Pulse Lab Jakarta and the UN Capital Development Fund SHIFT Programme worked to analyse anonymised financial records from four financial service providers in Cambodia in order to investigate the factors affecting savings and loans mobilization, with a view to gender disaggregation.
Globally, there has been great progress in advancing financial inclusion. Yet, there remains a gender gap in account ownership, savings, credit, and payments behaviour. According to the World Bank Global Findex 2014, 58 per cent of women worldwide held an account, compared to 65 per cent of men.
Among the member states of ASEAN, men and women have almost equal access to financial services. For example, national financial inclusion data (FinScope) shows that in Cambodia there is only a small gender gap of +2 per cent; in Myanmar the difference is also small (-4 per cent); and in Lao PDR it is again slightly positive in favour of women (+1 per cent).
While men and women may have an equal access to banks and microfinance institutions, an open question remains as to whether they use financial services in the same way. This question sits in the context of borrower exit rates varying between 28 and 39 per cent per annum (Mix Market 2015), and 45 per cent of the savings accounts being reported dormant (Findex 2014).
Understanding financial inclusion with microfinance data
The project analysed a unique set of customer data obtained from four large Cambodian financial service providers? ?for the period 2010 to 2015 to capture an overview of loan and savings mobilisation. Readily available data from the management information systems of the financial service providers was gathered by the UNCDF SHIFT Programme and Pulse Lab Jakarta applied its data analytical expertise to uncover insights.
The research project curated around 5.4 million anonymised savings and loan records from 2.6 million customers to examine savings account dormancy and borrower exit. During the first phase of the research, the anonymised datasets from the four providers were analysed separately for comparative purposes and the data were disaggregated by gender. Data were analyzed using various statistical methods, such as descriptive analysis, distribution analysis and simple survival analysis using hazards ratio.
Although men and women were found to have equal access to credit and savings services, the actual usage patterns in terms of the loans and savings amounts mobilised were much lower for most women. In 2015, women on average had around USD 600 lower savings balance and USD1,200 lower average loan amount.
Figure 1: Average loan and savings amounts by gender
Initial results showed that the majority of customers (69 per cent) did not utilize their savings account, owning total deposits balances that did not exceed US$5. Women more often had dormant accounts (75 per cent) compared to men (55 per cent) and were more likely to drop out of the savings relationship. Savings mobilization remained heavily concentrated to the capital of Phnom Penh and a small number of depositors. There is therefore a significant untapped potential for savings mobilisation beyond Phnom Penh, and for women in particular, and a significant potential for reducing borrower exit.
Looking at loan mobilisation, the data showed men taking on higher segment-loans (SME-loans >USD5000 vs. micro <USD1500) compared to women. However, women who use loan products appeared to remain active with the financial service provider for longer. In contrast, men seemed to take larger loans at one time, but were less likely to take follow-up loans. While younger customers are often perceived to be less creditworthy, the analysis equally indicated that they are more likely to experience a lengthier relationship with the financial service provider.
These results highlight the need to tailor individual loan products better to the specific needs of women, and that there can be more extensive promotion of term deposits over savings accounts. The findings need to be validated by more extensive consultations with stakeholders.
Pulse Lab Jakarta and UNCDF SHIFT are currently undertaking the second phase of analysis on the microfinance datasets, to develop a survival model to investigate long term customer exit by incorporating socio-demographic variables (gender, age, marital status). The project could be extended to other Cambodian financial service providers as well as include data from 2016 and 2017 to ensure results cover more recent market events. The research would also benefit from additional qualitative analysis and focus group discussions.
Furthermore, the project is looking into other research applications, for example to understand how economic shocks or natural disasters influence saving and loan activity. Can we identify coping mechanisms, based on these insights, at an individual or community level, derive measures of resilience at a community level, or understand better the communal and societal recovery after a disaster?
These insights are in the context of the wider capacity development efforts of the regulator and financial service providers in Cambodia to use data analytics and insights derived from new data sources to shape policies and regulations. UNCDF SHIFT is piloting a family savings product to address some of the issues of savings account dormancy, and is working with the National Bank of Cambodia to integrate the findings into the national financial inclusion strategy.