Cash Dominates Agriculture Sector as Financial Exclusion Persists in Vanuatu

Introduction

A recent survey conducted by the Financial Services Demand Side Survey in Vanuatu has shed light on the widespread use of cash income across sectors. The survey revealed that cash dominates agriculture, with 100% of adults working in this sector receiving their income in cash. In contrast, only 19% of public sector employees receive their income in cash.

Financial Exclusion in Agriculture

The survey highlighted the challenges faced by those working in agriculture in accessing financial services. Nearly 40% of adults working in this sector lack formal identification or a birth certificate, making it difficult for them to access formal financial services such as bank accounts.

Income and Bank Account Ownership

Income level is strongly correlated with bank account ownership. The survey found that:

• 73% of adults in the top income quintile formally banked
• Only 19% of adults in the bottom quintile have a bank account

Gender Disparities

The survey also revealed significant gender disparities in bank account ownership and financial exclusion. Women are less likely to have a bank account at each income quintile, with:

• 21% of women in the top income quintile having an account
• 78% of men in the same quintile having an account

Women are more likely to cite “not having enough money” as a reason for not having a bank account, particularly those in the lowest income quintile.

Key Findings

Here are some key takeaways from the survey:

• 100% of adults working in agriculture receive their income in cash
• Nearly 40% of adults working in agriculture lack formal identification or a birth certificate
• Income level is strongly correlated with bank account ownership
• Women are less likely to have a bank account at each income quintile
• “Not having enough money” is a major reason for not having a bank account, particularly among women in the lowest income quintile

Recommendations

To address financial exclusion and promote greater financial inclusion, we recommend:

• Developing innovative solutions to increase financial inclusion, particularly among vulnerable groups such as women and those working in agriculture
• Improving access to formal financial services, including bank accounts, for individuals lacking identification or birth certificates
• Implementing targeted interventions to address the financial exclusion of women, particularly in low-income households.

By addressing these challenges and promoting greater financial inclusion, we can help create a more equitable and sustainable economy in Vanuatu.