Burundi, slowly but surely moving towards financial inclusion

You are here

In 2012, the Bank of the Republic of Burundi (BRB) together with the Alliance for Financial Inclusion (AFI) Financial Inclusion Data Working Group (FIDWG) conducted a national financial inclusion survey to diagnose the state of financial inclusion in Burundi. The survey results showed that only 12.5% of the adult population had a bank account. [1] With this as a baseline, the BRB projected the financially included adult population to reach 25% in the next five years.[2] Barriers to financial access may be both socio-economic and physical. Across the country, monthly income for more than 60 percent of the population is less than 25,000 BUF ($20), and 40 percent of the population is illiterate.[3] Additionally, the long distance to access points is a practical barrier that prevents people from using available financial services.[4]


The creation of the Burundi Financial Inclusion Data Workbook was a truly collaborative process between MIX and the BRB. The BRB provided MIX with comprehensive datasets including access points, demographics, and usage. Then, MIX transformed those datasets into interactive data visualizations for ease of use and analysis. BRB’s reception to the final workbook was very positive, and MIX received many eager questions such as “how can we regularly update this workbook to use in our work?” and “can we do a joint analysis with MIX?” BRB’s engagement from start to finish was an important factor in creating a tool that is locally driven and accepted.


Collecting data is often the most challenging part in our work process, and MIX was especially excited to incorporate usage data into the workbook. Usage data is often very difficult to obtain, but is an important piece of data if we are to look at a comprehensive financial landscape. For example, information on physical access points helps us to understand the general financial landscape, but combining these data points with usage enables in-depth analysis on which institution types are serving which customer base, and more. These deeper insights in turn can provide better support to policy makers in their decision making.


One limitation to the data is that it only covers formal financial institutions supervised by the BRB. During our conversations with the BRB, we learned that while it is known that a substantial percentage of the population is participating in the informal financial sector, data is not available for these institutions such as SACCOs and other informal savings groups due to the lack of a regulatory body.


Access points:  Heavy concentration in the capital, but no Province left behind


Not surprisingly, most access points are concentrated in the country’s capital with approximately one third located in Bujumbura Mairie. The heavy concentration of access points is mainly due to the uneven distribution of commercial banks and ATMs. 92 out of 172 commercial banks and 66 out of 75 ATMs are located in Bujumbura Mairie. Despite this skewed distribution, not one Province is entirely lacking in access points. In addition, all institution types, other than ATMs, have a presence across all 17 Provinces of the country.


Figure 1.


The more or less even distribution of access points is also seen across different institution types. We see a wide range of companies with different access points totals in the “Number of companies by number of Access Points” chart, from smaller companies with 1-5 access points to larger companies with access points between 26 and 50, as well as more than 50 access points. This is true for all institution types with the exception of the government-run Post offices. The fact that there is no single dominant institution type with a heavily skewed number of access points can signify a balanced development for all institution types where each institution type serves different customer needs.  


Figure 2.



Usage: Microfinance Institutions vs. Commercial Banks


Thanks to the robust dataset from BRB, MIX was able to look at Burundi’s financial landscape beyond access points. Usage data including number of deposit accounts, total deposits, number of loans outstanding, total loan portfolios, and number of clients, is available by institution type. If we compare the usage data between commercial banks and microfinance institutions, we see a stark difference; for starters, MFIs have twice as many clients as commercial bank . (See Figure 3, Part A) While there are significantly more deposit accounts and loans outstanding at MFIs, much larger amounts of deposits and loans are at commercial banks. Both institutions types are relevant in the market, they have a vastly different client base: MFIs are more relevant to those at the bottom of the pyramid reaching a large number of poorer clients, and dealing in small financial quantities; commercial banks are serving a smaller, wealthier client base dealing with larger financial sums.


Figure 3.


We can also see from the Usage Time Series that both monetary value and account numbers of both deposits and loans have increased between 2012 and 2013 across all institution types. This is a positive sign as Burundi works towards the 25% inclusion goal.  



Next Steps


More than 80 BRB staff along with the Second Vice-Governor expressed very positive feedback to the MIX’s Burundi Financial Inclusion Data Workbook during MIX’s recent trip in Bujumbura. BRB expressed strong interest in taking this toolkit forward, aiming for regular update to the workbook, thinking towards future ownership, and seeking opportunities to conduct a joint analysis with MIX. Combining BRB’s local knowledge and MIX’s data visualizations, an in depth analysis can very effectively support informed decision-making at the policy level. MIX is thrilled to see the excitement from BRB and looks forward to continued collaboration on future projects to support the financial inclusion agenda in Burundi.