Financial inclusion: Sub-Saharan Africa in perspective


By Amy Underwood, Senior Behavioural Economist, Nedbank Ltd


amyIncreasingly, it is being recognised that financial inclusion represents an important means towards developmental ends. Benefits of financial inclusion can accrue to the individual by helping them to start and expand businesses, invest in education, manage risk and absorb financial shocks1. They can also accrue to a society as a whole by enabling a more inclusive growth path.

Given that sub-Saharan Africa is so in need of more inclusive growth path, enabling financial inclusion should be a concern. So, what do we know about financial inclusion in our corner of the world?

This article will draw insights from the World Bank’s Global Findex database which focuses on measuring financial inclusion globally. What is useful about this methodology is because of its global consistency, it provides for a robust basis for comparing sub-Saharan Africa to the rest of the world, particularly other developing countries.

Financial inclusion focuses primarily on the usage of accounts – both at traditional financial institutions as well as mobile money accounts – as well as trends in savings, borrowing and risk management.

Digital money

The use of mobile money accounts have become so prevalent in our corner of the world that it’s easy to assume that this forms part of a global trend. Yet mobile money accounts have played a part in the sub-Saharan African journey which is quite specific.

Globally, only 1% of adults have a mobile money account and an account with a financial institution, with a further 1% having only a mobile money account. In sub-Saharan Africa, 12% of adults have a mobile money account, with half also having an account with a financial institution. These numbers are particularly high in East Africa and Southern Africa, with Kenya leading at 58% of adults having a mobile money account.

There are only 13 countries in which more than 10% of adults have mobile money accounts and all of them are in sub-Saharan Africa. In fact, sub-Saharan Africa has 5 countries where more adults have mobile money accounts than traditional accounts with financial institutions. These are Cote d’Ivoire, Somalia, Tanzania, Uganda and Zimbabwe.

One initial promise offered by digital money was that it would have an equalising impact, helping to smooth out access to accounts for rich and poor, men and women, rural and urban. So far, the evidence is mixed. There are only 4 countries where more than 20% of the adult population has only mobile money accounts and these are Cote d’Ivoire, Kenya, Tanzania and Uganda. In Uganda and Tanzania, these accounts remain skewed towards the rich, which in turn tends to create a gender skew. In Cote d’Ivoire and Kenya, mobile money accounts have had a more equalising effects between rich and poor, men and women.

Account usage

Accounts may be opened and never used, or they may be used for a time and then fall dormant. In this case, rising numbers of accounts may speak more to efforts by financial services companies or governments, rather than growth in financial inclusion. One such example is India where the government launched a big effort to increase bank accounts in August 2014. By the end of January 2015, 125 million accounts had been opened but 72% of these were lying dormant.

In contrast, governments that have pushed bank account usage by paying social transfers into them have been much more successful. This includes the South African government as well as the Mexican, Brazilian and Mongolian governments. For as many as a quarter of those receiving transfers, the bank account opened for this purpose was their first. In addition, 61% of those receiving government transfers also use their accounts for cash management purposes. This means that they are not simply receiving the money in the account and then withdrawing all of it. Rather, they are leaving their money in the account and managing their money from there.

In general, account usage is high in sub-Saharan Africa. Along with East Asia and the Pacific, Latin America and the Caribbean, sub-Saharan Africa has high account usage amongst 65% of the adults holding accounts. This is higher than in developing countries in Europe and Central Asia, the Middle East and South Asia. Two key uses to which accounts are put in the region are formal saving and the sending of remittances.

A comparison of South Africa with the BRICS serves to deepen this contrast. While China has the highest percentage of adults with accounts, South Africa has the highest percentage of adults who are both making and receiving payments. In fact, amongst the BRICS, it has the smallest percentage of adults who have accounts but are not using them for payments.



Despite the criticism often levelled at us, sub-Saharan Africa is a region with a high level of savings (due to its high levels of borrowings, this often does not show up in studies of net savings). By region, it falls behind only the high-income OECD countries and East Asian & Pacific countries.

Globally, about half of savers use formal institutions. In developing countries, this number drops to 40%, though in sub-Saharan Africa in general and South Africa in particular, it remains at 50%. Sub-Saharan Africa has the highest level of semiformal savings – which is a term which the Findex uses to refer to those saving in an informal savings club, such as a stokvel.


Across the sub-Saharan African region, 40% of savers save semi-formally, with many saving both formally and semi-formally. This is particularly prevalent in our own country where 15% of South African savers save in both a savings club and a formal savings product. This speaks to the importance of the social aspect in this form of saving which a formal product cannot easily replicate.

What is more interesting is that since the last Findex survey in 2011, semi-formal saving in sub-Saharan Africa has risen. In line with the argument offered by anthropologist Deborah James in her book Money from Nothing, this suggests that stokvel-style saving is a growing trend rather than a remnant of the past2.

In contrast to other regions, saving for old age is not a major reason for savings in sub-Saharan Africa. Education and saving for a business are much more prevalent reasons for savings.


This ties in with the major reasons why adults in sub-Saharan Africa borrow. Another major reason for borrowing in the region is for health or medical purposes. In fact, only in South Asia is borrowing for health or medical reasons more prevalent, illuminating the paucity of options for funding health care in our region.

Concluding thoughts

Financial inclusion still has a long way to go in our region with only 34% of adults having some form of account for their money compared to a global average of 62% of adults. The use of mobile money accounts has opened up access to accounts in our region, though not always in as egalitarian a manner as we might have wanted.

Amongst those adults who do have accounts, we do see positive trends in terms of usage. It seems that most accounts that are opened are used. Also encouraging is the high proportion of adults saving and the relatively high proportion of adults saving formally. Savings clubs which leverage off the social capital of our society remain a significant part of how we save in this region.

As the World Bank encourages, it remains incumbent upon financial services companies to find ways to help people to fulfil their financial needs in more protected ways and which remain consistent with how individuals currently use their money. This requires engaging with the particularities of our region rather than simply ascribing the characteristics of other global societies.

Primary source

Demirguc-Kant, A., Klapper, L., Singer, D. & van Oudheusden, P. 2015. “The Global Findex Database 2014: Measuring Financial Inclusion around the World”. Policy Research Working Paper 7255. World Bank, Washington D.C.

Other Sources

1 World Bank. 2014. Global Financial Development Report 2014: Financial Inclusion.

2 James, D. 2014. Money from nothing: indebtedness and aspiration in South Africa. Stanford University Press.