# Paying utility bills and school fees through accounts

In developing economies more than 1.3 billion adults who have an account nevertheless use cash to pay their utility bills or school fees.<sup>22</sup> Some 56 percent of account holders—1.3 billion adults—make utility payments in cash, and 24 percent—more than 500 million adults—pay school fees in cash. And 22 percent of adults with an account pay both utility bills and school fees in cash.

Shifting these payments to accounts represents an enormous opportunity for increasing the use of accounts and for enhancing the efficiency of payments. The opportunity is especially large in East Asia and the Pacific, Latin America and the Caribbean, and the Middle East, where more than 60 percent of account holders pay utility bills or school fees in cash.

When it comes to utility bills and school fees, however, the choice of whether to pay digitally or in cash often resides with the utility companies and schools. Encouraging them to provide appropriate and convenient ways for customers to make payments through their accounts could increase the efficiency of these payments on both sides.

# Sending or receiving domestic remittances through accounts

Another opportunity for increasing account use is to encourage account holders who now send or receive domestic remittances exclusively in cash or through OTC transactions to instead use their account. In developing economies this involves 355 million adults with an account—295 million (13 percent of account holders) who send or receive domestic remittances only in cash and another 60 million (3 percent of account holders) who do so only through OTC transactions. In Sub-Saharan Africa 35 million adults with an account send or receive remittances in cash or through OTC transactions.

# Saving formally

In developing economies 110 million adults with an account—5 percent of account holders—are savers but save only semiformally, by using a savings club or a person outside the family. Designing appropriate savings products tailored to their needs could encourage these account holders to use their account for saving. This opportunity to increase the use of accounts is especially large in Sub-Saharan Africa, where 28 million adults with an account—16 percent of account holders—save only through semiformal means such as a savings club.

## NOTES

1. The survey asked only about reasons for not having an account at a financial institution, not about reasons for not having a mobile money account.

2. The 2011 Global Findex survey collected similar data on self-reported barriers to owning an account at a financial institution. Comparison of these barriers over time is not straightforward, however, since the share of adults with an account increased by 11 percentage points between 2011 and 2014 while the world’s adult population also grew.

3. Yikona and others 2011; FATF 2013.

4. Demirguc-Kunt, Klapper, and Randall 2013.

5. To test robustness, the high-use category was also constructed so that it included use of a credit card in the past 12 months. This increased the share of adults with a high-use account by 2 percentage points in high-income OECD economies but led to no change in the results for any developing region.

> THE GLOBAL FINDEX DATABASE 68