Financial Capability and Inclusion in Haiti Result of a Demand-side Survey © 2019 The World Bank Group 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpreta- tions, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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Photo Credits: World Bank photo library and Shutterstock.com Table of Contents Acknowledgements................................................................................................................................................ v Acronyms and Abbreviations............................................................................................................................. vii Preface.................................................................................................................................................................... ix Key Findings............................................................................................................................................................ x Executive Summary.............................................................................................................................................. xi 1. Survey Background and Methodology............................................................................................................. 1 2. Financial Inclusion in Haiti................................................................................................................................5 2.1 Concepts to Measure Financial Inclusion........................................................................................................... 5 2.2 Headline Measure for Financial Inclusion........................................................................................................... 6 2.3 Usage of Individual Financial Products................................................................................................................7 2.3.1 Usage of Accounts...........................................................................................................................................7 2.3.2 Remittances and Other Financial Transfers.......................................................................................... 9 2.3.3 Usage of Loan Products..............................................................................................................................12 2.3.4 Other Financial Products............................................................................................................................14 3. Financial Capability......................................................................................................................................... 15 3.1 Knowledge of and Experience with Financial Service Providers................................................................15 3.1.1 Commercial Banks......................................................................................................................................... 17 3.1.2 Financial Cooperatives.................................................................................................................................18 3.1.3 Microfinance Institutions.............................................................................................................................18 3.1.4 Mobile Payment Providers..........................................................................................................................20 3.1.5 Money Transfer Operators..........................................................................................................................21 3.1.6 Insurance Companies and Brokerage Houses....................................................................................... 23 3.2 Knowledge of Financial Concepts...................................................................................................................... 23 3.3 Financial Behavior and Attitudes.......................................................................................................................29 Table of Contents | I 3.3.1 Attitudes and Behaviors based on Principle Component Analysis.................................................30 3.3.2 An Assessment of Individual Dimensions of Behaviors and Attitudes.........................................30 3.3.3 Cross-Country Comparison of Financial Capability Scores............................................................ 34 3.4 Revealed Attitudes regarding Information Seeking and Dispute Handling........................................... 34 3.4.1 Dispute Handling.......................................................................................................................................... 34 3.4.2 Information Seeking and Media Usage.................................................................................................. 37 4. Summary Assessment and Recommendations.......................................................................................... 39 References.............................................................................................................................................................43 Appendices............................................................................................................................................................47 A. Cross-tabulation of Financial Inclusion............................................................................................................... 47 B. Knowledge, Experience and Level of Satisfaction with Different Financial Service Providers............49 C. Background Data on Haitian Financial Survey.................................................................................................... 5 Box Box 1. Financial Literacy Quiz............................................................................................................................................ 24 List of Figures Figure 1: Financial Inclusion in Haiti.................................................................................................................................. 6 Figure 2: Formal and Informal Savings (by gender, urban/rural, and income)...................................................... 8 Figure 3: Aggregated Financial Account Ownership (by gender, urban/rural, and income level).................... 9 Figure 4: Remittance Trends (by gender, urban/rural, income, zone and strata).............................................. 10 Figure 5: Remittance Channels (by gender and urban/rural)................................................................................... 11 Figure 6: Client Satisfaction with Remittance Services............................................................................................ 11 Figure 7: Level of Debt among Haitian Adults...............................................................................................................12 Figure 8: Level of Confidence in Repaying Debts (% of respondents with debt)..................................................13 Figure 9: Debt Forms and Levels among Haitian Adults............................................................................................13 Figure 10: Self-reported Knowledge of Financial Institutions and Products........................................................16 Figure 11: Awareness of and Experience with Financial Services Offered by Commercial Banks.................. 17 Figure 12: Client Reasons for Dissatisfaction with Bank Remittance Services..................................................18 Figure 13: Awareness and Experience with Financial Services Offered by Financial Cooperatives...............19 Figure 14: Awareness of and Experience with Financial Services Offered by MFIs.............................................19 Figure 15: Awareness of and Experience with Financial Services Offered by Mobile Money Providers.......20 Figure 16: Client-reported Difficulties with Mobile Money Remittances Services..............................................21 Figure 17: Awareness of and Experience with Financial Services Offered by Money Transfer Operators............................................................................................................................................. 22 Figure 18: Client-reported Difficulties with Money Transfer Operators................................................................ 22 Figure 19: Perceived Knowledge of Financial Concepts and Products.................................................................. 25 Figure 20: Financial Literacy Distribution (by number of correct answers and by financial concept)........ 25 II | Financial Capability and Inclusion in Haiti Figure 21: Reported versus Actual Financial Literacy................................................................................................26 Figure 22: Financial Literacy Scores (by income, urban/rural, zone and strata)...............................................28 Figure 23: Average Financial Capability Scores...........................................................................................................30 Figure 24: Financial Capability Scores............................................................................................................................31 Figure 25: Remittance Usage (% of Haitian adults who receive remittances).................................................... 32 Figure 26: Approaches to Dealing with Financial Service Provider Conflicts......................................................36 Figure 27: Action Taken to Redress Conflicts with Financial Service Providers.................................................36 Figure 28: Reasons for Not Solving Conflicts with Financial Service Providers................................................. 37 Figure 29: Media Consumption by Social and Demographic Groups.....................................................................38 Figure 30: Estimated Population by Urban/Rural........................................................................................................51 Figure 31: Estimated Population by Province................................................................................................................51 Figure 32: Estimated Population by Gender..................................................................................................................51 Figure 33: Estimated Population by Age Group............................................................................................................51 Figure 34: Estimated Population by Household Size...................................................................................................51 Figure 35: Estimated Population by Education Group................................................................................................51 Figure 36: Estimated Population by Stable/Unstable Income Groups.................................................................. 52 Figure 37: Estimated Population by Income Group..................................................................................................... 52 Figure 38: Estimated Population by Zone..................................................................................................................... 52 Figure 39: Estimated Population by Strata.................................................................................................................. 52 List of Tables Table 1: Comparison between Key Census Characteristics and the Financial Capability Survey Profile.... 3 Table 2: Financial Account Ownership in Selected Countries and Regions (2014, 2017)....................................7 Table 3: Cross-country Comparison of Financial Literacy Scores.......................................................................... 27 Table 4: Main Identified Financial Components from PCA Analysis.......................................................................29 Table 5: Cross-country Comparison of Financial Capability Scores......................................................................35 Table 6: Financial Inclusion Summary by Social and Demographic Factors....................................................... 47 Table 7: Awareness and Experience with Financial Services Offered by Financial Institutions.....................49 Table of Contents | III Acknowledgements T his Financial Capability and Inclusion Survey Report builds on the results of a survey that was carried out with the support of the World Bank’s The team would like to express its deep appreciation to the Haitian authorities, in particular the Central Bank of Haiti (Banque Centrale de la République d’Haïti) (BRH) Strategic Research Program on Finance for Poverty and the Haitian Institute of Statistics and Informatics Reduction and Shared Prosperity. The report was (l’Institut Haïtien de Statistique et d’Informatique) prepared in the context of the program for “Increasing (IHSI), for their cooperation and collaboration during Access to Financial Services in Haiti”, supported by the the preparation and implementation of the survey, Financial Sector Reform and Strengthening (FIRST) as well as for the feedback they provided regarding Initiative. the results. The survey was prepared by a team led by Juan The team is also grateful for the valuable support Buchenau (Senior Financial Sector Specialist) and provided by Minah Je and Justin Archer (Consultants, Luis Trevino (Financial Sector Specialist) from the World Bank, GFMDR) and Lina Wedefort (Economist, World Bank Group’s (WBG) Finance and Markets EEC Canada), as well as to EEC Canada’s core and Global Practice. The survey was adapted to the Haitian field team, led by Isabelle Leyder (Deputy Project context by Luis Trevino and Fares Khoury (Economist Director of the survey). Furthermore, the team would and President of the Economic Study Council [Étude like to thank Emilie Bernadette Perge, Siegfried Zottel Économique Conseil], EEC Canada) and tested in the and Bilal Husnain Zia (all of the World Bank) for their field by the Canadian survey firm EEC Canada. EEC valuable peer review comments on the report. Finally, also launched the final survey between September 2016 a special thanks goes to Nicolas Megelas, (Country and March 2017 in Haiti. The analysis of the results Manager at EEC Canada), as well as all supervisors and and preparation of the report was done by Ilka Funke enumerators whose efforts and commitments made this (Financial Inclusion Specialist, Consultant, GFMDR) project possible. and Fares Khoury. The graphic design of this document was performed by Aichin Jones and Amy Quach. Finally, the team wishes to express its sincere appreciation to all the Haitian women and men who patiently responded to the survey. Acknowledgements | V Acronyms and Abbreviations AML/ CFT Anti-Money Laundering/Combating the Financing of Terrorism ATM Automated Teller Machine BRH Central Bank of Haiti (Banque Centrale de la République d’Haïti) CAPI Computer-assisted Personal Interview EA Enumeration Area FC Financial Cooperative FIRST Financial Sector Reform and Strengthening Initiative FIU Financial Inclusion Unit (within the Central Bank of Haiti) FSP Financial Service Provider GSMA Global System for Mobile Communications HTG Haitian Gourdes IFAS Inclusive Finance Advocacy Staff IHSI Haitian Institute of Statistics and Informatics (L’Institut Haïtien de Statistique et d’Informatique) KYC Know Your Customer LAC Latin America and the Caribbean MFI Microfinance Institution MFS Mobile Financial Services MTO Money Transfer Operator NFIS National Financial Inclusion Strategy NGO Non-governmental Organization NSCI National Saving and Credit Institution PAP Port-au-Prince PCA Principal Component Analysis PPS Probability Proportional to Size PSU Probability Sampling Unit RN National Road Network (Route Nationale) WBG World Bank Group Acronyms and Abbreviations | VII Preface F inancial capability, as defined by the World Bank Group (WBG) in this report, is the capacity to act in one’s best financial interest, given In response to a request from the Central Bank of Haiti (Banque Centrale de la République d’Haïti) (BRH), the World Bank has conducted a Financial Capability socioeconomic and environmental conditions. It and Inclusion Survey. The BRH has identified the low encompasses knowledge (literacy), attitudes, skills and levels of financial capabilities and financial inclusion behavior of consumers with respect to understanding, as priority areas for reform. This survey constitutes a selecting, and using financial services that fit their needs key diagnostic tool that aims to guide the authorities (World Bank 2013a). in developing a detailed implementation action plan for improving financial capability and inclusion levels. Improving financial capabilities has become a Moreover, it will help the authorities set quantifiable priority for policy makers seeking to promote and concrete targets to update the National Financial financial inclusion, financial stability and the smooth Inclusion Strategy, evaluate supply side reforms, and functioning of financial markets. Today people are assess the effectiveness of future financial capability required to take increasing responsibility for managing enhancing programs. a variety of risks over their life cycle. Those who make sound financial decisions and who effectively interact The report covers three main areas: Chapter 1 with financial service providers are more likely to provides a brief overview of the methodology used and achieve their financial goals, hedge against financial the composition of the sample. Chapter 2 then assesses and economic risks, and improve their household’s the level of financial inclusion in Haiti, including a more welfare. All of this supports economic growth. Boosting detailed look at the uptake of individual products, and financial capability has therefore emerged as a policy Chapter 3 assesses varies aspects of financial capability objective that complements governments’ financial in Haiti. This includes the population’s knowledge inclusion and consumer protection agendas. To this of financial service providers, their level of financial end, policy makers are increasingly using surveys as literacy (that is, their understanding of financial diagnostic tools to identify financial capability areas concepts such as inflation, interest rates and risk that need improvement, as well as vulnerable segments diversification), as well as underlying skills and attitudes of the population that could be targeted with specific that influence the financial behavior of the population. interventions. Finally, Chapter 4 summarizes the findings and makes recommendations for the development of an action plan for financial education. This plan would be developed and implemented as part of the National Strategy for Financial Inclusion, and will take ongoing financial education measures into account. Preface | IX Key Findings Source: World Bank Financial Capability and Inclusion Survey, Haiti (2017) Note: MFI = microfinance institution; PAP = Port-au-Prince.   X | Financial Capability and Inclusion in Haiti Executive Summary T he government of Haiti has a strong focus on expanding the breadth and depth of financial inclusion. In 2013, it launched a National 14.3 percent have a mobile account through which they can conduct financial services from their cell phones. Those who are not financially included say that the Financial Inclusion Strategy with the objective of main reason is that they are not able to afford a financial increasing access to responsible financial services. account, with 34 percent of Haitian adults indicating The strategy is currently under implementation. not having enough money for an account, and another 15 percent indicating that an account is “too expensive”. This Financial Capability and Inclusion Survey aims to inform the implementation of the National Financial account ownership is generally correlated Financial Inclusion Strategy and to support the with people’s income level, type of employment and development of targeted financial education location. Adults with a savings or checking account live measures. The survey was launched between September mostly in urban areas (36.8 percent for Port-au-Prince 2016 and March 2017. The sample of 3,000 Haitian adults compared to 12.1 percent for rural, non-connected areas) is nationally representative with regard to gender, urban and belong to the highest income bracket (30.3 percent / rural, and level of connectivity to national roads. The compared to between 12.9 to 21.8 percent for the other survey include]]s questions to measure the actual level income brackets). Women are less likely to have an of financial inclusion of the population, and to assess account (with 18.5 percent compared to 24.3 percent for their financial capabilities with regards to knowledge, men). Similar results were obtained for mobile accounts. skills, attitudes and behaviors. Through this, it aims Few people confirm being able to save, with only to (i) provide baseline data for the implementation of 15 percent of Haitian adults reporting the ability to do the Financial Inclusion Strategy, (ii) identify gaps in so. The savings of urban residents are usually held in financial capabilities that need to be addressed through formal accounts. By contrast, informal methods still financial education measures, and (iii) verify supply side play an important role in rural areas. gaps that need to be tackled. Around 35 percent of the adult population confirm sending or receiving remittances, with remittances Level of financial inclusion in Haiti being channeled mostly through money transfer Account ownership has increased in the last few operators (MTOs). Overall, 17 and 22 percent of years, with 27.5 percent of Haitian adults having Haitians report periodically sending and receiving a financial account in 2017. Based on the survey remittances, respectively. Remittance senders are usually results, 21.5 percent of Haitian adults have a savings or located in Port-au-Prince and locations connected to checking account at a bank or financial cooperative, and the national road system, whereas remittance receivers 1 The Global Findex Database for 2014 indicates that 18.9 percent of the population has a financial account, of which 17.5 percent are with a bank or financial cooperative. However, the data is not fully comparable, as the Global Findex Dataset uses as a base adults aged 15 and older, whereas the Financial Capability Survey is based on a sample of adults aged 18 years and older. Executive Summary | XI mostly live in rural and unconnected areas of Haiti. institutions (MFIs), insurance companies and brokerage Whether financially included or not, most people still houses (at 40, 13, 20 and 10 percent, respectively). send or receive remittances via money transfer operators People who have a higher awareness are predominantly (with 62 percent for senders, and 53 percent for receivers). adults with a higher income, residing in Port-au-Prince. In rural areas, informal methods for receiving the funds also play a large role (for 40 percent of receivers). Although two-thirds of users report being satisfied with the received financial services, the survey Although almost half of the Haitian population reveals important shortcomings in terms of quality currently has some form of loan, only 10 percent of of service, liquidity management and availability of adults have a loan from a formal financial service information from service providers. Satisfaction with provider. Borrowing money is particularly prevalent in the received service is the lowest for MFIs and MTOs rural and unconnected areas, where over 60 percent of (at 51 and 59 percent, respectively), whereas financial adults report having a loan. Debt levels appear elevated. cooperatives and insurance companies both reach client For example, 37 percent of people in the lowest income satisfaction levels of over 90 percent. quartile report debt equivalent to 2-12 months of income, and another 23 percent report debt equivalent to over The level of financial literacy among Haitian adults 12 months of income. The borrowing needs are mostly also shows substantial gaps. Haitian adults generally met through informal sources. Regarding formal loans, know about interest and exchange rates (96 and 84 banks mostly cater to people in urban areas and with percent, respectively). However, people in rural areas higher income levels, whereas financial cooperatives with lower income levels admit to not being familiar and microfinance institutions tend to reach people with with concepts such as insurance, inflation and stock lower income levels in peri-urban and rural areas. shares (35, 26, and 26 percent, respectively). However, the perceived knowledge and de facto understanding Uptake of insurance and investment products is of concepts vary markedly. When given a standard low. It is largely limited to people with a higher income financial literacy test, people were only able to correctly and those living in urban areas, particularly in Port-au- answer 3.6 of the 7 questions, with vast gaps noted in the Prince. ability to calculate simple interest or compare bargains. Low levels of financial literacy are prevalent in rural and unconnected areas of the country and among people Financial capabilities with lower incomes. Yet, many people did understand Ascertaining adequate financial capabilities among the impact of inflation. It should also be noted that even the Haitian population is important for increasing those financially included adults still lack basic skills, access to financial services in a responsible way. with over one-third showing vast gaps in knowledge, New and existing clients need to have knowledge about as well as differences in their perceived and de facto service providers and their products. They also need to knowledge. have an understanding of basic financial concepts, as well as appropriate attitudes and financial behavior to There are also substantial deficiencies regarding select and use financial services in a responsible manner. attitudes and behaviors toward financial management In this context, the survey identifies substantial gaps in and services. Although many people monitor their all dimensions of financial capabilities in Haiti. expenses and plan how to spend their available funds, the level of detail about the planning and the adherence The Haitian population’s awareness and experience to the plan is uneven. Gaps in planning and adherence with financial service providers varies greatly. are more visible in urban and connected areas and People are mostly aware of commercial banks, MTOs among people with a higher income level, where people and mobile payment service providers (at 94, 87 and have more spending choices and options to generate 73 percent, respectively). However, there is a lack additional income. Overall, though, people do not feel knowledge about financial cooperatives, microfinance that they can put money aside for future expenditures 2 These are service providers who offer mobile accounts. XII | Financial Capability and Inclusion in Haiti because they struggle to cover the basic needs. This is a tendency to plan expenditures, people have a strong particularly the case in rural areas, where people lack inclination to live for today and not plan for the future. additional income-generating sources and are subject to volatile incomes. At the same time, people admit to a Finally, the survey also reveals a passive attitude lack of discipline when it comes to managing money and toward dispute handling and information seeking. controlling expenditures. Sixty-two percent of adults Only 25 percent of users of financial services who had a report occasionally buying unnecessary items before problem with the service actually tried to resolve it. The having covered their essential expenses. As a result, remainder did not trust the available dispute resolution less than one-third of adults who had an upcoming large mechanisms, or they lacked information about where to expenditure were prepared to cover it, and few have put go. A similar passive attitude was noted among those any funds aside to support themselves in old age. Thus, who did not yet experience a problem. despite a general, positive attitude toward savings and Core recommendations that emerge from the survey results: Recommendations Responsible* Time Frame** Supply-side reforms Conduct supply-side mapping. BRH (FIU) ST Build the capacity of non-bank agents and employees of financial Financial Service On an ongoing institutions to enhance service quality. Providers basis Enhance transparency of information at financial service points. Financial Service On an ongoing Providers basis Strengthen the availability of information about dispute resolution Financial Service Provider, MT mechanisms. BRH Demand-side reforms Conduct focus groups to complement quantitative research with BRH, donors ST qualitative information. Develop core messages for financial education that can be used BRH (FIU), donors ST across programs. Develop a Financial Education Strategy. BRH (FIU), stakeholders ST / MT Regulatory reforms Mandate regular reporting to the BRH by service points and publish BRH (FIU) MT information. Issue consumer protection regulations to foster disclosure and BRH MT transparency of information about financial services, as well as responsible market conduct. Donors and NGOs Support the development of a Financial Education Strategy. Donors, NGOs ST / MT Integrate financial education measures into ongoing work programs. Donors, NGOs MT Where possible, channel financial support through the financial system. Donors, NGOs MT Note: * FIU = Financial Inclusion Unit (within the BRH); FSP = Financial Service Provider; NGO = non-governmental organization; ** LT = long term (over 2 years); MT = medium term (6 months to 2 years); ST = short term (within 6 months). Executive Summary | XIII 1. Survey Background and Methodology E xpanding the breadth and depth of financial inclusion is a priority in Haiti. In recent years, Haitian authorities have made considerable efforts to service providers. Regarding demand-side reforms, the financial capability-related questions also help to further the understanding of: (i) the population’s knowledge develop and implement measures to increase access to of financial concepts and products; (ii) attitudes, skills financial services among the Haitian population. The and behaviors related to financial services and their efforts are carried out as part of the National Financial providers; and (iii) the day-to-day management of Inclusion Strategy (NFIS), which the Haitian government resources, planning for the future, and staying informed. formulated in 2013 with World Bank support. The As for supply-side reforms, the survey provides valuable NFIS focuses on five main pillars: (i) the availability insights into the usage, value and limitations of existing of responsible financial services to facilitate inclusion financial services from a customer’s perspective. It also and poverty reduction; (ii) access to credit to foster reveals general perceptions about financial institutions economic growth; (iii) improved geographic access to and products in a given country. Taken together, the financial services; (iv) enhanced financial education findings from financial capabilities and inclusion and consumer protection; and (v) strengthened financial surveys help to: (i) identify population segments that are infrastructure and institutions. In particular, the NFIS currently not adequately financially included; (ii) design targets vulnerable groups such as smallholder farmers, reforms and projects to address the gaps from both the women, migrant workers, and Haitians living in remote supply and demand sides; and (iii) set national financial areas.3 The National Financial Inclusion Strategy is inclusion targets using the survey results as a baseline. currently being updated. The questionnaire used for this survey has been tested The Haitian Financial Capability and Inclusion in the context of middle- and low-income countries, Survey aims to shed light on the level of financial and customized to fit the specific context of Haiti. The inclusion in Haiti, as well as constraints to financial survey is based on a questionnaire originally developed capabilities that hinder the uptake of financial for low- and middle-income countries with support from services from the demand side. National Financial the Russia Financial Literacy and Education Trust Fund.4 Inclusion Surveys allow for the analysis of the level of Where necessary, the list of financial products or service financial inclusion in a population; how the uptake of providers was adapted to the local context of Haiti. financial products varies across population segments; Furthermore, personal and household income ranges and the degree to which saving, borrowing, and making were adapted to Haitian levels, and the main status payments is being channeled through formal financial of household members considers three new options 3 Central Bank of Haiti, National Strategy of Financial Inclusion (Banque de la République d’Haïti, “Stratégie Nationale D’inclusion Financière”), 2013. 4 Extensive qualitative research techniques were used to develop this general survey instrument, including about 70 focus groups and more than 200 cognitive interviews in eight countries. These research techniques were used to identify the concepts that are relevant in middle- and low- income settings, and to test and adapt the questions to ensure that they are well understood and meaningful across income and education levels. The instrument has been or will be used in 14 countries in Arica, East Asia, Latin America, Africa, the Middle East and the Pacific. 1. Survey Background and Methodology | 1 to differentiate farm employees or self-employees each selected PSU, a listing of households was taken, from those whose main activities are not related to the from which 15 households were randomly drawn and agricultural sector. Since remittances play a considerable targeted for surveying at the second stage. This choice role in Haiti, the Haitian questionnaire also includes four of having 15 randomly drawn respondents instead of new segments to record remittance trends (including 20 per Enumeration Area (EA) reduced the possible the frequency of sending and receiving remittances, clustering effect even further. Finally, within each purposes, channels and levels of satisfaction with these selected household, eligible adults either responsible for channels). personal or household finances were randomly drawn by means of the Kish grid. Individual weights were then The survey is representative of the active population, calculated and used in the ensuing analysis to adjust for and was applied to 3,000 adults between September varying probabilities of selection (design weights). 2016 and March 2017.5 Probability-sampling techniques were used to select the 3,000 surveyed The respondents of the survey have the following adults, using data from the Haitian Institute of Statistics key demographic characteristics (see also Annex and Informatics (IHSI).6 The population was divided C): 40 percent of the surveyed adults live in urban into 6 strata. Communal sections were identified as rural areas, with the remaining 60 percent living in rural or urban according to the IHSI and then characterized settings. Slightly less than half of the respondents are by their degree of connectedness to the national road female (48 percent). All individuals were also ranked network (RN) in Haiti (Connected (RN) and Not- by their reported household income and divided into connected). Port-au-Prince remained in a category of its four groups: 25 percent of the population fall within the own and formed a separate stratum. The survey itself lowest income segment (up to 10,000 Haitian Gourdes was implemented through computer-assisted personal [HTG] per month); 25 percent in the second-lowest interview methods (CAPI). To ensure high data quality quartile (between 10,001 HTG and 19,200 HTG); and avoid common errors associated with paper-and- 25 percent in the second highest (between 19,201 pencil surveys, an electronic version of the questionnaire HTG and 35,700 HTG); and 25 percent in the highest (including internal consistency tests) was programmed, income quartile (more than 35,700 HTG). Forty-seven and the survey was administered using power personal percent of the surveyed adults are younger than 35 computers (PCs). The non-response rate was low at years of age, 37 percent are between 35 and 55 years around 5.1 percent of the total sampled households due of age, and 16 percent are older than 55 years of age. In to extensive efforts and strategies used.7 terms of educational attainment, less than 1 percent of the respondents have some or have completed tertiary The individual respondents within households were education (including other higher education); about selected through a three-stage cluster sampling. The 23 percent have some or have completed secondary communal sections were randomly selected as primary schooling; 53 percent have some or have completed sampling units (PSUs) with probability proportional primary or informal education; and around 24 percent to size (PPS, that is, the number of households) at of the surveyed adults have no schooling at all. The the first stage. They consisted of a selection of 200 average number of adults per household is two, whereas primary sampling units to reach the sample target. In the average sized household is comprised of four people. 5 This includes the population aged 18 and older. 6 The sampling frame for the Financial Capability and Inclusion Survey in Haiti was extracted from the report entitled “Total Population, Population 18 Years and Older, Households and Estimated Densities in 2015” published by the Haitian Institute of Statistics and Informatics. (note de bas de page: la formation des agents de recensement, par exemple, sur le refus de stratégies de reconversion, la communication avec les répondants pour les informer de l’enquête à venir mais également pour expliquer les objectifs de l’enquête, allant jusqu’à 5 tentatives de prise de contact à différents moments pendant la période de l’enquête, etc.) (“Population Totale, Population de 18 ans et plus, Ménages et Densités Estimés en 2015” published by the “Institut Haïtien de la Statistique et d’Informatique. (IHSI).” This report used results from the 9th Haitian Census of Population and Housing as well as short- (2014), medium- (2000 to 2015) and long-term (1950 to 2050) population projections from IHSI and the Economic Commission for Latin America and the Caribbean. This information was used to estimate total population (by gender), the adult population, density and the number of households by communal section. A presentation on the survey methodology can be found in Appendix E. This includes the training of enumerators on refusal conversion strategies, communication with respondents to inform them of the coming survey, as well 7 as explaining the survey’s objectives. Up to 5 contact attempts were made at different moments during the survey period. 2 | Financial Capability and Inclusion in Haiti As shown in Annex C, 39 percent of the respondents live The survey results of the Financial Capability and in households with one to three members; 43 percent of Inclusion Survey were extrapolated to match the households are comprised of four to six members; and key characteristics of Haiti’s population. As Table 1 18 percent live in households with 7 or more members. presents, there are minor differences between Haiti’s About 33 percent of respondents live in the metropolitan population distribution and the extrapolated population zone of Port-au-Prince; 34 percent live in zones with from the survey (all household members are considered). access to national roads; and the remaining 33 percent The analysis uses the term “respondents” whenever the live in non-connected zones. survey results were not extrapolated. Table 1: Comparison between Key Census Characteristics and the Financial Capability Survey Profile Country Demographic IHSI Financial Capability Survey Gender distribution Male 49.6% 49.3% Female 50.4% 50.7% Area distribution Urban 51.9% 51.4% Rural 48.1% 48.6% Households per Stratum Rural - Port-au-Prince (PAP) 0.9% 0.9% Urban - Port-au-Prince (PAP) 24.2% 24.3% Rural - Connected (RN) 17.6% 17.7% Urban - Connected (RN) 16.5% 15.9% Rural - Non-connected 29.9% 30.0% Urban - Non-connected 11.0% 11.2% Sources: Republic of Haiti, Ministry of Economy and Finance, Haitian Institute of Statistics and Informatics, Total population 18 years and over, households and densities estimated in 2015 (“République d’Haïti, Ministère de l’Économie et de Finances, Institut Haïtien de la Statistique et d’Informatique, Population totale de 18 ans et plus, ménages et densités estimés en 2015”), and WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: The variables used to generate the indicators included in the Tables and Figures of this report are extracted from the survey questionnaire presented in Appendix F. They are listed by Table and Figure in Appendix G. 1. Survey Background and Methodology | 3 2. Financial Inclusion in Haiti 2.1 Concepts to Measure Financial • As a broad financial inclusion indicator, the share of the population with a formal account or a loan from a Inclusion formal financial service provider is used. In addition to the narrow indicator, this also includes those people who have a credit card or a loan/mortgage from a Financial Inclusion, as defined by the World formal financial institution such as licensed banks, Development Report 2014 (World Bank 2013a), financial cooperatives, microfinance institutions, and relates to the share of individuals and firms that other formal lenders. use financial services. As Financial Capability and Inclusion Surveys focus only on individuals, The measurable level of financial inclusion is not the report uses as its definition for financial identical to the share of the population that could inclusion “the share of individuals that use access financial services. As highlighted in the Global financial services”. Financial Development Report (2014), people can have access to affordable financial services, but decide not to use them for cultural or religious reasons, or because they do not see a need for them. The share To assess the level of financial inclusion, the World of the population that voluntarily excludes itself from Bank Group generally uses two concepts: using financial services is difficult to measure, but financial capability assessments can shed some light on • As a narrow financial inclusion indicator, the share underlying misperceptions about financial products and of the population with a formal financial account is cultural issues. On the other hand, there are those that used. This includes checking and/or savings accounts are restricted in their access to financial services because at commercial banks and financial cooperatives, as (i) they do not have a financial services provider in reach well as mobile accounts.8 Through these accounts, (lack of geographical access); (ii) they cannot afford people can carry out transfer and bill payments, the available products (lack of affordability); and/or receive payments, as well as store/save funds for (iii) they cannot bring the necessary documentation or future expenses or emergencies. This indicator is used fulfill other requirements (lack of eligibility). Where as a core indicator in the Global Findex Survey of the possible, the discussion about the uptake of financial World Bank, and allows for the comparison of account services will try to shed light on voluntary exclusion and ownership across countries worldwide. de facto gaps in financial access. 8 In the Haitian context, “mobile accounts” refers to mobile wallets, such as “Mon Cash” of Digicel / Sogebank, and “Lajan Cash” launched by the National Bank of Credit (Banque Nationale de Credit), as well as other existing mobile accounts that are being used to pay bills or make financial transactions via cell phones. 2. Financial Inclusion in Haiti | 5 2.2 Headline Measure for Financial inclusion indicator, as all respondents with a lending Inclusion product also have a savings, checking or mobile account. Figure 1B shows that 10 percent of Haitian Based on the survey results, 27.5 percent of the adults indicate having a loan, mortgage or credit card population currently has a financial account.9 In from a financial institution. As a loan in Haiti usually terms of type of account, 21.5 percent of Haitian adults requires cash collateral, all borrowers are required reveal having a savings or checking account at a bank to have a formal financial account in which the cash or a financial cooperative. Figure 1A shows that a small collateral is stored. The uptake of individual products fraction of these account holders also has a debit card will be assessed in more depth in the next chapter (2.3) (5.1 percent of Haitian adults), and over one-third of the people with a savings/checking account also indicate With regard to the number of financial products used having a mobile account (8.3 percent of Haitian adults). by Haitians, 10.6 percent of adults have one financial Another 6 percent of Haitian adults reveal having a product, 9.5 percent have two, and 7.4 percent mobile account, but no checking or savings account have more than two financial products (see Figure at a bank or financial cooperative. This indicates that 1C). None has more than 5 financial products. Those mobile accounts have helped to reach hitherto unbanked with only one financial product are mostly holders of segments of the population. a mobile account (6 percent of Haitian adults “only” have a mobile account), again reiterating the important The level of financial inclusion in Haiti does not role that mobile accounts can play in fostering financial deviate between the narrow and broad financial inclusion. Figure 1: Financial Inclusion in Haiti A. Haitian Adults with a Financial Account B. Type of Financial Product held by Adults Checking or 25 21.4 savings account at a bank or financial 20 10 cooperative 15 14.3 10 10 Mobile account 6.4 5 3.2 1.9 0 Debit Card Checking and Loans at formal Mobile 6 savings financial institutions account accounts (including mortgages, loans, credits cards and C. Number of Financial Products held by Haitian Adults MFI or FC loans) 0.2 0 0.8 0 0 5 2.2 0 8.2 9.5 0 products 1 product 38.5 1 product 2 products 18.1 2 products 10.6 3 products 3 products 4 products 4 products 5 products 5 products 72.5 6 products 6 products 7 products 7 products 34.5 Source: WBG Financial Capability and Inclusion Survey (2017). Note: FC = Financial Cooperatives; MFI = microfinance. 9 Financial accounts in this report refers to checking, savings or mobile accounts held at formal financial institutions. 6 | Financial Capability and Inclusion in Haiti Given the recent increase in the level of financial 2.3 Usage of Individual Financial inclusion, Haiti is now in line with the average level Products of financial inclusion in other low-income countries. A comparison of the results of the Financial Capability 2.3.1 Usage of Accounts and Inclusion Survey (2018) and the Global Findex Survey (2014) shows that the share of the Haitian As is typical in low-income countries, the high level of population with a formal account has increased over informality in the Haitian economy and the elevated the last 3 years (see Table 2). This is in part due to an poverty levels likely affect the overall demand and increase in the share of the population with a checking need for checking and savings accounts. or savings account, as well an increase in the uptake of mobile accounts. Although the data from the Financial • Less than 10 percent of Haitian adults report Capability and Inclusion Survey and the Global Findex having formal employment as their main source Survey are not fully comparable,10 the difference between of income, or receiving a government transfe/ the two results is large enough to reveal an increase in pension that could be directly transferred into financial inclusion over the years. Haiti is now on par a financial account to save on cost and time. The with other low-income countries in terms of overall vast majority of respondents (more than three- financial account ownership. However, in comparison quarters) indicate being self-employed or relying on with the Latin America and Caribbean region, Haiti is agricultural income, with likely limited cash flows. still considerably behind, despite showing a stronger Roughly one-fourth of Haitians reveal periodically uptake of mobile financial services. sending or receiving remittances (within or outside of Table 2: Financial Account Ownership in Selected Countries and Regions (2014, 2017) Comparator Regional Countries Comparator Countries by Income Level Haiti (age 15+) (age 15+) FinCap Global Findex LAC Dom. Low- (2017, (2014, (emerging Bolivia Honduras Ghana Tanzania Uganda Rep. income age 18+) age 15+) only) Account 27.5 18.9 51.4 41.8 54.1 31.5 27.5 40.5 44.4 39.8 (aggregate) Account at a financial 21.4 17.5 51.1 40.7 54.0 30.0 22.3 34.6 27.8 19.0 institution Account, female 18.5 16.1 48.6 38.0 56.0 27.0 23.9 39.4 36.6 34.3 Debit card 5.1 4.1 40.4 23.1 22.6 14.2 6.6 9.8 17.8 11.5 Mobile account 14.3 3.8 1.7 2.8 2.3 3.4 10.0 13.0 35.1 32.4 Mobile account 15 3.8 1.3 0.9 0.8 3.0 8.8 11.8 29.0 26.6 (female) Sources: WBG Financial Capability and Inclusion Survey for Haiti (2017), and WBG Global Findex Survey for Haiti (2014). Note: The Financial Capability and Inclusion Survey for Haiti (2017) was applied to adults aged 18+ years, whereas the Global Findex Survey used as its cut-off age 15+ years. Thus, the figures are not fully comparable. LAC = Latin America and the Caribbean. 10 The Global Findex measures ownership for adults aged 15 and over, whereas the Financial Capability Survey in Haiti excludes the segment between 15 and 17 years of age, as they generally tend to be less financially included. 2. Financial Inclusion in Haiti | 7 Haiti), which could be channeled through and/or be As shown in Figure 3, financial account ownership kept in financial accounts (see also 2.3.2.). is positively linked with people’s income level, type of employment, as well as with living in Port-au- • With regard to keeping funds in a financial account, Prince or areas connected to national roads. Mobile most people indicate not being able to put money account holders live in mostly urban areas (23.2 percent aside or save. Only 28 percent of the population compared to 4.8 percent in rural areas) and belong to has money left after paying for food and other the highest income bracket (25.1 percent in the highest necessary items. In line with this, only 15 percent of income quartile have a mobile account compared to the population has some savings, with the remaining 3 to 12 percent for the other income quartiles). The 85 percent of Haitian adults not having money to distribution is similar for people with a checking and/ set aside (see Figure 2). Particularly less well-off or deposit account. However, women are slightly segments of the population, such as those living in more likely to have a mobile account, with 15 percent rural areas and those not connected to the national of women reporting having one as compared to road system, do not have savings (for example, 13.7 percent of men. This is a marked difference to 96 percent of people in the lowest income quartile). checking and deposit accounts, where women have a much lower incidence of having such accounts The urban population mostly puts their savings into (24.3 percent for men as compared to 18.5 percent formal financial accounts, whereas in rural areas and for women). among people with lower income levels, informal forms of savings prevail. Figure 2 shows that 71 percent Lack of affordability is the most frequently cited of those with some form of savings report putting their reason for Haitian adults who do not have a checking funds into a formal financial product. Formal financial or savings account. This points to a need to assess the products are the preferred choice for savings in urban adequacy of available products. Overall, 34 percent of areas and among people with higher income levels. For Haitian adults reveal not having enough money for an the rural population and people with limited income, account, and another 15 percent state that an account is informal savings continues to play a larger role, albeit “too expensive”. Thus, close to 50 percent of Haitian with a much lower overall incidence of savings. Figure 2: Formal and Informal Savings (by gender, urban/rural, and income) Total 9 4 1 85 Male 11 3 1 85 Female 8 5 1 86 Urban 15 6 2 77 Rural 3 3 0.3 94 First quartile 11 2 0.3 96 Fourth quartile 18 6 2 74 0 10 20 30 40 50 60 70 80 90 100 Only formal Only informal Formal and informal None Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 8 | Financial Capability and Inclusion in Haiti adults feel that they cannot afford an account. Another claim to regularly or sometimes have money left over 14 percent of the population states that they are actually have an account. Forty-six percent of people in geographically excluded from financial services (“too the highest income quartile reveal that they lack funds far away”). This is surprisingly low given the dearth to cover their basic needs, thus being unable to save. of financial service points in rural and non-connected Similarly, the feedback on geographic proximity of areas — an indication that the more pressing issue is financial services does not deviate much by geographic the lack of affordability. Given the high share of people location or between urban and rural areas. In Port-au- who claim that they cannot afford a financial account, an Prince, 18 percent of people consider financial services assessment of available products should be conducted to to be too far away, compared to 13 percent in non- identify potential gaps in the supply of financial services. connected areas. All this points to gaps in financial capabilities, which will be discussed in more depth in The data also points to underlying gaps in financial Chapter 3. capabilities that negatively impact the uptake of financial accounts. Thirty-six percent of Haitian adults voluntarily refrain from having a financial account. 2.3.2 Remittances and Other Financial Fourteen percent claim to not need an account, 7 percent Transfers reveal a preference for using cash, and 15 percent state A number of questions in the survey shed light that they do not trust financial institutions. This high on remittance patterns and how these funds are level of voluntary exclusion points to the existence of channeled. This covers all remittances, independent attitudes and behaviors in the population that need to of whether they are within Haiti or involve another be overcome to include them financially. Furthermore, country. As remittance payments are financial transfers, the results regarding the stated lack of affordability of the findings can serve as a proxy for how other financial financial services do not vary much between income transfers and bill payments are made in Haiti, as well levels, which indicates potential gaps in financial as the extent to which they involve formal financial capabilities, specifically budgeting and financial services. planning. For example, only 23 percent of those who Figure 3: Aggregated Financial Account Ownership (by gender, urban/rural, and income level) 60 50 47.9 39.5 40 31.8 29.2 30 27.5 25.7 23.6 24 21.4 20 15.3 13.8 10 0 Total Male Female First Fourth Rural - Urban - Rural- Urban- Rural - Urban- quartile quartile Port-au- Port-au- Connected Connected Non - Non - Prince Prince (RN) (RN) connected connected (PaP) (PaP) (H - lle) (H - lle) Source: WBG Financial Capability and Inclusion Survey (2017). 2. Financial Inclusion in Haiti | 9 The data reveal the different socioeconomic and products and investigating the type of financial service demographic characteristics of remittance senders points to be used. and receivers. Figure 4 shows that 17 percent of Haitians reveal periodically sending remittances, and Less than a third of remittances are channeled 22 percent confirm periodically receiving remittances. through formal financial accounts. The vast majority As is to be expected, Haitian remittance senders are of remittances are sent / received via money transfer predominantly from the higher income quartile, whereas operators (62 and 53 percent respectively) (see also the incidence of receiving remittances is much higher Figure 5). In rural areas, 40 percent of remittances are for the lower income quartiles. Furthermore, remittance received via informal channels (family, friends or over senders are predominantly located in Port-au-Prince the counter in stores), compared to only 8 percent in and other connected urban areas, whereas those who urban areas. Overall, only 24 percent and 12 percent of receive remittances are located in unconnected urban remittance senders and receivers, respectively, channel or connected / unconnected rural areas. The data also remittance funds through an account at a formal financial reveals some differences in terms of gender, with fewer institution. Mobile accounts are used by only 12 percent women sending remittances compared to men. Although of senders and 8 percent of receivers. For example, the survey results are not representative of the department 39.5 percent of respondents with a mobile account still level, the data shows that the two departments of Ouest and use Money Transfer Operators (MTO) to send the funds, L’Artibonite have a higher incidence of people sending whereas 18 percent of respondents with a bank account remittances, whereas people living in departments such use MTOs. Using the mobile account for sending / as Centre and Grande Anse mostly receive remittances; receiving funds is more frequently done in urban areas, in fact, up to 31.6 percent of respondents from the where mobile account penetration is higher. former group send remittances regularly as compared to as low as 4.4 percent in the latter. The departmental While most people appear to be satisfied with the differences point to the existence of remittance corridors quality of the remittance transfer services received, between departments. In this context, financial service the level of satisfaction is lower for recipients of providers could explore developing adequate financial remittances. In terms of sending remittances, the Figure 4: Remittance Trends (by gender, urban/rural, income, zone and strata 45 42 40 34 35 31 30 27 26 26 25 22 22 21 22 21 20 17 17 16 16 15 14 14 10 5 3 4 1 0 Total Male Female Urban Rural First Fourth Port-au- Connected Non- quartile quartile Prince (RN) connected (PaP) (H-lle) Receive remittances periodically (from Haiti or another country) Send remittances periodically (in Haiti or another country) Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 10 | Financial Capability and Inclusion in Haiti surveyed adults were the most satisfied using informal by informal channels (79 percent), mobile accounts channels and sending funds through their mobile accounts (78 percent) and banks/MFIs (76 percent). The level of (see Figure 6). In terms of receiving remittances, MTOs satisfaction with each service provider will be discussed are ranked first in satisfaction (84 percent) followed in more depth in Chapter 3.1. Figure 5: Remittance Channels (by gender and urban/rural) 100 2 2 1 3 8 90 27 27 28 80 40 70 57 61 62 71 72 60 63 50 53 55 50 40 46 30 24 24 24 20 13 14 24 12 10 26 10 17 16 12 12 13 8 8 7 5 3 0 Receive Send Receive Send Receive Send Receive Send Receive Send Total Male Female Urban Rural Haiti Gender Area Mobile Money Formal Institution (Banque/MFI) MTO Other Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: Other remittance channels include: collecting/sending money at shops; through a relative or friend; MFI = microfinance institution; MTO =money transfer operator. Figure 6: Client Satisfaction with Remittance Services 100 2 4 4 8 8 13 4 5 90 13 11 20 25 17 80 70 58 58 60 58 50 60 84 61 56 69 68 40 30 20 34 34 30 25 10 17 20 15 11 11 0 Receive Send Receive Send Receive Send Receive Send Mobile accounts Formal Institution MTO Other (Bank/MFI) Very satisfied Satisfied Dissatisfied Very dissatisfied Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: MFI = microfinance institution; MTO = money transfer operator. 2. Financial Inclusion in Haiti | 11 2.3.3 Usage of Loan Products among the lowest income quartile, where incomes are tighter and more volatile. For those population groups, Almost half of the adult population in Haiti currently a staggering 37 percent estimate having debt equivalent borrows money. Borrowing money is particularly to 2-12 months of income, and 23 percent have debt prevalent in rural and non-connected areas, where 64 and equivalent to over 12 months of income. Despite these 62 percent of adults, respectively, reveal having a loan elevated debt levels, no respondent indicated having (compared to 28 percent in urban areas and 24 percent borrowed more than he/she could afford, and few people in Port-au-Prince). As shown in Figure 7, the data also feel that they are at their limit with regard to borrowing suggests strong differences between income levels, with (see Figure 8). Almost all are confident that they could the incidence of borrowing decreasing steadily from the borrow more if needed. lowest income quartile (61 percent currently borrow) to the highest income quartile (27 percent currently The high demand for debt is mostly met through borrow). In line with this, regions with higher poverty informal credit from neighbors and friends, self- levels and a more rural population have a higher share help groups and/or solidarity groups. Figure 9 shows of adults with debt. that 36 percent of the population reveals having such an informal loan. The usage of informal sources of Debt levels appear elevated, particularly among borrowing is particularly high in rural areas (58 percent people living in rural areas. Overall, 43 percent of compared to 16 percent in urban areas, and 9 percent for Haitian adults have debt equivalent to more than 2 months Port-au-Prince). Furthermore, the use of informal credit of income. Twenty-six percent of Haitian adults report is also high for people in the lowest income quartile having debt levels equivalent to 2-12 months of income, (with 57.8 percent compared to 15.8 percent for the and another 17 percent have debt equivalent to more than highest income quartile). Women show a slightly lower 12 months of income. Higher debt levels are particularly tendency to borrow. widespread in rural and non-connected areas, as well as Figure 7: Level of Debt among Haitian Adults 100 90 80 35 30 44 46 70 53 53 54 63 71 75 66 60 24 50 24 23 23 40 18 20 17 30 13 13 20 39 14 43 31 13 30 26 26 27 19 22 10 14 10 0 2 2 2 3 2 2 1 2 2 2 3 le tile tile ) le ) N) N) e) e) tal aP aP ma Ma - ll - ll (R (R ar ar To (P (P qu qu Fe H (H ed ted ce ce d( st th t ted ec ec rin rin cte Fir ur nn nn -P ec -P Fo ne au Co Co nn au on rt- co rt- l- n- c Po Po n- n- ra ba No No Ru l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Less than or equal to one month of income Between 2 and 12 months of income More than 12 months of income No debt at all Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 12 | Financial Capability and Inclusion in Haiti Figure 8: Level of Confidence in Repaying Debts (% of respondents with debt) 100 90 80 35 30 44 46 70 53 53 54 2 2 66 0.3 63 60 0.3 71 75 1 1 50 2 1 2 0.1 0.1 0.1 40 1 2 67 30 63 1 55 1 53 20 45 46 44 28 33 37 10 24 0 le le tile tile ) ) N) ) e) e) tal aP aP RN Ma ma - ll - ll (R ar ar To (P (P d( Fe qu qu H (H ted ce ce d( cte st th ted ec rin rin cte Fir ur ne n -P ec -P Fo on on ne au nn au l-C C on rt- co rt- n- c ra Po Po n- n- Ru ba No No l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Yes, we could afford to borrow money if we wanted or needed it. Yes, we have borrowed more than we can really afford Yes, we have borrowed to our limit and could not afford to borrow more No Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Figure 9: Debt Forms and Levels among Haitian Adults Fourth quartile 11 14 2 73 First quartile 3 54 4 39 Rural 3 54 4 39 Urban 11 14 2 73 Female 5 34 2 59 30 Male 9 33 4 55 24 24 Total 7 33 3 57 0 20 40 60 80 100 Only formal Only informal Formal and informal None Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: “Formal only” includes adults who report having a mortgage, a formal loan from a bank/national savings and credit institution/MFI, or a credit card. “Informal only” covers those adults who report borrowing from moneylenders or family/friends. 2. Financial Inclusion in Haiti | 13 Loan products offered by formal financial institutions a lack of knowledge and understanding about available are only used by around 10 percent of the population, products, as well as gaps in overall financial capabilities. with some visible segmentation by population groups However, the analysis also points to supply-side gaps, and locations. As described in Annex A, 4.7 percent particularly in rural and non-connected areas. of the population currently have a loan at a bank, 2.8 percent have a mortgage and 3.5 percent have a loan from a microfinance institution or financial cooperative. 2.3.4 Other Financial Products Furthermore, 2.8 percent of the population has a credit Only people from the highest income quartile living card. In accordance with the stronger presence of banks in Port-au-Prince use investment products. Overall, in urban areas, loans and mortgages are predominantly 0.3 percent of the population confirms having an used in urban areas and by people with higher levels of investment product. income. On the other hand, loans from microfinance institutions and financial cooperatives have a stronger The share of the population with insurance products prevalence in rural areas and among people with lower is also small. Only 2.7 percent of the population has income levels. Around 30 percent of the borrowers a health or life insurance product, and 3 percent using formal institutions reveal having more than have a general insurance policy covering their car, one credit (mostly 2 credits) — particularly among household items or other possessions. Regardless of those with a credit card who also have a formal loan type of insurance, the uptake of insurance products is (50 percent of respondents). Some overlap between loans highest in Port-au-Prince and other urban connected areas from microfinance institutions and loans / mortgages (4.4 percent and 7.2 percent, respectively). Regarding from banks is also evident (25 percent of respondents geographic coverage, respondents in the departments reported having a microloan and a bank loan). of Ouest, Sud, and L’Artibonite more frequently report having a life or health insurance policy, whereas general The analysis suggests a large unmet need and insurance was comparatively frequently mentioned in potential for formal credit in Haiti. As will be the departments of Centre, Nord-Est and Ouest. discussed in Chapter 3, the lack of uptake is in part due to 14 | Financial Capability and Inclusion in Haiti 3. Financial Capability Financial capability, as defined by the World Bank Group (WBG) in this report, is the capacity to act in one’s best financial interest, given the socioeconomic and environmental conditions. It encompasses knowledge (literacy), attitudes, skills and behavior of consumers with respect to understanding, selecting, and using financial services that fit their needs (World Bank 2013a). 3.1 Knowledge of and Experience with This index ranges from 0 to 8, with 0 for those respondents who were not familiar with any service Financial Service Providers provider and 8 for those who were familiar with all of A dequate knowledge of and attitudes about financial service providers and their products are important elements of financial capability. them. The results for each financial service provider are discussed separately. If people do not know about service providers or have The population’s awareness about service providers misperceptions about what to expect, they are more varies greatly, as will be described in more detail likely to exclude themselves from using the available for each type of service provider. People are mostly services or to make inadequate choices. To gauge the aware of commercial banks, MTOs and mobile payment knowledge and previous experience of the population service providers.11 However, they lack knowledge for each type of institution, the survey sought feedback about financial cooperatives and microfinance about: (i) the population’s self-reported awareness institutions (Figure 10). Furthermore, the feedback of individual service providers and their products; received about mobile payment providers indicates gaps (ii) whether the people had already tried a service in understanding how to operate the mobile accounts. of a provider; and (iii) the level of satisfaction with These are important knowledge gaps because they the received service. Furthermore, the survey asked relate to those service providers who have a retail focus remittance receivers and senders, who reported being and who target the currently excluded segments of the dissatisfied with the services they received, about the population, particularly those with a lower income living reasons for their dissatisfaction. Based on the survey in peri-urban and rural areas. People who have a higher results, a financial institution awareness index was awareness of providers are predominantly the urban rich constructed, in which the knowledge of providers was residing in Port-au-Prince. summarized for different segments of the population. 11 Service providers include those who offer mobile accounts. 3. Financial Capability | 15 Figure 10: Self-reported Knowledge of Financial Institutions and Products A. Number of Institutions Familiar to People B. Knowledge Levels by Type of Institution 40 100 94 36.9 90 87 35 80 73 30 70 25.6 61 60 25 22.3 50 20 40 40 15 30 20 20 13 10 7.5 10 5.7 10 5 0 0 1.1 0.9 0 cha ney zat ce hou age vid nt banrcial ativ al pan nce tran ney 0 r s ses ers ks es ies r pro me per nci nge ani nan ion sfe Mo 0 1 2 3 4 5 6 7 8 ker ura Mo e coo Fina pay mm org rofi Bro Ins com Avg. FKA: 3.9 Co Mic ney Mo C. Financial Knowledge Scores in Rural Areas D. Financial Knowledge Scores in Urban Areas Insurance companies Insurance companies Financial Brokerage houses Financial 41 Brokerage houses cooperatives 42 cooperatives 43 23 42 13 39 18 40 12 0 38 17 94 89 10 Commercial Microfinance Commercial 94 98 Microfinance banks 93 92 6 1112 14 organizations banks 91 7 10 13 14 organizations 64 68 78 55 90 57 71 58 75 66 Money payment 70 82 64 Money payment 87 92 68 providers Money changer providers 95 Money changer 84 Money transfer Money transfer Rural - Port-au-Prince (PaP) (Avg. FKA: 3.79) Urban - Port-au-Prince (PaP) (Avg. FKA: 4.63) Rural - Connected (RN) (Avg. FKA: 3.87) Urban - Connected (RN) (Avg. FKA: 4.13) Rural - Non-connected (H - lle) (Avg. FKA: 3.55) Urban - Non-connected (H - lle) (Avg. FKA: 3.8) E. Financial Knowledge Scores by Income Level F. Financial Knowledge Scores by Gender Insurance companies Insurance companies Financial National 33 Brokerage houses saving and credit Brokerage houses cooperatives 42 17 4040 13 institutions 43 8 8 14 38 21 39 20 10 95 7 10 96 Commercial 95 93 90 7 11131314 Microfinance 11 14 Microfinance banks organizations Commercial 93 organizations 65 56 banks 69 79 58 71 61 62 85 59 Money payment 70 86 68 75 providers 81 Money changer E-money agents 85 Money changer 94 88 Money transfer Money transfer First quartile (Avg. FKA: 3.61) Male (Avg. FKA: 4) Second quartile (Avg. FKA: 3.75) Female (Avg. FKA: 3.98) Third quartile (Avg. FKA: 3.85) Fourth quartile (Avg. FKA: 4.41) Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 16 | Financial Capability and Inclusion in Haiti Although two-thirds of users report being satisfied an issue (lack of geographic proximity). As concluded with the services of their service providers, the survey in Chapter 2, the low levels of satisfaction point to a reveals important shortcomings in terms of quality need to revisit the services offered, as well as the quality of service, liquidity management and available of service delivery by the banks, MFIs and MTOs. information. Satisfaction is the lowest for MFIs and Furthermore, the data shows that people need more MTOs (at 51 percent and 59 percent, respectively), guidance and support from mobile payment service whereas satisfaction with financial cooperatives and providers to feel comfortable making transactions from insurance companies both reach 90+ percent. Fewer their mobile accounts. people in urban areas and with a higher incomes express being satisfied, regardless of service provider. As shown in various sections of the survey, these are segments of 3.1.1 Commercial Banks the population that have higher financial capabilities Most people are aware of financial services offered who make greater use of financial services. As such, by banks, but this does not necessarily translate into they are likely to have more exposure to services and an uptake of banking services. Figure 11 shows that have more knowledge to compare and judge the services 94 percent of the population is aware of commercial received. The feedback from recipients/senders of banks and their services. This high level of awareness remittances also reveals issues in the quality of services, only deviates slightly by location, gender, income, and indicating a need to improve customer service, increase education level. However, only 44 percent of Haitians transparency of fees and costs, and enhance the product indicate having already used a banking service. The design. Furthermore, the feedback also points to issues uptake increases with level of income and urban location with availability of liquidity (cash) at service points / connectivity to roads. However, it remains low overall. and that some consider the distance to the next service Figure 11: Awareness of and Experience with Financial Services Offered by Commercial Banks 100 96 96 98 94 93 93 92 94 94 93 92 90 80 72 71 72 70 70 68 67 68 65 65 62 62 60 58 51 50 42 41 42 42 38 39 40 36 32 32 30 20 10 0 le le tile tile ) ) N) ) e) e) tal aP aP RN Ma ma - ll - ll (R ar ar To (P (P d( Fe qu qu H (H ed ce ce d( cte st th t ted ec rin rin cte Fir ur e nn n -P ec -P Fo on ne au Co nn au C n rt- co co rt- l- n- Po Po n- n- ra ba No No Ru l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Percentage of Haitians who know about the services Percentage of Haitians who have used the services Percentage of those who have used the services who are satisfied Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 3. Financial Capability | 17 Regarding satisfaction with the received services, People who used financial cooperatives report being slightly more than two-thirds of the users of satisfied with the experience. Figure 13 shows that the bank products were satisfied, although feedback level of satisfaction with services used is 91 percent, highlighted dissatisfaction with the bank’s non- regardless of gender, location, income and level of transparent nature or high fees. The level of satisfaction connectivity. This is the highest level of satisfaction with is lower among people in urban areas, as well as those any service provider in Haiti. with a higher level of income and education. Regarding remittances, 13 percent of senders and 25 percent of receivers who use banks for transfers report being 3.1.3 Microfinance Institutions unsatisfied (Figure 12). They mostly complain about Most Haitians do not know about microfinance the lack of transparent fees. Further research should institutions, and few have experience using them. be carried out to assess this in more depth, particularly Figure 14 shows that only 13 percent of the population because the population segments that form the core reveals being aware of microfinance institutions, with banking clients are among the least satisfied. the level of awareness deviating slightly in terms of gender and level of connectedness. Of those with awareness, 30 percent had already used a service from 3.1.2 Financial Cooperatives microfinance institutions (that is, 4 percent in terms of There is a broad gap in the awareness about financial Haitian adults). As microfinance institutions focus on cooperatives and their services; however, those who providing credit, the comparatively low level of uptake are aware of financial cooperatives are more likely to of services could in part be due to the much more limited try their services. Only 40 percent of the population is range of financial services offered. aware of the services offered by financial cooperatives. The gap in awareness does not fluctuate much in terms The reported level of satisfaction with the services of location, gender, income, and education level. Of offered by microfinance institutions is the lowest those who report being aware of financial cooperatives, among all service providers. Only 51 percent of users 60 percent already used their services (compared to 44 report having been satisfied, with satisfaction higher percent for banks). In particular, people with a lower among female adults, those in the lowest income income and living in rural areas show a much higher quartile, and adults in non-connected areas. Regarding incidence of having already used services from financial MFI remittance services, the few remittance receivers or cooperatives. senders who report having used microfinance institutions Figure 12: Client Reasons for Dissatisfaction with Bank Remittance Services Send 18 13 29 9 17 15 Receive 2 10 8 54 11 6 8 0.1 0 10 20 30 40 50 60 70 80 90 100 Agent fraud Lack of liquidity Lack of accessibility (poor infrastructure) Fees are too high Non-transparent fees and other terms Poor customer service It was expensive to get to location It took several hours each time to get my money Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 18 | Financial Capability and Inclusion in Haiti Figure 13: Awareness and Experience with Financial Services Offered by Financial Cooperatives 100 93 91 90 92 91 90 90 91 90 87 89 90 80 70 60 50 43 42 42 43 42 40 38 40 39 40 38 40 29 29 30 24 26 24 26 24 22 21 23 18 20 10 0 le le tile tile ) ) N) ) e) e) tal aP aP RN Ma ma - ll - ll (R ar ar To (P (P d( Fe qu qu H (H ted ce ce d( cte st th ted ec rin rin cte Fir ur ne nn -P ec -P Fo n e au Co Co nn nn au rt- co co rt- l- n- Po Po n- n- ra ba No No Ru l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Percentage of Haitians who know about the services Percentage of Haitians who have used the services Percentage of those who have used the services who are satisfied Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Figure 14: Awareness of and Experience with Financial Services Offered by MFIs 70 65 63 62 61 60 51 52 49 49 50 46 45 40 29 30 20 13 14 13 14 12 14 14 13 11 11 10 10 5 5 5 4 4 5 3 3 3 4 2 0 le le tile tile ) ) N) ) e) e) tal aP aP RN Ma ma - ll - ll (R ar ar To (P (P d( Fe qu qu H (H ed ce ce d( cte st th t ted ec rin rin cte Fir ur e nn n -P ec -P Fo on ne au Co nn au C n rt- co co rt- l- n- Po Po n- n- ra ba No No Ru l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Percentage of Haitians who know about the services Percentage Haitians who have used the services Percentage of those who have used the services who are satisfied Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 3. Financial Capability | 19 mostly point to problems related to the lack of pricing The subdued uptake can in part be explained by the transparency. lower level of satisfaction among users, who point to supply-side problems, as well as limited attention to client needs and capabilities. Overall, only 62 percent 3.1.4 Mobile Payment Providers of Haitian adults who had already used the services of Although mobile accounts are a fairly recent mobile service providers report having been satisfied development in Haiti, many people are already aware with the service (the third lowest among all service of mobile payment providers and their services. providers). This is similar to the results for MFIs, where However, few report having used them. Figure 15 the level of satisfaction is higher in rural areas and shows that 73 percent of the population reports knowing among people with lower income levels. about mobile money providers and their services, with a higher level of awareness in urban areas and people The feedback received from remittance senders sheds with a higher income level. Nevertheless, to date, only some light on underlying problems, particularly 15 percent have used these types of services. These are the quality of service. Remittance senders mostly mostly Haitian adults living in urban areas, and Haitians complain about the complexity of transactions, whereas with a higher level of income. Thus, the findings indicate remittance receivers highlight gaps in the quality that mobile accounts are used to a larger extent by those of customer service. Figure 16 shows that two-thirds clients who are also potential clients of other financial of the complaints of remittance senders are related to service providers.12 difficulties in using the menu (“menu in English”, Figure 15: Awareness of and Experience with Financial Services Offered by Mobile Money Providers 100 90 87 80 81 80 75 75 76 73 71 71 70 68 70 63 65 64 65 64 62 62 60 62 60 60 57 50 40 31 30 25 21 20 15 14 16 12 9 8 10 3 4 0 le le tile tile ) ) N) ) e) e) tal aP aP RN Ma ma - ll - ll (R ar ar To (P (P d( Fe qu qu (H (H ted ce ce cte st th ed ted ec rin rin Fir ur ne t nn -P ec ec -P Fo n au Co Co nn nn au rt- co co rt- l- n- Po Po n- n- ra ba No No Ru l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Percentage of Haitians who know about services Percentage of Haitians who have used the services Percentage of those who have used the services who are satisfied Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 12 See for example the development of mobile accounts in Kenya and Paraguay. 20 | Financial Capability and Inclusion in Haiti “menu too complex”, or “send to wrong number”). The level of satisfaction with the services provided For receivers of remittances, the biggest concern is by MTOs appears low. Overall, less than 60 percent of the lack of customer service (including inadequately people who have used MTOs reveal being satisfied with trained agents). The feedback indicates that receivers of the services, which is the second lowest for all financial remittances rely to a large extent on agents to help them service providers. In urban areas and for people with navigate the mobile account platform. On the other hand, higher incomes, the level of satisfaction drops further to remittance senders, who use mobile accounts for the around 50 percent. transfer are more likely to try to carry out the transaction without external support. However, they find the menus Remittance senders and receivers confirm the low of mobile accounts difficult to navigate, and they would level of satisfaction with MTO services. Around require training and guidance to learn how to conduct a 15 percent of senders and 17 percent of recipients report financial transaction using their mobile account. Finally, not being satisfied. Senders largely complain about receivers also mentioned elevated fees as an issue, as limitations on transfer amounts, but also mention the well as issues with the reliability of the service (“lack of lack of accessibility in getting to the provider, the high liquidity of agents”, “service down times”). and non- transparent fees, as well as time-consuming transactions. For remittance receivers, the biggest complaint is the lack of liquidity of agents (Figure 18). 3.1.5 Money Transfer Operators However, people also complained about the poor and Haitian adults have the most knowledge and costly geographic accessibility of services, the time experience with the services provided by money spent in obtaining their money, as well as the lack of transfer operators. Figure 17 shows that 87 percent qualified and trained staff. Finally, 5 recipients and 3 of adults know about money transfer services, and senders also mentioned problems with being able to 71 percent have experience in using these services. identify themselves, as they did not have the required There is no difference between men and women, but national identification document. fewer people in rural areas and in the lower income quartile report having already used a MTO. Figure 16: Client-reported Difficulties with Mobile Money Remittances Services Send 14 12 37 14 12 12 Receive 19 8 15 15 2 5 5 15 8 8 0 10 20 30 40 50 60 70 80 90 100 Agent not trained enough Lack of liquidity Fees are too high Poor customer service Difficulty using the menu because it is only available in English Difficulty using the menu because it requires too many steps Sent to a wrong number Inadequate data privacy and protection with this mechanism Payment network/service was often down (not working) Though payment went through when it didn’t Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 3. Financial Capability | 21 Figure 17: Awareness of and Experience with Financial Services Offered by Money Transfer Operators 100 94 95 92 90 90 87 88 87 85 84 82 82 80 79 78 78 80 71 71 72 70 68 61 61 64 63 65 65 60 61 59 59 59 60 56 52 50 46 40 30 20 10 0 le le tile tile ) ) N) ) e) e) tal aP aP RN Ma ma - ll - ll (R ar ar To (P (P d( Fe qu qu H (H ted ce ce d( cte st th ted ec rin rin cte Fir ur ne nn -P ec -P Fo n e au Co Co nn nn au rt- co co rt- l- n- Po Po n- n- ra ba No No Ru l- n- Ur ra l- n- ba Ru ra ba Ur Ru Ur Percentage of Haitians who know about the services Percentage of Haitians who have used the services Percentage of those who have used the services who are satisfied Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Figure 18: Client-reported Difficulties with Money Transfer Operators Send 12 3 48 12 7 3 3 5 2 6 Receive 2 6 39 9 2 2 5 12 13 10 0 10 20 30 40 50 60 70 80 90 100 Agent fraud Agent not trained enough Lack of liquidity (receive)/Limitation in the amount that can be sent Lack of accessibility Fees are too high Non-transparent fees and other terms Poor customer service It was expensive to get to location Do not have approved government ID Process was very slow Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 22 | Financial Capability and Inclusion in Haiti 3.1.6 Insurance Companies and a financial literacy index was then obtained based on the Brokerage Houses number of correct responses provided by each survey participant. This index ranges from 0 to 7, whereby 0 The population in Haiti has limited knowledge about indicates the respondents who incorrectly answered insurance companies and brokerage houses. Only all the questions, whereas a score of 7 indicates survey 20 percent of the population are aware of services offered participants who answered all questions correctly. by insurance companies. Fewer still — 10 percent — The individual results are discussed in the following are aware of services offered by brokerage houses. paragraphs and compared with international experience. People who know and use insurance companies mainly live in urban areas (30 percent are aware compared to Haitian adults generally perceive to know about 9 percent in rural areas) and belong to the higher income interest and exchange rates, but people in rural areas quartile (see Annex B). In terms of uptake, 23 percent and those with lower incomes admit that they are not of Haitian adults in urban areas have some form of familiar with concepts such as insurance, inflation insurance, compared to 4 percent in rural areas. The and shares. Figure 19 shows that 96 percent of adults uptake of brokerage house services is more limited, have heard about interest rates and believe to understand and basically consists of richer, urban people living in what they mean. This level of perceived knowledge was Port-au-Prince. reported across gender, income levels and geographic locations. Most people also indicate having heard and Haitians who have used the services of insurance understood about exchange rates, but this awareness companies and brokerage houses are mostly satisfied. is higher in urban areas and among people with higher Satisfaction with the insurance services is generally high, incomes (for example, in urban areas 96 percent were ranging around 90 percent. Likewise, the overall level aware compared to 82 percent in rural areas). However, of satisfaction with the provided services of brokerage only 39 percent of people had heard about inflation, houses is over 80 percent. of which 66 percent claim to understand its meaning. Again, the self-reported awareness and understanding of 3.2 Knowledge of Financial Concepts inflation is much lower in rural areas and among people with a lower income level, but it does not deviate much People need to have a good knowledge of financial in terms of gender. However, there is a substantial gap concepts to make informed financial decisions in awareness and knowledge about inflation among the and select the most appropriate financial product. younger generation. Only 34 percent of those below the Having sufficient knowledge of financial concepts and age of 35 have heard about inflation and only 61 percent basic numeric skills is important for assessing product of those claim to understand the concept (compared information and understanding what type of product to 55 percent for people above 54 years old, of which is the most suitable. Furthermore, adequate financial 80 percent claim to understand the concept). skills allow for the comparison of costs across service providers, as well as the ability to assess potential risks. On average, Haitian adults were only able to correctly Therefore, expanding financial inclusion in a sustainable answer 3.6 of the 7 financial literacy questions. Figure way should go hand-in-hand with ascertaining solid 20A shows that 52.8 percent of respondents correctly financial skill levels. answered 3 or 4 questions. Only 1.7 percent of the adults gave the correct answers to all the questions, whereas To assess respondents’ financial knowledge and 0.7 percent did not answer any question correctly. numeric skills, a number of questions were included Furthermore, Figure 20B shows that the majority of in the 2017 Haiti Financial Capability Survey. On Haitian adults are able to perform simple division the one hand, survey participants were asked about (91 percent) and understand the concept of inflation their familiarity with individual financial concepts. The (61 percent) and the purpose of insurance (59 percent). answers reflected their self-perceived knowledge of However, they struggle with calculating simple interest concepts. On the other hand, seven question were asked to (57 percent provided an incorrect answer), computing test their de facto knowledge of concepts such as interest compound interest (75 percent provided incorrect wrong rates, inflation, compound interest, risk diversification, answers) and as well as comparing bargains (70 percent). and insurance (see Box 1). For the seven test questions, 3. Financial Capability | 23 Box 1. Financial Literacy Quiz Question 1. Imagine that five brothers are given a gift of 10,000 HTG. If the brothers have to divide the money equally, how much would each one receive? Question 2. Now, imagine that the five brothers have to wait one year to receive their part of the 10,000 HTG and inflation stays at 10 percent. In one year’s time, will they be able to buy: • More with their share of money than they could today • The same amount • Less than they could buy today • It depends on the types of things that they want to buy (do not read out this option) Question 3. Suppose you place 10,000 HTG into a savings account with a guaranteed interest rate of 2 percent per year. You do not make any further payments into this account, and you do not withdraw any money. How much would be in the account at the end of the first year, corresponding to the interest payment made? Question 4. How much would be in the account at the end of five years? Would it be: • More than 11,000 HTG • Exactly 11,000 HTG • Less than 11,000 HTG • It is impossible to tell from the information given Question 5. Let’s assume that you saw a TV set of the same model on sale in two different shops. The initial retail price you saw was 5,000 HTG. One shop offered a discount of 1,000 HTG, whereas the other one offered a 10 percent discount. Which one is a better bargain, a discount of 1,000 HTG or 10 percent? • A discount of 1,000 HTG • They are the same • A 10 percent discount Question 6. Which of the following statements best describes the primary purpose of insurance products? • To accumulate savings • To protect against risks • To make payments or send money • Other Question 7. Suppose you have money to invest. Is it safer to buy stocks of just one company or to buy stocks of many companies? • Buy stocks of one company • Buy stocks of many companies. Source: WBG Financial Capability Survey, Haiti (2017). 24 | Financial Capability and Inclusion in Haiti Figure 19: Perceived Knowledge of Financial Concepts and Products Shares 26 13 62 Inflation 26 13 61 Insurance 35 18 47 Exchange rate 84 5 11 Interest 96 3 2 0 10 20 30 40 50 60 70 80 90 100 Heard about it and know the meaning Heard about it but do not know the meaning Never heard about it Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Figure 20: Financial Literacy Distribution ( by number of correct answers and by financial concept) A. Financial Literacy Scores (number of correct answers) B. Financial Literacy (by type of financial concept) 30 26.9 Compound interest 25 75 25.9 25 Compare bargain 30 70 20 Simple interest 43 57 16.8 16.6 Risk diversification 49 51 15 Purpose of insurance 59 41 10 Inflation 61 39 6.5 4.9 Simple division 91 9 5 1.7 0 10 20 30 40 50 60 70 80 90 100 0.7 0 0 1 2 3 4 5 6 7 Correct Incorrect Source: WBG Financial Capability Survey, Haiti (2017). 3. Financial Capability | 25 The results of the financial literacy quiz also reveal Although Haiti is not the only country with low that many people overestimate their true knowledge. financial literacy scores, the results nevertheless reveal Figure 21 shows that the results of the self-reported substantial knowledge gaps of financial concepts awareness of concepts are not consistent with the that make it more difficult for people to choose the actual results of the financial literacy test. For instance, right product and shield themselves against risks. around 54 percent of respondents who did not correctly Table 3 shows the financial literacy results for Haiti answer the question regarding interest rate stated that are generally comparable with those of other countries they knew what an interest rate is. Likewise, less than in the region, as well as with developing countries for half of those that claimed to understand the meaning of which data is available. Although Haitians generally insurance where able to correctly describe the purpose seem to have good numeric skills and can compute of an insurance in the quiz, whereas 40 percent of those simple calculations, the noted lack of understanding of that claimed to not know about insurance happened simple interest will make it more difficult for people to to answer the question correctly. Regarding inflation, compare financial products and determine whether a more people were able to correctly answer the question certain financial product might be the better solution for in the quiz than had previously reported knowing and them. These are important financial capability gaps that understanding the concept (61 percent compared to need to be addressed. 39 percent). Figure 21: Reported versus Actual Financial Literacy 100 2 90 30 80 41 38 70 60 17 2 17 50 40 44 30 27 90 20 10 19 9 0 Interest Insurance Inflation Reported understanding & answered incorrectly Reported lack of understanding & answered correctly Reported understanding & answered correctly Reported lack of understanding & answered incorrectly Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 26 | Financial Capability and Inclusion in Haiti Table 3: Cross-country Comparison of Financial Literacy Scores Country Year Inflation Simple Interest Compound Interest Simple Division Colombia 2012 69 19 26 86 Mexico 2012 55 30 31 80 Peru 2010 63 40 14 90 Uruguay 2012 82 50 N/A 86 Haiti 2017 61 43 25 91 Lebanon 2012 69 66 23 88 Malaysia 2010 62 54 30 93 Mongolia 2012 39 69 58 97 Morocco 2012 43 50 31 90 Mozambique 2013 28 78 28 93 Philippines 2014 49 51 29 77 Senegal 2015 47 45 28 92 South Africa 2010 49 44 21 79 Zambia 2016 65 46 28 91 Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Data from the remaining countries comes from other Financial Capability Surveys conducted by the World Bank Group. Low levels of financial literacy are particularly Although financially included people are more likely prevalent in rural / unconnected areas of the country to have a higher financial literacy score, more than and among the population with lower incomes. Figure one third still lack basic financial skills. A lack of 22 shows that 51 percent of Haitian adults with a low financial literacy is usually cited as an explanation for financial literacy score (that is, 0 to 2 correct answers to the limited demand for financial services in developing the quiz) belong to the first income quartile as opposed countries. For instance, in a study in India and Indonesia, to 26, 13 and 10 percent for the other income quartiles, Cole and others (2009) found financial literacy to be respectively. Moreover, 78 percent of people with low an important factor in determining the demand for scores live in rural areas, and 72 percent live in areas with financial products, especially among the uneducated no connection to the national road system. Conversely, and financially illiterate segments of the population. 54 percent of respondents with a high score (that is, 5 to This positive relationship is also shown in Figure 22, 7 correct answers to the quiz) are high-income earners where 52 percent of financially excluded adults have a (fourth quartile), 67 percent live in urban areas and financial literacy index of between 1 and 3 compared 75 percent are either residents of Port-au-Prince or to 37 percent for those who are financially included. connected to national roads. Regarding financial Furthermore, 61 percent of adults with only informal education efforts of the government and other products have such low scores as opposed to 41 percent stakeholders, the findings imply that special attention with only formal products. However, the data also has to be given to helping people in rural/unconnected reveals important knowledge gaps of those that already areas of the country to understand basic concepts of use services, exposing them to undue risks and possibly financial literacy (interest rate, exchange rate, inflation). even higher costs. Assistance measures in urban areas can place a stronger focus on more complex concepts, such as risk diversification and compound interest. 3. Financial Capability | 27 Figure 22: Financial Literacy Scores (by income, urban/rural, zone and strata) A. Income Level B. Area 100 100 10 90 23 90 80 13 80 33 70 54 70 19 63 60 26 60 78 50 22 50 40 18 40 67 30 51 30 20 36 14 20 37 10 14 10 22 0 0 Low Medium High Low Medium High First quartile Second quartile Urban Rural Third quartile Fourth quartile C. Zone D. Strata 100 100 11 13 10 90 25 90 80 80 15 70 58 70 72 60 45 20 60 38 60 50 50 18 40 40 13 30 31 30 8 20 24 37 20 18 36 10 10 17 11 10 0 4 0 1 3 1 1 Low Medium High Low Medium High Port-au-Prince (PaP) Connected (RN) Rural - Port-au-Prince (PaP) Urban - Port-au-Prince (PaP) Non-connected (H-lle) Rural - Connected (RN) Urban - Connected (RN) Rural - Non-connected (H-lle) Urban - Non-connected (H - lle) E. Financial Inclusion F. Type of Financial Product 100 6 100 3 6 4 13 11 9 3 90 15 90 17 80 21 80 19 26 70 70 26 23 19 60 60 29 28 50 50 40 40 30 52 30 41 61 53 75 20 37 20 10 10 0 0 0 0 0 0 Financially included Financially excluded Only formal Only Both formal/ None Index of 0 Index between 1 and 3 Index of 4 informal informal Index of 5 Index between 6 and 7 Index of 0 Index between 1 and 3 Index of 4 Index of 5 Index between 6 and 7 Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: Low represents those people who answered 0-2 questions correctly, medium for those who answered 3-5 questions correctly answered, and high for those who answered 6 or 7 questions correctly. 28 | Financial Capability and Inclusion in Haiti 3.3 Financial Behavior and Attitudes and others to attitudes or motivations. The Financial Capability and Inclusion Survey in Haiti recorded Even if people possess a knowledge of basic financial different financial attitudes, motivations, and behavior concepts and available financial products, they may through diverse qualitative questions with various struggle to translate this knowledge into action. To measurement levels (nominal and ordinal). To identify identify the role that attitudes play in shaping individuals’ the main components of financial capability in Haiti, financial decisions and to see whether and how these a statistical procedure was applied to simultaneously attitudes translate into financial behavior, the survey quantify categorical variables while reducing the asked questions about different aspects (components) variance of the data. This procedure, known as Principal of financial capability. These aspects included attitudes, Components Analysis (PCA), reduces the original set motivations, and behaviors. This chapter provides an of variables to a smaller uncorrelated set of variables overview of identified strengths and weaknesses of (principal components) which aim to account for as Haitian adults regarding relevant financial behavior and much of the data variance as possible. The PCA method attitudes. provides a single indicator (or score) for each component. The scores range from between 0 (lowest score) and 100 The Haitian data set identifies 10 main components of (highest score). Table 4 presents the relevant attitudes financial capability, some of which refer to behavior that define each component. Table 4: Main Identified Financial Components from PCA Analysis Component or dimension Topic Whether an individual makes a plan and the frequency 1 Controlled budgeting Whether an individual makes a plan and the precision of the plan Whether an individual makes a plan and how frequently they stick to the plan Whether an individual has money left over and frequency 2 Thriftiness Whether an individual has money left over and how the money is used Whether an individual has a strategy for covering old age expenses 3 Planning for old age expenses Whether an individual has any strategies in place for covering old age expenses or is worried Whether an individual could cover unexpected expenses tomorrow 4 Planning for unexpected expenses Whether an individual could cover unexpected expense tomorrow or is worried about it Whether an individual runs short of money and why 5 Living with one’s means Whether an individual borrows money to buy food and frequency Whether a statement describes him/her - try to save 6 Saving Whether a statement describes him/her - try to have provisions Whether an individual agrees with the motivation statement/ time preference/ future will take care Whether an individual knows the amount spent and precision 7 Monitoring and working Whether an individual agrees with the motivation statement/ achievement/ work hard Whether/how often an individual buys unnecessary items 8 Non-impulsiveness Whether an individual agrees with the motivation statement/ impulsiveness/ do things without thinking Whether an individual is comfortable with level of borrowing 9 Discipline Whether an individual agrees that statement describing him/her - discipline Whether an individual checked terms and conditions of the product and how carefully 10 Choosing financial products Whether an individual consider many alternatives before deciding which product to buy Whether an individual searches until finding the best product for their needs Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Note: The PCA analysis performed in Haiti focused on 10 main components (or dimensions) that account for 68 percent of the total variance. Other dimensions were ignored because of their lower contribution to total variance. Principal components having eigenvalues greater than one were also prioritized. 3. Financial Capability | 29 3.3.1 Attitudes and Behaviors based on fourth quartile income earners surpass those in the first Principle Component Analysis quartile (by 40 to 12 percent, respectively) for having funds left, and 44 to 27 percent, respectively, for their The PCA test results show that Haitian adults obtain propensity to save. Regarding controlled budgeting, the best results for living within one’s means, followed those unconnected to the national road system fare better by planning for unexpected expenses; however, they than residents of Port-au-Prince by a score of 69 to 46 fall short of preparing for future expenditures and percent, respectively. generally lack discipline. Few reported having funds left over after covering necessities, and have not planned for unexpected events or retirement. They also lack 3.3.2 An Assessment of Individual discipline regarding expenditures. Figure 23 shows that Dimensions of Behaviors and Attitudes the participants’ average financial capability score is This section provides more details about the individual the highest for living within one’s means (89 percent). dimensions of behavior and attitudes. Planning for unexpected expenses is second with a grade of 66 percent, followed by controlled budgeting (54 percent). All other scores are below 50 percent, with Monitoring and working weaknesses found regarding discipline (score of 13 Few Haitians seem to try to maximize their income, percent), thriftiness (21 percent) and planning for old but many claim to monitor their expenditures. Over age expenses (24 percent). two-thirds of Haitians state that they are always looking for opportunities to improve their situation. This is Poor people living in rural areas are less likely to particularly the case for people living in urban/connected have funds left over; as such, they save less than the areas (that is, 75 percent in urban areas compared to 65 rich located in urban areas. Given the more difficult percent in rural areas). However, only 37 percent reveal financial situation, adults in rural and unconnected areas that they are working hard to be among the best at what are required to make more strenuous efforts to make they do – independent of their income level or location. ends meet and score better than those living in Port-au- Regarding the monitoring of expenditures, 55 percent Prince in terms of controlling their budgets. Figure 24 of the population claims to know exactly their personal shows that adults living in urban areas outperform their and household current/ day-to day spending levels, and rural counterparts by 38 to 10 percent, respectively, in another 17 percent report having an approximate idea terms of having funds left over, and 41 to 22 percent, about it. People in higher income brackets and those respectively, for saving. Regarding income levels, the living in urban areas (in particular, Port-au-Prince) feel more aware of their expenditures. For example, Figure 23: Average Financial Capability 82 percent of people in the highest income quartile Scores stated that they knew exactly or roughly their personal expenditures compared to 67 percent for people in the lowest income bracket. Controlled budgeting Choosing financial Thriftiness products 54 Controlled budgeting 41 Planning for old age Although many Haitians plan how they will spend Discipline 21 expenses their available funds, the level of detail and de facto 13 24 adherence to that plan is uneven. People with lower 47 30 66 income levels and those living in rural or unconnected Non- Planning unexpected areas report a higher tendency for making plans about impulsiveness 42 expenses how to spend the available money (77 percent compared Monitoring 89 to 66 percent, respectively). They are also more prone Living with one’s to making exact plans (61 percent of people from the and working means Saving lowest income quartile plan, compared to 47 percent for people in the fourth income quartile). However, when Source: WBG Financial Capability Survey, Haiti (2017). it comes to adherence to the plan, less than 50 percent 30 | Financial Capability and Inclusion in Haiti Figure 24: Financial Capability Scores report to strictly adhering to that plan. Whether people stick to the plan or not does not vary by level of planning A. Area detail. However, people with a lower level of income are Controlled budgeting more likely to stick fully or partially to their plans. This is also confirmed by a perception-based question about Choosing financial 58 Thriftiness products discipline (see discussion below). The data indicates that 52 42 people generally have a good attitude toward budgeting, Planning for Discipline 41 38 old age but that the quality of the planning needs to improve — 13 24 24 expenses as well as discipline in adhering to the plan. 12 10 Planning 46 22 63 71 unexpected Non- 47 expenses Thriftiness impulsiveness 41 87 43 41 Most Haitians do not have any money left over after 91 Monitoring Living with one’s paying for necessary items — even those among the and working means highest income group. Given the elevated level of Saving poverty in the country, it is not very surprising that a high Urban Rural share (72 percent) of Haitians state that they do not have B. Zone money left after paying for necessary items, such as rent, electricity, water and food. As is to be expected, people Controlled budgeting 69 in the lowest income quartile are the most financially Choosing financial 48 Thriftiness constrained, with only 12 percent reporting that they products 45 46 have money left over on a regular or occasional basis. 41 27 However, the majority of people in the highest income 38 21 Planning for Discipline 16 old age quartile (54 percent) also report not having funds left 14 13 25 23 24 expenses after paying for necessities. Based on survey feedback, 12 this reflects the fact that many people with higher income 46 24 Planning Non- 47 47 65 66 68 unexpected levels provide financial support to family members and impulsiveness 40 88 friends, thereby reducing their available budgets. Yet, 31 expenses 43 88 43 34 90 this also suggests gaps in planning ahead and preparing Monitoring Living with one’s for future emergencies. Overall, the likelihood of having and working means funds left increases with the level of connectivity to Saving roads and the level of urban connection. Port-au-Prince (PaP) Connected (RN) Non-connected (H - lle) Those Haitians who have funds left use them for a C. Income variety of purposes, with saving for emergencies Controlled budgeting and upcoming expenditures the most prominently Choosing financial 59 Thriftiness mentioned purposes, followed by the repayment products 48 44 of debt. Saving for emergencies / unforeseen things 39 Planning for and saving for a major known expenditure were 40 old age Discipline each mentioned by over 50 percent of the adults as 12 14 12 26 expenses 23 a possible use for their left-over funds. Twenty-six 47 22 54 72 Planning percent also indicate putting funds aside to bridge Non- 47 impulsiveness unexpected income fluctuations. However, 38 percent mention 41 87 expenses 43 44 repaying debt with the funds, thereby indicating that 92 Monitoring and Living with one’s they had previously borrowed to make ends meet. working means Other frequently mentioned purposes for the remaining Saving funds included spending it on the lottery (Borlette) First quartile Fourth quartile (28 percent), and remitting or lending it to others (20 percent each). Finally, around 30 percent of the Haitian Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). adults indicated investing some remaining funds in their business or other assets. 3. Financial Capability | 31 Living within one’s means are clearly related to gaps in financial capabilities, in particular, people’s capacity to plan ahead and prepare Despite their frequently frail overall financial for emergencies / unplanned events. Other reasons for situations, the majority of Haitians do not report overspending relate to the precarious financial situation running short of money or having to borrow money of many people in the country. For example, adults to purchase necessary items. Only 20 percent report indicated that they overspent due to having to support regularly running short of money, and another 7 percent others (39 percent), being exposed to fluctuations or indicate being occasionally short of money. Haitians insufficiencies in their income (44 percent) or suffering with a lower level of income as well as those living in business losses (12 percent). Furthermore, women also less connected areas report being more prone to running frequently mentioned not having been able to work, or short. For example, 34 percent of the rural population they were looking for work. revealed that they ran short occasionally to regularly, compared to 20 percent for people in urban areas. This is Remittances play an important role in making ends to be expected as people in more remote areas and those meet. In both urban and rural areas, people report with lower levels of income less frequently have funds using remittances for covering basic expenses, such left over and are more generally financially constrained as food and utilities (70 percent) and school expenses (see dimension on thriftiness). (26 percent). In addition, around one-quarter of remittance receivers in urban areas report using funds The underlying causes for Haitians being unable to to cover medical expenses, invest in one’s business or live within their means included mostly unforeseen house, or for buying something durable (see Figure 25). expenditures, overspending and variations/gaps in Furthermore, 33 percent of urban remittance recipients income. Overall, 80 percent of the adults indicated that also report saving funds for future expenses, which they unexpected expenditures led to budget overruns, and mostly keep in the form of cash. 69 percent also admitted overspending. Both reasons Figure 25: Remittance Usage (% of Haitian adults who receive remittances) 80 70 68 71 70 60 50 40 33 30 26 27 26 26 25 25 18 20 13 12 12 12 8 9 7 10 3 4 4 0 Pay for basic Pay for school Save for future pay for medical Use them for Buy durable Repay debts expenses expenses expenses bills business/or to goods repair the dwelling Total Urban Rural Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 32 | Financial Capability and Inclusion in Haiti Planning for unexpected expenses already experienced a sudden drop in income report having cut back on expenditures (30 percent) or having About one-third of Haitians confirm that they expect used money that they had saved (30 percent). Another to have a large expenditure to cover within the 21 percent indicated that they had pawned a possession and next 12 months. Larger expenditures (of at least one 15 percent used store credit. monthly income) are particularly anticipated in urban areas, especially in Port-au-Prince (72 percent of the interviewees compared to 28 percent in unconnected Planning for old age expenses areas). There is almost unilateral agreement among Haitian adults over the age of 60 that their pensions are currently Yet, less than one-third of those with an upcoming not enough to cover their expenses during retirement. larger expenditure feel that they can cover it in a Only 10 percent of the 60+ year old respondents confirm timely manner without borrowing money. Overall, that their sources of income are sufficient to cover their women seem to be better prepared for this than men, expenses. Women seem to be better covered their expenses with 38 percent of women indicating that they are able or are more adept at making ends meet, with 13 percent of to meet the expense compared to 28 percent for men. women indicating that they have enough funds compared There is also a large difference between urban and rural to 6 percent for men. Older people in urban areas also areas, with 43 percent of the urban population indicating have a higher incidence of reporting sufficient funds (with that they could cover this expenditure immediately, 12 percent compared to 8 percent in rural areas). compared to 11 percent in rural areas. Of those who indicated not being able to cover the upcoming major Many younger Haitians (under the age of 60) report expense, 54 percent indicated having strategies in having a strategy for old age, but few have actually place to be able to cover the expense without having to begun to put it into place. When asked about how they borrow money. plan to meet their old age expenses, half of the adults indicate that they want to continue working. Over one- Similar results are obtained when looking at third also expect some form of government pension, and Haitian’s ability to cover a sudden loss of the main another 15 percent hope to inherit funds. When asked income source or truly unexpected expenditures. In about the implementation of these plans, only 33 percent this case, 43 percent of the population in urban areas of adults with some form of plan had already made any could bridge a sudden income loss for a month or more provisions. Of those, only 27 percent feel that it would without having to borrow, whereas only 12 percent in be enough for old age. Taken together, the survey results rural areas could do so. Most alarmingly, 47 percent show that most Haitians are not at all prepared for of the population in rural areas could not even bridge old age. one week of income gap without having to borrow money. Regarding a truly unexpected expenditure, only Despite the quasi absence of retirement preparation, 28 percent of Haitians stated that they would be able to no Haitian expresses any worries. None of the cover it without borrowing. Again, the rural population respondents indicate being very worried. Overall, two- would be the hardest pressed, with only 13 percent thirds indicate not to worry at all, and the remaining stating that they could cover an unexpected expenditure, one-third only state being a bit worried. Furthermore, compared to 51 percent in Port-au-Prince. the level of worry does not visibly increase for people close to retirement. Most Haitians report worries about being unprepared for unexpected expenses or loss of income, although people with lower incomes seem Discipline more readily able to accept this as part of life. Only Haitians are disciplined when it comes to borrowing 59 percent of those in the lowest income bracket indicate funds, but generally reveal a rather mixed level of being worried about this compared to 77 and 73 percent discipline with regard to managing money and for the third and fourth quartiles, respectively. People controlling expenditures. Despite being financially in rural areas are also slightly less worried (68 percent constrained — and with a larger share of the population compared to 73 percent in urban areas). Those that had 3. Financial Capability | 33 reporting occasionally borrowing to make ends meet — Furthermore, 53 percent of Haitians believe that the few people feel that they have reached their limit with future will take care of itself, and 50 percent indicate regard to borrowing (4 percent). This suggests some that they live more for today than for tomorrow. This level of discipline toward incurring debt. However, strong focus on the “today” is in line with the described whereas 66 percent of the population report paying lack of preparedness for unexpected expenditures and bills on time, only 27 percent of the population describe retirement. It also explains why even many people in themselves as “being very disciplined” or “to some the highest income quartile do not feel that they can put extent disciplined” when it comes to managing money. money aside. Overall, the results suggest that people Of those self-perceived “disciplined” respondents, one- have a positive attitude toward savings, but they lack the third reveal in later questions that they had not paid discipline and financial management skills to actually their bills on time, and half admitted that they regularly do so. buy things that are not necessary — before buying the necessary items. Overall, the data points to a rather weak discipline in terms of financial management. 3.3.3 Cross-Country Comparison of Financial Capability Scores Financial capability scores of 16 comparator Non-impulsiveness countries show that Haiti fares well with regard to The lack of discipline is also confirmed by the share living within one’s means, but compares poorly with of respondents who buy unnecessary items, and the regard to planning for old age and saving. As shown frequency with which they do so. Overall, 62 percent in Table 5, Haiti had the highest score for living within of adults admit to buying unnecessary items (47 percent one’s means (89 percent) and fares favorably with regularly, and 15 percent occasionally) before having regard to planning for unexpected events (66 percent, bought food or other necessary items. Furthermore, that is, 2 percent better than the average). However, 39 percent reveal that they regularly buy unnecessary Haiti compares poorly with regard to planning for old items, and 13 percent sometimes buy things that age (24 percent, that is, 28 percent less than the average) are not necessary and which they know they cannot and savings (30 percent, that is, 15 percent lower than afford. Finally, when asked directly about their level of the average). impulsiveness, half of the population directly admits to being generally impulsive, sayings things before having thought them through, or thinking that money is there to 3.4 Revealed Attitudes regarding be spent. These revealed characteristics do not deviate Information Seeking and Dispute by gender, location or income level. Handling 3.4.1 Dispute Handling Saving The survey asks some questions aimed at Whereas the survey results show a generally positive understanding the population’s attitudes toward attitude toward saving, people also revealed a strong financial service providers and their experiences inclination toward living for today, and letting the in resolving conflicts and problems with them. future take care of itself. When asked about attitudes Respondents who had not yet experienced a problem toward savings, over half of the population claims to with a financial service provider were asked whether and try to save some money for the future, for unexpected how they would try to solve it. For those respondents events and / or without any specific purpose in mind. who experienced a problem with a survey provider in This self-perceived effort is much stronger in urban the last three years, the survey asked if and how they areas and among people with higher income levels solved it. The results are summarized in Figure 26 and (for example 42 percent of people in urban areas agree discussed below. with the statement that they make efforts to save for the future, compared to only 11 percent in rural areas). Overall, the results indicate a passive attitude among Similar results are evident between the lowest and Haitians toward resolving conflicts with financial highest income groups. Yet, about three of four adults service providers. Only 36 percent of Haitians having reveal not saving funds when asked another question. no conflict with a financial service provider said they 34 | Financial Capability and Inclusion in Haiti Table 5: Cross-country Comparison of Financial Capability Scores Country Controlled Planning for Living Saving Not Planning for Choosing Budgeting Unexpected within One’s over-spending old age financial Expenses Means Expenses products Armenia 74 64 68 46 84 100 59 Azerbaijan 35 N/A N/A N/A N/A 21 59 Colombia 80 59 75 45 79 67 57 Haiti 54 66 89 30 21 24 41 Lebanon 40 73 82 40 70 71 63 Mexico 52 64 78 57 70 65 59 Mongolia 65 N/A 84 62 71 N/A 49 Mozambique 74 45 N/A 42 63 40 34 Morocco 38 67 57 42 38 6 89 Nigeria 78 71 82 55 71 N/A N/A Philippines 44 67 43 46 42 29 51 Senegal 66 N/A 73 N/A N/A 70 20 Tajikistan 81 N/A 83 66 94 N/A N/A Turkey 60 68 68 30 66 72 52 Uruguay 71 55 81 44 84 60 N/A Zambia 51 67 87 24 N/A 46 43 Average 60 64 75 45 66 52 52 Sources: WBG Financial Capability and Inclusion Survey, Haiti (2017). WBG Financial Capability Surveys: Azerbaijan (2015), Morocco (2013), Mozambique (2013), Philippines (2014), Senegal (2015), Tajikistan (2012) and Zambia (2016), Note: N/A = not available would try to resolve the conflict if one occurred. Most of The majority of adults who did not try to solve their those willing to actively resolve the problem would use disputes with financial service providers did not trust a formal redress mechanism for resolving the problem. the available dispute resolution mechanisms or did Two-thirds felt that the issue would be generally not know where to go. Figure 28 shows that 76 percent resolved. of the surveyed adults who had a conflict with financial services providers without attempting to resolve it are Of the twelve percent of adults who already had a convinced that financial organizations are too powerful, conflict with a service provider in the last three years, and 68 percent do not believe that government agencies only one-fourth tried to actively resolve it. Almost all work properly. In this context, 31 percent also revealed adults who tried to solve their dispute with a financial that they do not feel legally protected as a consumer. service provider stopped using the services before The results point to a very low confidence in available the contractual expiry date. and about half submitted dispute resolution mechanisms. However, 48 percent a grievance to the company that sold the product also indicate that they do not really know where to go (see Figure 27). Most formally submitted a complaint for help, pointing to a stronger need to make available to the financial service provider to solve the problem. mechanisms more transparent. However, some also reported using a government agency for submitting the claim (31 percent), or approaching the legal courts (18 percent) or community elders (16 percent). 3. Financial Capability | 35 Figure 26: Approaches to Dealing with Financial Service Provider Conflicts Used financial products in the past 3 years Encountered a Did not conflict encounter a conflict 12% 80% Did not try to Would try to Would not try to Tried to solve it solve it solve it solve it 26% 74% 36% 64% Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). Figure 27: Action Taken to Redress Conflicts with Financial Service Providers 120 100 97 80 60 47 40 31 18 16 20 0 Stopped using the Submitted a Submitted a claim to Approached the Approached the services before the grievance to the appropriate legal courts service provider contract expired company which sold government authority through community me the product elders Source: WBG Financial Capability and Inclusion Survey, Haiti (2017). 36 | Financial Capability and Inclusion in Haiti Figure 28: Reasons for Not Solving Conflicts with Financial Service Providers 90 76 80 68 70 60 48 50 40 31 30 20 6 10 3 0 Financial Government I am not aware of The law does not I am too shy to I don’t have time organizations are authorities do not government agencies adequately protect do it to go through the too powerful work properly that I can approach consumers process for help Source: WBG Financial Capability Inclusion Survey, Haiti (2017). 3.4.2 Information Seeking and Media Usage 46 percent for men, respectively). People living in rural areas place a stronger focus on the family as a source of Roughly half of Haitian adults reveal that they information (46 compared to 37 percent in urban areas). seek information prior to making an important People with higher incomes and in urban areas tend to financial decision. People living in Port-au-Prince mention fewer sources. They rely slightly less on family are slightly more likely to seek information, with and financial institutions as sources, argely seeking 49 percent of Haitian adults confirming this as compared advice from third parties. Overall, Haitian adults who to 45 percent on average. However, when asked how seek information mentioned two sources. strongly they agree to always seek information, only 41 percent (less than 25 percent of the total interviewed Radio and mobile phones are the most frequently respondents) confirm that this reflects their behavior. used mass media tools, with utilization of media the This indicates that the culture of seeking information to highest among adults living in urban areas and adults take an informed decision is not yet widespread in Haiti, in the highest income bracket. More than three of four probably in part due to gaps in available information as Haitians have a mobile phone and listen to the radio, revealed in the Consumer Protection Diagnostic carried whereas only 31 percent reveal watching television. out by the World Bank in 2016. Twenty-seven percent have internet and 15-17 percent read the newspaper (see Figure 29). The share of adults The financial institutions are the most frequent who use the internet differs broadly between urban and source of information for those seeking information. rural areas, but the data also shows that adults living in When asked where they go to seek information, Haitian rural areas and those reporting lower levels of income adults most frequently mention financial institutions make less use of media than their peers in urban areas (77 percent of those seeking information), followed and from higher income quartiles. For example, Haitian by asking family and partners (42 and 36 percent, adults from the highest income quartile have a higher respectively). Community leaders, the local government utilization ratio than those of low-income quartile (first and the workplace do not play a large role, with only quartile) across the entire media spectrum: 85 versus 20, 18 and 7 percent, respectively, considering these 69 percent for radio, respectively; 83 versus 70 percent as sources for information. The data shows a slight for mobile telephones, respectively; 42 versus 17 percent difference in behavior by gender, location and income for television, respectively; 42 versus 12 percent for level. For instance, women less frequently mention internet, respectively; 19 versus 8 percent for national financial institutions and family as sources of information newspapers, respectively; and 22 versus 13 percent for (75 and 37 percent, respectively, compared to 80 and local newspapers, respectively. 3. Financial Capability | 37 Figure 29: Media Consumption by Social and Demographic Groups 100 100 90 85 90 85 84 78 77 76 78 80 71 80 71 70 70 70 60 60 50 41 50 42 45 40 31 40 27 26 29 23 21 30 20 21 30 17 15 15 15 14 20 17 20 11 8 11 10 10 0 0 Total Male Female Urban Rural Local newspaper National newsletter Internet Local newspaper National newsletter Internet TV Radio Mobile phone TV Radio Mobile phone 100 100 90 85 83 90 77 7877 77 78 78 76 80 76 80 6970 73 80 70 70 60 60 50 42 42 50 40 40 36 40 26 31 31 30 24 25 2219 30 26 23 22 18 23 21 20 13 12 17 161620 1716 20 8 10 10 0 0 0 0 First Second Third Fourth No school Primary school Lower secondary quartile quartile quartile quartile Local newspaper National newsletter Internet Local newspaper National newsletter Internet TV Radio Mobile phone TV Radio Mobile phone 100 100 100 90 80 76 80 70 60 50 39 40 30 28 30 30 26 19 20 10 0 0 0 Higher secondary Technical, vocational and tertiary education Local newspaper National newsletter Internet TV Radio Mobile phone Source: WBG Financial Capability Survey, Haiti (2017). 38 | Financial Capability and Inclusion in Haiti 4. Summary Assessment and Recommendations T he survey results point to a considerable potential for increasing access to financial services in Haiti through supply-side reforms. On the one The survey results also reveal substantial gaps in the financial capabilities of Haitian adults, which should be addressed through demand-side reforms. Whereas hand, many Haitian adults feel that they cannot afford most people seem to be aware of services offered by financial services, most likely due to the high costs of commercial banks, MTOs and mobile payment service such services. Furthermore, there is some evidence that providers, few know about financial cooperatives and people voluntarily abstain from using formal financial MFIs. Thus, they are likely unaware of financial products service providers. This is in part due to a lack of trust that could better cater to their needs. The level of financial and underlying attitudes toward service providers. literacy is also uneven, particularly for people in rural Haitian adults therefore largely rely on informal financial areas lacking skills to compute simple interest rates or services to cover their financial needs. On the other compare products — despite their ability to conduct hand, even the financially included Haitians still channel simple calculations. The lower level of financial literacy funds through money transfer providers when sending also impacts people’s capacity to plan and prepare for or receiving remittances. They report a weak level upcoming expenditures. Although people seem to make of satisfaction regarding services provided by formal plans regarding their expenditures, few actually adhere financial institutions. People mostly complain about the to them. Instead, many reveal a tendency for impulse quality of service, the lack of transparency regarding expenditures, even if financially constrained. The latter costs, as well as a lack of trust in dispute resolution is particularly prevalent in urban areas, where there are mechanisms. Overall, the findings reveal a need to adapt more opportunities for making such expenditures. These financial services to the necessities of people with lower gaps can be addressed through awareness campaigns and income levels, enhance the quality of services, and financial education measures. They can help increase increase the level of transparency of information. the level of preparedness for emergencies and the ability to plan ahead, instead of relying on informal or formal loans to bridge unforeseen expenditures. 4. Summary Assessment and Recommendations | 39 Recommendations (that is, remittance transfers).13 This would complement the qualitative information gathered in Supply-side measures this survey. To stimulate the responsible uptake of financial products • Based on the survey results and complementary and reach out to financially excluded segments of the information from the focus groups, core messages population, the survey results confirmed that a number should be developed. The core messages should of supply-side measures will need to be taken, including comprise a set of simple and easily understood the following: messages that could be used in financial education materials, training and outreach activities. The • A supply-side mapping of services should be existence of these core messages would help to conducted to identify gaps in geographic coverage harmonize financial education measures across of financial service points. Based on this, potential stakeholders, activities and tools. Short and easy outreach solutions should be discussed with financial to remember core messages could be developed for service providers, including the possibility to put in reiterating the importance of creating emergency place digital financial solutions. Furthermore, priority funds (use case) and could include the following areas for increasing financial service points should be messages: identified. – The importance of planning ahead and preparing • To enhance the quality of services of non-bank agents, emergency funds; capacity-building efforts should be undertaken to train the agents. Furthermore, oversight mechanisms from – Available financial products that could help the respective financial service provider should be Haitians put small savings aside; assessed and strengthened, and liquidity management – Information and sources to look for when deciding enhanced. on a savings product; and • To help create confidence and allow for better – Rights and responsibilities of a client when using a informed decisions, the information transparency savings product. about products and services needs to improve, and the complexity of available information should be • In parallel, a Financial Education Strategy should be reduced to facilitate enhanced understanding of the developed in collaboration with core stakeholders information provided. from the financial sector, non-profit organizations and the public sector (with prominent participation of the • Available dispute mechanisms need to be made more ministries and agencies involved in public education). transparent, and internal processes strengthened to The Strategy should include the following: create confidence among clients that their complaints will be taken seriously. – Briefly assess existing financial education measures and experiences; Demand-side measures: – Assess gaps in the outreach and thematic coverage To foster demand for financial services and their of existing measures, taking into account the responsible use, the following demand-side measures findings from this Financial Capability Survey and are suggested: the results of the focus group discussions; • A small number of focus group discussions should – Develop an action plan for financial education be carried out to gather more qualitative information measures to address, in a coordinated way, the about Haitians’ financial management approaches, identified financial capability gaps; this would be as well as their attitudes and behaviors toward using complemented and finetuned with existing financial financial services. Furthermore, the focus groups education measures covering the following areas: should help confirm possible “use cases”, around • Core messages. (see above) which financial education measures could center 13 Use cases in this context refers to individual financial transactions and needs of people. These could be used as examples to highlight the benefit of using formal financial services and providing the target population with information on their responsible use. 40 | Financial Capability and Inclusion in Haiti • Target audiences. The survey results point to cooperatives, MTOs, and non-bank mobile payment remittance senders (urban) and remittance provider). receivers (rural) as good target groups. • The BRH should also issue additional consumer • Teachable moments. The action plan should protection-related regulations to foster disclosure aim to reach the target audiences in moments and transparency of information for all financial of need. This could be the delivery of donor or services, harmonize terms and formats, and mandate government cash support to rural populations, the availability and form of complaint handling as well as the launch of new financial products mechanisms. such as the new card payment mechanism; it could be accompanied by measures to increase the number of service points in the country. Donors and NGOs • Topics to be covered: For rural areas, the survey Donors and NGOs can play an important role in fostering results point to vast gaps in knowledge about financial education, as they can include financial financial institutions and their services, gaps in education programs in ongoing initiatives. As such, they comprehension of simple financial concepts, can reach out to target audiences in a “neutral” way. To as well as in how to use remittances to create achieve this, the following is suggested: emergency funds to reduce dependence on • Donors and NGOs should collaborate in the informal loans. development of a joint action plan for financial • Type of media to be used: As revealed by the education, which is prioritized and adequately funded survey, radio appears to be the most readily (see above). available mass media tool to reach out to broad • Donors and NGOs should integrate financial segments of the population, followed by the education modules into their ongoing work sending of short text messages. Furthermore, programs. For example, financial education modules direct training courses or peer-to-peer learning could be integrated into work programs targeting courses appear promising, as people reveal a entrepreneurship development, agricultural and other preference for receiving information in person. livelihood programs. These programs are particularly • Timelines, funding and monitoring framework. suited for financial education measures that cover The strategy should also cover financial sources more complex topics, such as financial management. for the outreach measures, as well as indicators As such, they can benefit from repeated and hands-on to measure outputs, outcomes and impacts of messages. the measures. • Finally, donors could reassess options for channeling financial support through the formal financial system Regulatory and supervisory reforms to reach the target audience. They could so in a more efficient way, fostering greater financial inclusion. To complement the supply- and demand-side reforms, The introduction of new payment mechanisms the following regulatory and supervisory reforms should should ideally be accompanied by financial education be undertaken: measures for the target population. These should cover • The BRH should regularly compile and publish information about the new payment mechanisms information about the evolution of geographic (costs, features, underlying financial products, rights outreach of financial service points. This should and responsibilities as a client), as well as financial ideally include information about the type of financial capability training to enhance the target groups’ access points at the municipal level (branch, non-bank financial management skills, understanding of agent, point of sale [POS], automatic teller machine financial concepts and attitudes, as well as behaviors [ATM]), as well as the evolution of service points toward planning ahead and using financial services. by type of service provider (banks, MFIs, financial 4. Summary Assessment and Recommendations | 41 References Aker, J., R. Boumnijel, A. McClelland, and N. Tierney. Bruhn, Miriam, Luciana de Souza Leão, Arianna 2013. “How Do Electronic Transfers Compare? 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Diagnostic of the Financial Consumer Protection Framework in Haiti. Forthcoming. References | 45 Appendices A. Cross-tabulation of Financial Inclusion Table 6: Financial Inclusion Summary by Social and Demographic Factors Banks, National Saving and Payment Formal Financial MFIs Insurance Credit Institutions Providers Institution Formal account General/ Bank Credit E-money MFI ownership14 Loan Mortgage MTOs personal account card account credit insurance Gender Total 27.5% 21.4% 2.8% 4.7% 2.8% 66.9% 14.3% 3.5% 5.7% Male 29.2% 24.3% 3.5% 5.5% 3.4% 66.7% 13.7% 4.8% 5.8% Female 25.7% 18.5% 2.0% 3.8% 2.1% 67.2% 15.0% 2.1% 5.6% Area Urban 37.6% 27.9% 4.4% 7.0% 4.3% 81.2% 23.2% 2.9% 9.5% Rural 16.7% 14.6% 1.1% 2.1% 1.1% 51.7% 4.8% 4.1% 1.6% Income level First quartile 15.3% 12.9% 10% 1.8% 0.2% 52.3% 3.2% 4.7% 1.3% Second quartile 18.8% 13.9% 0.5% 2.1% 1.8% 58.9% 9.0% 3.4% 2.6% Third quartile 27.4% 21.8% 4.4% 4.8% 3.5% 65.8% 12.1% 3.7% 7.0% Fourth quartile 39.5% 30.3% 4.2% 7.6% 4.5% 80.8% 25.1% 2.6% 9.3% Employment Out of labor force 17.3% 14.8% 0.0% 0.0% 0.0% 63.9% 6.9% 0.0% 4.1% and retired Unemployed 21.8% 17.9% 1.7% 4.5% 2.1% 68.0% 10.2% 3.8% 5.1% Formally employed 34.5% 32.1% 0.0% 5.6% 9.3% 92.6% 28.9% 0.0% 18.4% Informally employed 32.7% 24.8% 4.1% 6.1% 4.3% 72.1% 18.4% 3.2% 6.1% Self-employed 28.2% 21.8% 2.9% 4.6% 2.6% 64.8% 14.7% 3.9% 5.7% 14 Formal account ownership (“financially included”) is defined in this Haitian financial capability study as the percentage of respondents who report having an account (by themselves or together with someone else) at a bank or another type of financial institution (formal credit, mortgage, credit from microfinance organizations or from the decentralized financial system, debit or credit card, formal savings, current or savings accounts), or personally using a mobile money service in the past 12 months. Appendices | 47 Banks, National Saving and Payment Formal Financial MFIs Insurance Credit Institutions Providers Institution Formal account General / Bank Credit E-money MFI ownership14 Loan Mortgage MTOs personal account card account credit insurance Level of education No schooling 24.6% 18.2% 2.2% 2.9% 2.3% 63.5% 13.6% 3.0% 5.2% Primary and 27.4% 21.8% 2.6% 5.0% 2.8% 67.1% 13.4% 3.5% 5.6% intermediate Secondary, vocational 30.5% 24.0% 3.7% 5.7% 3.2% 70.1% 17.2% 3.9% 6.4% and tertiary Household Size 1 to 3 members 25.9% 18.1% 2.2% 4.5% 3.1% 70.8% 14.5% 2.8% 5.6% 4 to 6 members 26.8% 22.3% 2.9% 5.1% 2.6% 64.4% 13.3% 3.7% 6.2% 7 to 9 members 30.6% 23.7% 3.2% 4.1% 2.6% 67.0% 15.9% 3.8% 4.7% Media Consumption 0 media 10.0% 4.7% 0.4% 0.5% 0.0% 63.7% 5.4% 1.4% 4.2% 1 media 20.5% 17.3% 1.6% 3.0% 0.7% 58.6% 9.3% 3.9% 3.9% 2 media 26.7% 20.5% 2.2% 2.7% 3.0% 61.7% 12.3% 4.9% 3.8% 3 media 28.7% 21.4% 2.9% 6.3% 2.6% 70.9% 15.9% 3.0% 6.2% 4 media 36.5% 28.8% 3.8% 7.1% 4.5% 77.5% 23.9% 1.2% 9.1% 5 – 6 media 35.3% 31.3% 8.7% 10.5% 5.5% 83.7% 14.4% 2.6% 14.0% Income Stability Stable income 27.6% 21.6% 2.7% 4.6% 2.6% 66.6% 14.3% 3.2% 5.4% Unstable income 26.6% 20.3% 3.4% 5.1% 3.7% 69.5% 14.2% 5.4% 7.8% Zone Port-au-Prince (PaP) 47.0% 36.2% 5.0% 9.4% 5.1% 83.9% 30.2% 3.5% 11.4% Connected (RN) 26.5% 20.3% 3.0% 4.3% 3.6% 66.2% 13.6% 3.5% 5.5% Unconnected (H - Ile) 16.6% 13.5% 1.3% 2.1% 0.7% 57.4% 5.4% 3.5% 2.4% Strata Unconnected (H - Ile) 23.6% 20.3% 0.9% 3.2% 3.3% 57.8% 8.1% 4.6% 5.3% Rural - Port-au-Prince 47.9% 36.8% 5.2% 9.6% 5.2% 84.9% 31.0% 3.5% 11.6% (PaP) Urban - Port-au-Prince 21.4% 18.5% 1.5% 3.1% 2.9% 55.0% 7.7% 4.3% 3.1% (PaP) Rural - Connected 31.8% 22.2% 4.5% 5.6% 4.2% 77.9% 19.7% 2.6% 8.0% (RN) Urban - Connected 13.8% 12.1% 0.8% 1.6% 0.0% 49.6% 3.0% 4.0% 0.7% (RN) Rural - Non-connected 24.0% 17.2% 2.5% 3.6% 2.6% 78.3% 11.8% 2.0% 7.1% (H - Ile) Source: WBG Financial Capability Survey, Haiti (2017).   48 | Financial Capability and Inclusion in Haiti B. Knowledge, Experience and Level of Satisfaction with Different Financial Service Providers Table 7: Awareness and Experience with Financial Services Offered by Financial Institutions Banks Financial Cooperatives Microfinance Organizations   Know Have Have used Know Have Have used Know Have Have used about used and was about used and was about used and was services services satisfied services services satisfied services services satisfied Total Total 94% 44% 68% 40% 60% 91% 13% 30% 51% Female 93% 45% 68% 38% 57% 92% 11% 24% 61% Gender  Male 96% 43% 67% 43% 61% 90% 14% 35% 46% Urban 96% 51% 65% 40% 52% 90% 13% 25% 53% Area  Rural 93% 36% 72% 41% 68% 91% 12% 37% 49% 1st Quartile 93% 35% 72% 40% 72% 91% 13% 38% 49% House- 2nd Quartile 93% 39% 70% 40% 66% 92% 11% 31% 66% hold Income 3rd Quartile 95% 41% 69% 39% 57% 88% 13% 34% 52% 4th Quartile 96% 53% 65% 42% 50% 90% 14% 24% 45% PAP 98% 59% 65% 43% 43% 90% 14% 25% 52% Zone Connected 94% 41% 67% 40% 60% 91% 13% 32% 38%   Unconnected 93% 37% 72% 39% 70% 91% 11% 33% 62% Money Transfer Operators Mobile Money Providers Know about Have used their Have used and Know about Have used their Have used and services services was satisfied services services was satisfied Total Total 87% 82% 59% 73% 20% 62% Gender Female 88% 82% 61% 75% 21% 62% Male 85% 83% 56% 71% 20% 63% Area Urban 93% 89% 53% 79% 30% 61% Rural 80% 74% 67% 66% 8% 70% 1st Quartile 79% 78% 64% 65% 5% 80% House- 2nd Quartile 86% 77% 68% 69% 15% 68% hold Income 3rd Quartile 85% 80% 60% 70% 19% 60% 4th Quartile 94% 88% 52% 81% 31% 60% PAP 95% 91% 46% 87% 35% 62% Zone Connected 88% 78% 61% 72% 19% 60% Unconnected 82% 80% 66% 65% 10% 68% Appendices | 49 Insurance Companies Brokerage Houses Exchange Houses Know Have used Know Have Have used Know Have Have used Have used about and was about used and was about used and was services services satisfied services services satisfied services services satisfied Total Total 20% 71% 89% 10% 36% 84% 61% 26% 93% Female 21% 66% 91% 10% 17% 91% 62% 23% 92% Gender Male 20% 76% 87% 10% 54% 81% 61% 28% 94% Urban 30% 77% 89% 13% 50% 84% 65% 27% 94% Area Rural 9% 49% 91% 7% 8% 84% 58% 24% 92% 1st Quartile 8% 49% 87% 7% 11% 100% 58% 22% 92% House- 2nd Quartile 13% 50% 80% 7% 0% 56% 31% 94% hold Income 3rd Quartile 17% 67% 89% 8% 5% 100% 59% 23% 96% 4th Quartile 33% 80% 90% 14% 60% 82% 68% 27% 92% PAP 40% 83% 90% 16% 63% 84% 67% 27% 95% Zone Connected 17% 68% 90% 10% 20% 72% 65% 24% 91% Unconnected 10% 46% 83% 6% 13% 100% 55% 26% 93% 50 | Financial Capability and Inclusion in Haiti C. Background Data on Haitian Financial Survey Figure 30: Estimated Population by Urban/Rural Figure 31: Estimated Population by Province Sud-Est, n = 165 6% Artibonite, n = 435 Sud, n = 225 8% 14% Centre, n = 150 Urban 5% n = 1200 40% Des Nippes, n = 120 4% Rural Grande Anse, n = 105 n = 1800 3% 60% Nord, n = 210 7% Ouest, n = 1380 46% Nord-Est, n = 75 2% Nord-Ouest, n = 135 5% Figure 32: Estimated Population by Gender Figure 33: Estimated Population by Age Group More than 54 years old n = 470 16% Urban Less than n = 1200 35 years old 40% n = 1409 47% Rural n = 1800 60% Between 35 and 54 years old n = 1121 37% Figure 34: Estimated Population by Figure 35: Estimated Population by Household Size Education Group 7 - 9 members Secondary, n = 541 vocational and tertiary No schooling 18% n = 678 n = 713 23% 24% 1 - 3 members n = 1184 39% 4 - 6 members n = 1275 Primary and informal 43% n = 1608 53% Appendices | 51 Figure 36: Estimated Population by Stable/ Figure 37: Estimated Population by Unstable Income Groups Income Group Unstable income Fourth quartile First quartile n = 361 n = 747 n = 757 12% 25% 25% Stable income n = 2639 88% Third quartile Second quartile n = 747 n = 749 25% 25% Figure 38: Estimated Population by Zone Figure 39: Estimated Population by Strata Urban - Non-connected Rural - (H - lle), n = 390 Port-au-Prince (PaP) Port-au-Prince (PaP) 13% n = 600 Non-connected (H - lle) n = 1005 20% n = 990 33% 33% Rural - Non-connected (H - lle) n = 600 Urban - 20% Port-au-Prince (PaP) n = 405 13% Urban Rural - Connected (RN) Connected (RN) Connected (RN) n = 405 n = 1005 n = 600 14% 20% 34% 52 | Financial Capability and Inclusion in Haiti