Only 17 percent of adults in developing economies report having personally paid for health insurance, though the share is as low as 2 percent in low-income economies. Of adults working in farming, forestry, or fishing in developing economies, only 6 percent report having purchased crop, rainfall, or livestock insurance in the past year.

# **The Global Findex database fills an important gap**

A growing literature examines household finance and especially the borrowing and savings decisions of households.<sup>5</sup> Using evidence from the FinMark Trust (FinScope) surveys in 2009 in Kenya, one study shows that savings and credit services are used mostly for family-related purposes and less for business-related purposes.<sup>6</sup> This finding is consistent with another study showing that about half the volume of borrowing by poor households is for nonbusiness purposes, including consumption.<sup>7</sup> Still another study, conducting field experiments in Kenya, finds that people with access to savings accounts or simple informal savings technologies are more likely to increase productivity and income, increase investment in preventive health, and reduce vulnerability to illness and other unexpected events.<sup>8</sup> Yet because of the lack of systematic data on household use of financial services, empirical literature investigating the links between household access to finance and development outcomes remains scarce. The Global Findex database extends this literature by providing cross-country, time-series data on individuals’ use of financial services.

There have been earlier efforts to collect indicators of financial access from providers of financial services (financial institutions) as well as from the users (households and individuals). But those collecting individual- and householdlevel data have been limited and questions—and the resulting data—often are not consistent or comparable across economies. The Global Findex indicator on account penetration lends itself most easily to comparison. While the results are broadly consistent with those of earlier efforts, the correlation is imperfect and in a few cases there are nontrivial discrepancies.

These differences are likely to stem from three important variations in user-side data on the use of financial services. First, the definition of an account varies across surveys and respondents are often prompted in different ways. The Global Findex survey defines an account as an individual or joint account at a formal financial institution (a bank, credit union, cooperative, post office, or microfinance institution) and notes in the question text that an account can be used to save money, to make or receive payments, or to receive wages and remittances. It also includes those who report having a debit or ATM card. Other surveys may list an array of institutions (formal or semiformal) or products (savings account, checking account, pension scheme, Islamic loan) that are specific to the economy or region, while still others may simply ask, “do you have a bank account?” Second, there are important differences in the unit of measurement across surveys. While the Global Findex account penetration indicator refers to individual or joint account ownership, many earlier surveys measured account penetration

**5**

MEASURING FINANCIAL INCLUSION