Fitting Financial Inclusion into "Le Bénin révélé"
In December 2016, President Patrice Talon announced "Le Bénin révélé", a five-year plan to boost the economy through $15 billion of targeted spending on agriculture, tourism and infrastructure. Following that announcement, the IMF committed to fund a three-year program aimed at advancing economic development by "improving revenue administration, strengthen public financial management and debt management, and support[ing] private sector development". Additionally, the World Bank plans to provide the West African nation with a $50 million facility to support growth in the tourism sector. All of these bold actions and investments highlight the impressive strides the government of Benin is taking to grow the economy and improve stability. However, another import aspect for the country to address is financial inclusion.
According to Global Findex, less than 20 percent of adults have access to a formal account, compared to 34 percent in Sub-Saharan Africa. One of the primary challenges to increasing access to financial services is locating the 80 percent of adults without access and understanding the barriers they face. Thanks to generous support from UNCDF and The MasterCard Foundation, our Interactive Dashboard for Benin makes it possible to identify regions in the country that are currently underserved by financial service providers (FSPs). For example, though the geospatial data shows that each commune has at least one financial access point, rural areas are experiencing higher population growth while being underserved compared to urban and coastal areas. Additionally, as is highlighted in our Market Insights section, 28 percent of financial access points are located in Littoral.
While mapping the supply and demand of financial services can identify undeserved areas, expanding service coverage requires significant planning and investment, which is not always feasible in the short-term. With this in mind, we decided to look for opportunities for FSPs and mobile network operators (MNOs) that could be activated more easily but still increase financial inclusion in Benin. With the support of UNCDF-MM4P, we were able to combine our district-level geospatial data with the findings from the DFS Consumer Readiness Survey, conducted by InterMedia. By overlaying the survey responses with geospatial data, we identified geographic patterns and trends of consumer perceptions that varied across the country, especially as they pertained to mobile money.
For example, with few exceptions, awareness of mobile money is higher in the southern, coastal regions. However, interest in mobile money followed no obvious geographic pattern, indicating potential obstacles to adoption in certain regions that may need to be addressed differently in each department. In Atlantique and Littoral, many respondents did not see a need for mobile money. However, this could be a matter of limited awareness; not of mobile money in general but of the specific features and capabilities. In Collines, Mono and Ouémé, more than 20 percent of respondents were unsure how to open a mobile money account, an obstacle that could be removed through an educational marketing campaign. Similarly, residents of Atakoro and Kouffo had anxieties about using mobile money, citing fears that transactions would 'go wrong'. FSPs and MNOs could combat these concerns through guarantees and assurances, or through credibility marketing and connecting potential users with current users.
In terms of the number of financial service access points, Benin must make improvements in the coming years especially as it considers infrastructure investments. However, in the short-term, FSPs can gain a better understanding of their customers and potential customers. Through awareness campaigns and informative marketing, FSPs can encourage greater uptake of the financial products and services that are already available. It is an important, and achievable, step toward a more inclusive financial system.