A well-known and important caveat, already mentioned in Section 1.1 above, needs to be recalled with regard to aggregating provider information on the number of accounts. The same individual, household or enterprise may have multiple deposit or loan accounts whether within a single intermediary or with many intermediaries. Furthermore, inactive accounts may not always be closed. While a well-managed intermediary should be able to identify the number of its distinct clients, and also distinguish between active and inactive accounts, this is not the case for all intermediaries in developing countries. (Furthermore, if complex multi-firm corporate structures are present, it is not obvious how the customer should be defined). A good credit registry can help uncover multiple borrowing relationships, but multiple deposit relationships will generally be difficult to discover from the providers’ side. All of this implies that the total number of accounts exceeds the number of banking relationships by an unknown factor.<sup>24</sup> Of the list of provider-sourced information, pricing of services is worth highlighting, given its importance as mentioned in determining whether poor households will buy the services in question. The underlying costs are not the only determinants of pricing. Traditional banking practice and lack of management interest in reaching a poor clientele can result minimum opening balance and minimum service fees for transactions accounts being set at fairly arbitrary levels which, though of little concern to the bank’s present customers, are a prohibitive barrier to those at low incomes (in some low income countries minimum balance requirements can equal several months of average per capita income). Pricing deserves much more attention, not only in the context of changing technology that can dramatically alter the unit cost for small transactions, but also given the non-competitive environment which is often observed.

# _Published information for specialized MFIs_

In the case of specialized microfinance providers, the situation is somewhat different, given their dual mandate of operating efficiently and reaching many target clients. A large number of country studies and studies of multi-country MFI networks throw light on the scale of outreach. Drawing on such evidence, a group at CGAP, Christen et al.(2004), have been able to put together a database setting out the number of clients reached by a wide range of microfinance suppliers, including not only specialized MFIs, but also other non-traditional intermediaries with large numbers of small clients.

The CGAP inventory aims to determine how many “poor and near poor” clients have savings or deposits at a broad range of “alternative financial institutions” including not only the “new breed” of specialized MFIs, but also for example mutuals, state agricultural and development banks. The CGAP database also includes postal savings systems and other savings banks even though they do not make microloans. As such it sets out to be a maximal data set for whatever could be regarded as alternative in the

> 24 For example, this proble m is likely the source of the huge discrepancy between the aggregate number of deposit accounts reported by Tanzanian financial intermediaries – 2.23 million – and the grossed-up number of households reporting a deposit account in the household budget survey – 0.42 million.

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