Financial services consumer survey results released
Financial services consumer survey results released
The Bank of the Lao PDR and United Nations Capital Development Fund (UNCDF) last Friday released results of the first FinScope Consumer Survey Laos 2014 at a consultative workshop in Vientiane.
The workshop was chaired by Director General of the Financial Institution Supervision Department, Dr Akhom Praseuth.
The FinScope Survey, Developed by FinMark Trust and carried out in the field by the Lao Statistics Bureau, is a research tool to assess access to financial services in a country and to identify the constraints that prevent financial service providers from researching the financially under and un-served people.
The FinScope Survey is a nationally representative survey of how individuals source their incomes and how they manage their financial lives.
It also provides insight into attitudes and perceptions regarding financial products and services. To date, FinScope Consumer Surveys have been conducted in 21 countries, including Laos, Thailand, Myanmar and soon Cambodia in the Asean region.
In Laos, the FinScope Survey was conducted between November 2014 and January 2015, with a national sample of 2,040 adults aged 18 years and older.
FinScope has been brought to Laos by a joint Bank of the Lao PDR and UNCDF programme called ‘Making access to finance more inclusive for poor people’ (MAFIPP) with the Australian Department of Foreign Affairs and Trade (DFAT) as the main funder.
It is the first stage of the ‘Making Access Possible (MAP)’ diagnostic and programmatic framework to support expanding access to financial services for individuals and micro and small-businesses.
FinScope results and their interpretation by the invited stakeholders will guide the research on the supply-side and the regulatory environment to come-up with a diagnostic that identifies the main issues affecting the current retail financial system.
Once this diagnostic is vetted by the national stakeholders a roadmap will be drafted and debated likewise before presentation to the Prime Minister for endorsement and execution.
The survey revealed that 36 percent of adults are banked and 25 percent are financially excluded while 60 percent use informal mechanisms to manage their finances. Adults mainly use banking for transactions and saving purposes.
Some of the main reasons for banking identified were to money keep safe from theft; obtaining interest on saving and an easy and safe way to receive money. Of those 64 percent unbanked adults, the main reason is not distance to the nearest branch but an absence of need for bank services and understanding of how they work.
Insurance and remittances are the main drivers for the use of other formal products. On the other hand, informal products are mainly used for savings purposes through the use of village development funds, village banks and savings groups.
The survey also showed that 78 percent of the population has difficulty with maintaining financial commitments due to low and irregular income levels. Furthermore, lack of financial literacy hindered adults from accessing financial services.
