COMCEC Financial Outlook 2018
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These figures simply indicate that Low income group of OIC countries need to develop their
markets to increase financial inclusion in order to support their economic growth and poverty
reduction.
Another indicator used to measure financial access is the number of bank branches per
100,000 adults that refers to the number of commercial bank branches per 100,000 adults in
an economy.
Figure 5: Bank Branches per 100,000 Adults
Source: Authors’ calculation from the World Bank Database
The above Figure on the number of bank branches is consistent with the bank account as both
clearly indicates a low level of financial access recorded for the low income group of OIC
countries which reached to 3.7 branches per 100,000 adults in 2016 while the world average
realized as 22.4 in the same year. Unlike the previous indicator, the UMIG and HIG groups of the
OIC have shown lower performance than the world averages across the selected period. Over
the period of 2012 to 2016, the rate has been realized around 14 branches for both OIC groups
of UMIG and HIG. Although the financial markets and instruments have been recorded
considerable growth and diversified significantly over the years, the branches have not
increased in parallel. Among other factors, this fact can be explained by the widespread usage of
branchless/internet banking.
As a result, the policymakers in the low income group countries should focus on enhancing the
banking activities and access to financial markets by investing on branchless banking initiatives
that have emerged as a cost effective option in recent years.
Data on access to financial markets are more limited. Especially for those countries with low
income level and undeveloped stock exchange markets, the data is very scant. Measures of
market concentration are utilized to have an idea on the level of access to stock and bond
markets. Here we used the Market capitalization excluding top 10 companies to total
market capitalization (%) to approximate access to financial markets. This ratio is calculated
as ‘value of listed shares outside of the ten largest companies to the total value of all listed
shares’.
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5
10
15
20
25
OIC-LIG OIC-LMIG OIC-UMIG OIC-HIG OIC-Average World Average
2012 2013 2014 2015 2016