Cash Income Dominates Across Sectors, Leaving Many Without Formal Identification or Bank Accounts

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A recent survey conducted by the Financial Services Demand Side Survey in Vanuatu has revealed that cash income dominates across sectors. The survey’s findings highlight significant disparities in financial inclusion, particularly for those working in agriculture and women.

Cash Income Dominates Agriculture Sector

• 100% of adults working in agriculture receive their income in cash, compared to only 19% of adults working in the public sector.
• This lack of formal documentation makes it difficult for these individuals to open a bank account or access other financial services.

Formal Identification and Bank Account Ownership

• Almost 40% of adults working in agriculture lack both formal identification and a birth certificate, making it challenging for them to access financial services.
• Income level is strongly correlated with bank account ownership:
  • 73% of adults in the top income quintile have a formal bank account compared to just 19% of those in the bottom quintile.
  • Among wealthier adults, those without a bank account were more likely to cite reasons such as “accounts are too expensive” or “distance” rather than “not having enough money”.

Gender Differences in Financial Inclusion

• Women are less likely to have a bank account at each income quintile compared to men:
  • 21% of women in the top income quintile report ownership compared to 78% of men.
  • Women are more likely to cite “not having enough money” as a reason for not having a bank account, particularly among those in the lowest income quintile.

Regional Disparities

• Bank account ownership is highest in Port Vila (78%) and lowest in rural areas (35%).

Conclusion

The survey highlights significant challenges faced by many adults in Vanuatu in accessing financial services and achieving financial inclusion. Addressing these issues will require targeted efforts to:

• Improve access to formal identification and bank accounts.
• Address the underlying barriers to financial inclusion faced by women and those in lower-income households.

By working towards financial inclusion, we can help individuals and communities in Vanuatu build a more stable and prosperous future.