Depth sounding: Shifting measurement away from a one-dimensional view of financial inclusion

Depth sounding – shifting measurement away from a one-dimensional view of financial inclusion is the second note to be published from the MAP Global Insights series. It introduces a new approach to measuring financial inclusion. To the traditional emphasis on measuring ‘breadth’ – that is, the number of people using any type of formal financial service – the measurement framework adds a new indicator, ‘depth’: the number of different financial product classes used per person that reports accessing formal financial services. It expands on why such an approach is necessary in financial inclusion and applies it to the first six MAP pilot countries, highlighting the new insights it provides into the state of financial inclusion in a given market.

Cenfri's Hennie Bester expands on this new approach:

 

The traditional focus in the measurement of financial inclusion is on access to a single financial service from a formal financial institution. However, the evidence from the first six MAP pilot countries is highlighting that this approach to measurement does not accurately reflect how adults, including the poor, live their financial lives. For instance, MAP Malawi (Thom et al. 2015) revealed that a typical household receives remittances physically delivered by family members or friends to pay for school fees, saves ‘under the mattress’ to meet monthly living expenses, and is a member of a village savings and loan association (VSLA) to access credit in the event of an emergency.While the evidence in financial inclusion research is highlighting that people use a portfolio of financial services, however, measurement has not caught up.

The MAP Global Insights series attempt to consolidate and synthesise the learnings from the first six MAP pilot countries which have been conducted in Thailand, Myanmar, Swaziland, Mozambique, Lesotho and Malawi.

Additional Info

  • Country: Mozambique, Swaziland, Malawi, Lesotho, Global, France
  • Institution: Cenfri, FinMark Trust, UNCDF
  • Date Published: 2016
  • Document Type: Synthesis Documents
  • Author/s: Christine Hougaard, Hennie Bester, Jeremy Gray, David Saunders
 

Depth sounding: Shifting measurement away from a one-dimensional view of financial inclusion

Depth sounding – shifting measurement away from a one-dimensional view of financial inclusion is the second note to be published from the MAP Global Insights series. It introduces a new approach to measuring financial inclusion. To the traditional emphasis on measuring ‘breadth’ – that is, the number of people using any type of formal financial service – the measurement framework adds a new indicator, ‘depth’: the number of different financial product classes used per person that reports accessing formal financial services. It expands on why such an approach is necessary in financial inclusion and applies it to the first six MAP pilot countries, highlighting the new insights it provides into the state of financial inclusion in a given market.

Cenfri's Hennie Bester expands on this new approach:

 

The traditional focus in the measurement of financial inclusion is on access to a single financial service from a formal financial institution. However, the evidence from the first six MAP pilot countries is highlighting that this approach to measurement does not accurately reflect how adults, including the poor, live their financial lives. For instance, MAP Malawi (Thom et al. 2015) revealed that a typical household receives remittances physically delivered by family members or friends to pay for school fees, saves ‘under the mattress’ to meet monthly living expenses, and is a member of a village savings and loan association (VSLA) to access credit in the event of an emergency.While the evidence in financial inclusion research is highlighting that people use a portfolio of financial services, however, measurement has not caught up.

The MAP Global Insights series attempt to consolidate and synthesise the learnings from the first six MAP pilot countries which have been conducted in Thailand, Myanmar, Swaziland, Mozambique, Lesotho and Malawi.

Additional Info

  • Country: Mozambique, Swaziland, Malawi, Lesotho, Global, France
  • Institution: Cenfri, FinMark Trust, UNCDF
  • Date Published: 2016
  • Document Type: Synthesis Documents
  • Author/s: Christine Hougaard, Hennie Bester, Jeremy Gray, David Saunders
 

 

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