowledge,andothersocioeconomicanddemographicfactorsaretheprimarydriversofthemoveupfrombeingunbanked.Priortothetransition,thosewhoenteredthefinancialsystemwerebetteroffintheireducationlevel,useofmobilephones,andleveloffinancialknowledgecomparedtothosewhoremainedunbanked(FigureO.9andO.10).Accordingtoestimatesinchapterthree,theprobabilityofenteringthefinancialsystemincreasesbyalmost50%forthosewhowereunbankedandhadhigherfinancialawarenessthanforthosewithnopriorawareness.Similarly,previouslyunbankedwomenwhohaveamobilephonehavea50%higherchanceofenteringthefinancialsystem;andthisrateis40%formen.Notably,thestudyfindsthattheruralpopulationthatremainsunbankedalsohadlowlevelsoffinancialawarenessandlimitedaccesstomobilephones.

FIGUREO.9

Accountownershiptrajectoriesandindividualcharacteristics

PROPORTIONOF

INDIVIDUALS(%)

75

69

66

48

45

38

38

24

24

19

14

14

UBBB

UU

FemaleMobile

NoeducationAge[18-24]

Source:Authors’estimatesfromESPS.

UUreferstothosewhoremainedunbanked,UBreferstothosewhotransitionedtobanked,andBBreferstothosewhoremainedbanked.

FIGUREO.10

Accountownershiptrajectoriesandfinancialknowledge

2

DENSITY

1,5

1

0,5

0

00,51

FINANCIALKNOWLEDGEINDEX

UB

BB

UU

Source:Authors’estimatesfromESPS.

UUreferstothosewhoremainedunbanked,UBreferstothosewhotransitionedtobanked,andBBreferstothosewhoremainedbanked.

Thechannelsthroughwhichnewentrantsaccessthefinancialsystemareli