Joint Project of the National Bank of the Republic of Belarus and the Alliance for Financial Inclusion (AFI) “Developing Regional Cooperation in Promoting Access to Finance in Eastern Europe and CIS”

Assessment and Analysis of

Consumers’ Demand for Financial Services

in Belarus National Survey Report (8000 respondents)

National Bank of the Republic of Belarus Institute of Sociology of NAS Belarus Minsk, 2016

CONTENTS 1 Basic conclusions 1.1National survey: profile of Belarus ...... 4 1.2 Further steps ...... 7 2 Methodology of survey ...... 8 3 Cash processing services 3.1 Use of a bank account ...... 13 3.2 Conducting bank account transactions ...... 19 3.3 Use of a debit and credit card, Internet Banking, Mobile Banking, overdraft services, and a credit card ...... 25 4 Loans and borrowings 4.1 Use of loans ...... 36 4.2 Use of borrowed funds ...... 41 5 Savings 5.1 Keeping savings with financial institutions ...... 43 5.2 Use of savings accounts ...... 46 5.3 Operations on savings account………………………………………………………………… ……49 6 Insurance ...... 51 7 Bills payment ...... 56 Figures Figure 1. Use of bank accounts in 2012 and 2016 ...... 13 Figure 2. Use of bank accounts in regions of Belarus ...... 14 Figure 3. Use of bank accounts in districts of Belarus ...... 15 Figure 4. Reasons and objectives for using bank accounts in 2016 ...... 16 Figure 5. Reasons and objectives for using bank accounts in 2012 and 2016 ...... 17 Figure 6. Reasons for refusal to use bank accounts in 2012 and 2016……………………… ...... 18 Figure 7. Frequency of depositing funds into a personal bank account in 2016 ...... 19 Figure 8. Frequency of depositing funds into a personal bank account in regions of Belarus…………...... 20 Figure 9. Methods of depositing funds into a personal bank account in 2016………………………… …….20 Figure 10. Methods of depositing funds into a personal bank account in regions of Belarus……………….. 21 Figure 11. Frequency of withdrawals from a personal bank account in 2016 ...... 22 Figure 12. Frequency of withdrawals from a personal bank account in regions of Belarus ...... 23 Figure 13. Frequency of transfers from a personal bank account in 2016 ...... …..23 Figure 14. Frequency of transfers from a personal bank account in regions of Belarus……………...... 24 Figure 15. Use of a debit card in 2012 and 2016 ...... 25 Figure 16. Use of a debit card in regions of Belarus...... 26 Figure 17. Use of Internet Banking in 2012 and 2016 ...... 26 Figure 18. Use of Internet Banking in regions of Belarus ...... 27 Figure 19. Frequency of online payments in 2012 and 2016 ...... 28 Figure 20. Use of Mobile Banking service in 2012 and 2016 ...... 28 Figure 21. Use of Internet Banking in regions of Belarus ...... 29 Figure 22. Use of Mobile Banking in regions of Belarus ...... 30 Figure 23. Frequency of payment through a mobile phone in 2012 and 2016………………………….…… 31

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Figure 24. Use of overdraft in 2012 and 2016 ...... 31 Figure 25. Use of overdraft in regions of Belarus ...... 32 Figure 26. Use of overdraft in districts of Belarus ...... 33 Figure 27. Frequency of using an overdraft in 2012 and 2016 ...... 33 Figure 28. Use of a credit card in 2016 ...... 34 Figure 29. Methods of getting cash in 2012 and 2016 ...... 35 Figure 30. Share of respondents using lending services in regions of Belarus……...... ………………. 36 Figure 31. Share of respondents using lending services in districts of Belarus ...... ……………………… 37 Figure 32. Market shares covered with each loan type in the common segment of lending services in 2012 and 2016...... …………………………… 38 Figure 33. Market shares covered by each loan type in the common segment of lending services in regions of Belarus… ...... 39 Figure 34. Reasons for refusal to use lending services in 2012 and 2016 ...... 40 Figure 35. Use of borrowed funds in 2012 and 2016...... 41 Figure 36. Borrowed funds usage frequency in 2012 and2016 ...... 42 Figure 37. Keeping savings with financial institutions in 2012 and 2016...... 43 Figure 38. Keeping savings with financial institutions in regions of Belarus ...... 44 Figure 39. Share of respondents keeping savings with financial institutions in regions of Belarus ...... 45 Figure 40. Share of savings kept with financial institutions in 2012 and 2016 ...... 46 Figure 41. Market shares covered by savings accounts of each type in the common segment of savings account in 2012 and 2016 ...... 47 Figure 42. Market shares covered by savings accounts of each type in the common segment of savings accounts services in regions of Belarus ...... 48 Figure 43. Reasons for using savings accounts in 2012 and 2016 ...... 49 Figure 44. Frequency of deposits into personal savings account in 2016 ...... 50 Figure 45. Frequency of withdrawals from personal savings account in 2016 ...... 50 Figure 46. Share of respondents using insurance services in regions of Belarus ...... 51 Figure 47. Share of respondents using insurance services in districts of Belarus ...... 52 Figure 48. Market share covered by each insurance type in the common insurance services segment in 2012 and 2016 ...... 53 Figure 49. Market shares covered by each type of insurance services in the common insurance services segment in regions of Belarus ...... 54 Figure 50. Reasons for refusal to use insurance services in 2012 and 2016………………………………….. 54 Figure 51. Reasons for using voluntary life and medical insurance services in 2012 and 2016 ...... 55 Figure 52. Bills payment methods in 2012 and 2016 ...... 56 Figure 53. Bills payment methods in regions of Belarus ...... 57

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1 BASIC CONCLUSIONS

1.2 National survey: Profile of Belarus In the period of June-July 2016, the Institute of Sociology of the National Academy of Sciences of Belarus conducted a national public poll in Belarus on the topic: "National public opinion poll on financial inclusion". The study focused on the analysis of the use of financial services by the population of Belarus, presented in different financial market segments. The survey was conducted among the Belarusian population aged 16 years and older on a nationally representative sample of 8,000 people. The study was aimed at solving the following tasks:  to study how the people in Belarus use the banking, lending, savings and insurance services;  to analyze the demand for financial products and services in the context of gender, age, education and territorial groups;  investigate the regional specificity of the use of financial services (at the level of region and district)

From the analysis of the conducted survey data we can draw the following conclusions. 3/4 of respondents have a bank account. In the recent few years, the Belarusians became more active in using bank accounts: the number of bank account holders increased by 5.5 per cent points as compared with the indicator of 2012. Among the respondents having no bank account the majority was formed by respondents aged 16-24 and 60 and older with a low level of education living in rural areas. Among the reasons for using a bank account the leading position occupies receipt of wages, financial help, grants and pension: more than 90% of bank account holders use their personal bank account for the listed purposes. Another popular reason among the population of Belarus for using bank accounts is payment of bills, keeping money safe and convenience in handling cash. The list of reasons why individuals prefer to use the accounts has not changed over the past few years. However, there is a noticeable variation in the share of respondents for whom each of the named reasons was decisive for using or not using a bank account. Thus the share of respondents using their bank accounts for payment of bills increased as much as three times, while the share of respondents using their bank accounts for keeping money safe dropped almost twice. Respondents with a higher level of education use their bank account for payment of bills more frequently than less educated respondents, i.e. they use not only obligatory services but voluntary learn to use other opportunities available to bank account owners. The most common reason for refusal to use a bank account reported by respondents was lack of money (every third of unbanked respondents), preference to keeping cash at home (every fourth), lack of benefits (every fifth) and the fact that someone else in the family already has a bank account (every fifth). As compared with 2012, there is a certain shift in the pattern of reasons for not having a bank account among the population of the country. It is reflected by noticeable decrease in the share of respondents who reported lack of money as the only reason for not having an account (from 52.4% in 2012 to 33.4% in 2016) and an increase in the share of respondents who do not use a bank account because someone in the family already has a bank account (from 7.2% to 18.3%). Young people aged 16 to 24 explain their reluctance to have a personal bank account because someone else in the family already has a bank account, lack of money, and noncompliance with the requirements imposed by banks on users of the said bank service. For respondents aged 60 and older, the most common barrier to having a bank account is lack of money, preference to keeping cash at home, and lack of noticeable benefits. The majority of respondents with a bank account never deposit money into the account (81.7%). Respondents aged 60 and older as well as respondents with incomplete higher, higher and postgraduate education replenish their accounts more often. The most active in this respect is the population of the Minsk and Brest regions; the lowest activity in this respect is observed among the respondents of the Grodno region.

Most often respondents replenish their accounts at a bank branch: this method of depositing funds is used by more than 70% among survey respondents in Belarus who replenish their account at least from time to time. Every sixth respondent replenish his/her account through an ATM, and 7.5% of respondents do this at a post office. The most popular way of depositing funds into an account for all age groups is through a bank branch. Using an ATM for depositing funds into their accounts is characteristic of respondents aged 16-44.

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Representatives of older age groups prefer to appear personally at a bank branch or post office for depositing funds into their accounts. 3/4 of respondent withdraw money from their personal bank accounts several times a month. And about one fourth of respondents do it every month. The share of respondents who withdraw money from their account less than once a month is insignificant and amounted to about 5%. This distribution of obtained data by this indicator is quite predictable, if we take into account the fact that the vast majority of respondents use their accounts, primarily for salaries, pensions and other social payments, as these payments are usually charged 1 -2 times a month. The inhabitants of the Brest region use their bank account for withdrawal of money most often while the less active in this respect are the inhabitants of the Vitebsk and Minsk regions. This figure hardly deviates from the national average in other regions. 4/5 of respondents with a bank account never use it for remittance of money. About every sixth of respondents does it every month. About 7% of respondents remit money from their personal account several times a year. Respondents with incomplete higher, higher and postgraduate education remit money from their bank accounts more often than respondents from other educational groups. Least active in this respect is the Minsk and Grodno regions, while the highest activity indicator is reported for the Mogilev and Brest regions. The share of respondents using a debit card exceeded 90% of bank account holders and increased by 3.6 percentage points as compared with 2012. Among respondents aged 60 and older, the share of debit card holders is much lower (about 1.5 times) that in other age groups. Internet Banking is used by nearly 37% of respondents having a bank account which is about 3.5 times higher than in 2012. Internet banking is most intensively used by respondents aged 16-34 as well as respondents with incomplete higher, higher and postgraduate education living in towns and urban-type localities. Online payments are never effected by 70.5% of the total number of respondents. A little bit more than 21% of respondents pay for purchased goods and services through the Internet one or several times a month. About 5% use the said service several times a year or less. In the recent 4 years the number of respondents who never used online payments noticeable dropped: in 2012 the share of those who never effected online payment through the Internet amounted to about 90%. The share of Mobile Banking users in 2016 amounted to about 23% of respondents with a personal bank account. As compared with 2012, there is a noticeable increase of this indicator which amounted to 9.4 percentage points. Payments by using the Internet or mobile phone are most commonly effected by respondents aged 25-34 with incomplete higher, higher and postgraduate education, living in towns and urban-type localities; rural people aged 60 and older with primary, basic and secondary education make use of this service least of all. One is inclined to think about regional features of using Internet Banking and Mobile Banking: both services are most intensively used by people of the Vitebsk region, but these services are less commonly used by the population of the Grodno region. Slightly more than 7% of respondents having a bank account make use of overdraft services. Overdraft is the only facility in the cash segment which declined in demand in the past 4 years. By using the overdraft the Vitebsk region is prominent among other regions of the country. The share of overdraft users in this region is about twice as high as the national average and almost three times as high as the number of overdraft users in the Brest, Gomel, and Brest regions. The share of respondents holding a credit card is less than 10% of the total number of respondents. Approximately 2/3 of the number of respondents having a credit card answered affirmatively to a question whether they have any funds available on the personal card. In the age groups of 16-24 and 60+, the share of respondents holding a credit card is much lower than in other age groups. The share of credit card holders also decreases with a decrease in the level of education. A similar pattern is observed with regard to the availability of funds on the card: the higher the level of education of the respondent, the more likely is the availability of funds on the credit card. If any need for cash arises, almost 2/3 of the respondents withdraw it through ATM, about every fifth gets it at a post office, and 8.4% more often get cash in a bank branch. As compared with 2012, the share of respondents who use ATMs for getting cash, increased by nearly 9 percentage points, and the recipients of funds in bank branches was about 7% less. ATMs for withdrawal of cash are often used by young respondents with a high level of education. About 24% of respondents use a lending facility. One respondent accounts for 1.26 loans, i.e. about each fourth of respondents who enjoyed lending services in the past 12 months uses more than one (most commonly two) loans at a time.

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Most common among the population are consumer loans (the market share is 31.6% in the common segment of lending services) and loans for purchase by installment (45.4%). Loans for residential construction/ purchase ranks third among the population in demand (10.9%). It may be noted that with no significant change in the number of respondents who use loans, there has been a significant redistribution of the market share by loan type over the past 4 years. This results from reduction in demand for consumer loans and a growing popularity of the purchase of goods with payment by installment among the Belarusians. Respondents younger 25 and older 60 use lending services less often than the respondents of other age groups.. Most active borrowers are the inhabitants of the Vitebsk region (every third). Borrowers are fewer in the Grodno region (every tenth). In the remaining regions of the country the share of people using loans is about 22% and practically do not deviate from the national average value. Among the reasons for not using lending services, respondents commonly reported too high interest rate on loans (45.7%), unwillingness to owe to anyone (36.8%) and lack of money for repayment of loans (28.0%) (Figure 34). It is noteworthy that the share of respondents who reported the first two of these reasons greatly increased as compared with 2012. Thus the share of respondents who refused to use loans due to too high interest rates on loans increased by nearly 20% in 2016, and the number of respondents for whom unwillingness to owe to anyone is the main reason of not using loans increased by nearly 17%. Normally, respondents aged 25-59 refuse to take any loan instruments due to high borrowing rates, respondents of the younger age group cite a lack of money for repayment of loan as a key barrier to borrowing, while respondents aged 60 and older explain their refusal from borrowing by unwillingness to owe to anyone. According to information received, 35.9% of respondents enjoy borrowings. The major part of them, 95%, prefers to borrow from relatives or friends in case of need. Most common borrowers are respondents aged 16-34. About 30% of borrowing respondents turn to a lender 1 -2 times a year, approximately the same number of respondents borrow money 1 -2 times a quarter. Every fifth in respondents has to borrow money almost each month, and every sixth in them borrows monthly. As follows from comparison with 2012 survey data2, respondents borrowed money more often over the past few years. This is probably an evidence of decline of their material well-being. As follows from the obtained data, the Belarusians are not active in using saving services: only 11.0% of respondents keep their savings with financial institutions. Moreover, this index reduced in 2016 as compared to 2012, when its value was 18%. We believe this to be also an indirect confirmation of the above assumption that the people’s well-being declines in recent years. Respondents with incomplete higher, higher and postgraduate education as well as older respondents entrust their savings to banks more often than respondents with lower level of education. The share of respondents keeping their savings in a financial institution is most high in the Minsk and Brest regions. About 43.7% of account holders having their savings accounts in financial institutions keep less than one fourth of all their savings on accumulation (savings) accounts. Approximately each fourth respondent reported that savings trusted to a financial institution amounted to 25-50% of the total savings held by him. About 8.8% of savers keep 51-75% of their savings in a financial institution, and each tenth entrusted more than ¾ of their savings to a financial institution. Shares of the market are distributed by savings account type as follows: almost 70% are short-term accounts, about 30% of the market are long-term accounts. Respondents aged 25-59 often keep their savings by using short-term savings accounts. Respondents aged 60 years and older are more likely to give preference to long-term savings accounts. Most often holders of savings accounts treat them as a way of multiplying their capital and as a way of keeping money safe: more than 50% of account holders reported that they opened an account for gaining an interest on deposited money; about 44% of account holders use the account because they are sure of keeping their money safe. Moreover, a wide-spread reason for holding a savings account is accumulation of money for emergencies (a “rainy” day): that was the reason reported by almost 27% of respondents. As reported by 22.5% of respondents, they are saving for projected future needs. Each fifth respondent places money on deposit to avoid sheer waste of money. For each sixth respondent the account is an instrument for accumulation of funds for a big-budget purchase. For respondents aged 16-59 the key reason for holding their savings in a financial institution is the possibility of drawing interest on deposited funds. Respondents aged 60+, in turn, most often deposit their funds on savings account for accumulation of money for emergencies (”rainy” day). About 40% of respondents holding savings accounts deposit money to their accounts several times a year, 27.3% of account holders add money to their personal savings accounts monthly, 11.3% account holders never deposit money thereto, and practically every sixth account holder deposit money to his/her account once a year

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or less often. 37% of saving accounts holders never withdraw money from their accounts, more than a half withdraw money several time a year and less often. Insurance services are quite popular among the population of the country: they are used by more than 55% of respondents. According to the survey, one respondent accounts for 1.56 insurance; normally, the Belarusians who resort to insurance services use one or two types of insurance (normally two types). Demand for this type of service has not changed in the last few years. About 2/3 of respondents who avoid using the services of insurance companies indicated the following reason not using services of the kind as no need. Every fifth respondent considers insurance services too expensive, and every seventh refused to use this type of service because of the lack of trust in insurance companies. The most popular types of insurance services among the population are property insurance and motor car insurance: they account for 40.9% and 33.3% of the total insurance market. Voluntary life insurance occupies the third place in prevalence among the population: it accounts for about 12% of this segment of the financial market. As to specific age dependence of using insurance services, the following can be stated. Among respondents aged 25-59, the preferred insurance services include car insurance, property insurance, travel and life insurance. Respondents aged 60 and over are more likely to use the property and livestock insurance services. These differences are largely due to the peculiarities of living and place of residence of the respondents. Respondents with incomplete higher, higher and postgraduate education are more likely to use the services of motor car insurance, life insurance and medical insurance As for payment of bills, almost 56% of Belarusians prefer to pay in cash at a post office. For this purpose, every other respondent refers to the bank, where also pays for consumed services in cash. About 40% of total respondents prefer to pay their bills by transferring funds from an Bank card. It is worthy to note that compared with 2012 the proportion of people who resort to this method of payment of bills increased significantly - by 11.5%, 11.6% of respondents pay their bills in cash at financial service provider’s point of payment (e.g. mobile operator, Internet provider). Among older age people with a low level of education living in rural areas, the share of those who prefer payment in cash at a post office is higher than in other groups. Percentage of people using their bank cards for payment of bills is the highest in the Grodno region and the lowest in the Gomel region. Payment for services at a post office is most often reported by respondents in the Grodno, Brest and Vitebsk regions, and least of all in the Minsk region. The share of respondents using a bank card for bills payment is higher in the Vitebsk and Minsk regions and the lowest in the Gomel region. The following sections of the report provide more details on the consumption of services provided in different segments of the financial market, including in comparison with the findings of a similar survey conducted in 2012. The main text of the report also includes the analysis of the situation in the context of gender, age, educational, territorial and regional groups (by region and district of Belarus).

1.3 Further steps As follows form the study, Belarus is characterized by a relatively low popularity of financial products and services. However, in the study period (2012-2016), there was a tendency for an increase in the level of using financial products and services presented in different segments of the financial market. We have stated the growing number of users of financial products and services among the population, in particular among vulnerable social groups (young people, older people, people of little education, residents of rural areas), having a lower level of competence in managing personal finances compared to other citizens. These changes indicate, firstly, to the efficiency of government measures aimed at improving the financial literacy of the population as a whole and the individual social groups and their involvement in the processes in the financial market of the country, and secondly, to the need for their continuation to reinforce the achieved effect and gain further improvement of investigated parameters. Based on the results of the study, we can identify several priority areas for further efforts in improving financial literacy of the population. Firstly, it is necessary to improve the financial infrastructure and create favorable conditions for expanding the use of financial products and services by the population. Secondly, it is important to ensure accessibility (territorial, information, etc.) of financial products and services to various socio-demographic groups. Thirdly, it is necessary to proceed with awareness-raising efforts to improve financial literacy of the population, form of a system of knowledge and financial management skills as well reasonable and responsible behavior in the financial sector.

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Fourthly, the priority target groups requiring special attention and approach are still young people (school pupils and students), pensioners and pre-retirement people, people with little education, and rural people. Fifthly, financial education should begin at school. In this regard, there is an urgent need to develop appropriate training programs for school children, holding various thematic events dedicated to various financial issues (competitions, themed weeks, actions, etc.); and Sixthly, it is necessary to intensify efforts to improve financial literacy across the regions, particularly in the Grodno region.

2 METHODOLOGY OF SURVEY In the period from June 7 to July 28, 2016, the Institute of Sociology of the National Academy of Sciences of Belarus conducted an empirical study on a nationally representative sample, aimed at identifying any peculiarities in the use of financial services offered by different segments of financial market in Belarus by the population. The survey was conducted in the form of personal interview at the place of residence of the respondents. The total volume of sample was 8000 people. The survey involved adult residents of Belarus aged 16 and older. In the survey, respondents were asked to answer 38 questions relating to the use of cash handling savings, lending and insurance services offered by financial market segments in the country. Similar study was conducted in Belarus in 2012. For Belarus, the sample size of 8000 respondents is sufficient to obtain valid and reliable results. Data obtained by using a sample of such size and design (i.e. the algorithm of its construction, for more detail see below) can be used to analyze the situation in the country as a whole as well as to conduct comparisons on a regional and district level. An interview form contains 4 sections. Section 1 includes questions concerning the use of a bank account, debit card, overdraft, online payment and mobile phone payment, ways of getting cash and paying bills by respondents. Section 2 includes questions about loans, credit cards and borrowing. Section 3 includes questions which make it possible to study consumer demand for services offered by savings service segment. Section 4 consists of questions about the use of insurance services. Questions in Section 5 were aimed at obtaining information about socio-demographic status of the respondent and the level of his/her well-being. To achieve the objectives of the study, we used a multi-stage proportional national sample. The sample was built up in several stages (steps). In the first stage, the total sample of population (8,000 respondents) was evenly distributed between the points of survey. Points of survey were deemed to mean 13 cities of Belarus with population over 50 thousand people and 118 regions (administrative-territorial units of second level, baseline). Sample size in the points of survey included 61-62 respondents in every major city and 61 respondents in each region. In the second stage, the sample was stratified by administration, i.e. each point of survey was assigned a share of respondents to be interrogates in localities of each type, including the population of regional capital, town of regional subordination, urban-type localities, and rural settlements. In the third stage, we developed a random route of selection of respondents in the points of survey. Routing restrictions were determined by locality type and limits for the number of respondents on the same street (no more than 10 people in the cities, up to 5 people in towns and rural areas), in the same house (not more than 5 people in the cities, not more than 3 in towns, and not more than 2 in rural areas), at the same one entrance (not more than 2 in the cities and towns, not more than 1 person in rural areas), in the same apartment (not more than one person for all types of localities). In the fourth stage, we calculated a job quota for each point of survey for all types of localities. The purpose of a quota job was to achieve precise correspondence between socio-demographic characteristics of respondents, selected to participate in the study and the structure of the population by quota parameters: gender, age and education. The statistical error does not exceed 5%. The total volume of the aggregate sample by locality type is presented in Table 1.

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Table 1. Sample size by type of locality Including Region District/town of regional Number of City/town subordination respondents Urban-type locality Rural locality Brest 62 62 - - Baranovichi 62 62 - - Pinsk 61 61 - - Baranovichi district 61 - - 61 Bereza district 61 38 16 7 Brest district 61 - 21 40 Gantsevichi district 61 27 - 34 Drogichin district 61 23 - 38 Zhabinks district 61 32 - 29 Brest Ivanovo district 61 22 - 39 Ivatsevichi district 61 24 - 37 Kamanets district 61 22 - 39 Kobrin district 61 36 6 19 Luninets district 61 31 - 30 Lyahovichi district 61 22 - 39 Malorita district 61 28 - 33 Pinsk district 61 - 23 38 Pruzhany district 61 22 - 39 Stolin district 61 20 - 41 Total for region 1161 532 66 563 Vitebsk 62 62 - - Novopolotsk 61 61 - - Orsha 61 61 - - Polotsk 61 61 - - Beshenkovichi district 61 - 24 37 Braslav district 61 20 - 41 Verhnedvinsk district 61 18 - 43 Vitebsk district 61 - 18 43 Glubokoje district 61 27 - 34 Gorodol district 61 29 - 32 Dokshitsy district 61 21 - 40 Dubrovno district 61 29 4 28 Vitebsk Lepel district 61 30 - 31 Liozno district 61 23 - 38 Miory district 61 25 - 36 Orsha district 61 14 1 46 Polotsk district 61 - 16 45 Postavy district 61 31 - 30 Rossony district 61 28 - 33 Senno district 61 26 - 35 Tolochin district 22 9 30 Ushachi district 61 - 22 39 Chashniki district 61 40 - 21 Sharkovshchizna district 61 - 23 38 Shumilino district 61 - 30 31 Total for region 1526 628 147 751

Gomel 62 62 - - Bragin district - Gomel 61 24 37 Buda-Koshelevo district 61 16 - 45 Vetka district 61 25 - 36

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Продолжение Таблицы 1 Gomel district 61 - 61 - Dobrush district 61 27 23 11 Yelsk district 61 33 - 28 Zhitkovichi district 61 24 - 37 Zhlobin district 61 43 - 18 Kalinkovichi district 61 36 - 25 Korma district 61 - 29 32 Lelchitsy district 61 - 24 37 Lojev district 61 - 30 31 Mozyr district 61 52 - 9 Narovlya district 61 43 - 18 Oktyabr district 61 - 28 33 Petrikov district 61 19 - 42 Rechitsa district 61 38 2 21 Rogachev district 61 34 - 27 Svetlogorsk district 61 47 - 14 Khoiniki district 61 38 - 23 Chechersk district 61 30 - 31 Total for region 1343 567 221 555 Grodno 62 62 - - Berestovitsa district 61 - 20 41 Volkovyssk district 61 36 10 15 Voronovo district 61 - 18 43 Grodno district 61 14 - 47 Dyatlovo district 61 15 10 36 Zelva district 61 - 23 38 Ivje district 61 20 - 41 Korelichi district 61 - 22 39 Grodno Lida district 61 44 - 17 Mosty district 61 30 - 31 Novogrudok district 61 36 - 25 Ostrovets district 61 21 - 40 Oshmyany district 61 28 - 33 Svisloch district 61 21 - 40 Slonim district 61 44 - 17 Smorgon district 61 39 - 22 Shchuchin district 61 19 - 42 Total for region 1099 429 103 567 Zhodino 61 61 - - Berezino district 61 29 - 32 Borisov district 61 47 - 14 Vilejka district 61 31 - 30 Volozhin district 61 24 - 37 Dzerzhinsk district 61 38 - 23 Kletsk district 61 20 - 41 Kopyl district 61 18 - 43 Krupki district 61 20 - 41 Logojsk district 61 18 25 18 Lyuban district 61 19 - 42 Minsk district 62 9 26 27

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Table 1continued Minsk 62 62 - - Molodechno district 61 41 - 20 Myadel district 61 14 11 36 Nesvizh district 61 20 26 15 Pukhovichi district 61 19 8 34 Slutsk district 61 39 22 - Smolevichi district 61 21 - 40 Soligorsk district 61 45 - 16 Stary Dorogi district 61 30 - 31 Stolbtsy district 61 22 1 38 Uzda district 61 24 - 37 Cherven district 61 18 9 34 Total for region 1466 689 128 649 Bobruisk 62 62 - - Mogilev 62 62 - - Belynichi district 61 - 29 32 Bobruisk district 61 - - 61 Bykhov district 61 29 - 32 Glussk district 61 2 26 33 Gorki district 61 42 - 19 Dribin district 61 - 16 45 Kirovsk district 61 24 - 37 Klimovichi district 61 33 1 27 Klichev district 61 26 - 35 Mogilev Kostyukovichi district 61 37 - 24 Krasnopolje district 61 - 33 28 Krichev district 61 33 - 28 Krugloje district 61 - 29 32 Mogilev district 61 - 58 3 Mstislavl district 61 26 - 35 Osipovichi district 61 37 - 24 Slavgorod district 61 33 - 28 Khotimsk district 61 - 34 27 Chaussy district 61 31 - 30 Cherikov district 61 33 - 28 Shklov district 61 33 - 28 Total for region 1405 543 226 636 The basic parameters of the sample by gender, age, education and place of residence for respondents are given in Tables 2, 3 and 4.

Table 2. Distribution by gender and age Table 3. Distribution by gender and region Gender of respondent Gender of respondent Male Female Total Gender of Male Female Total respondent 16-24 15.6% 11.3% 13.3% Brest province 19.1% 19.0% 19.1% Vitebsk 25-34 21.2% 16.8% 18.8% province 18.6% 18.1% 18.3% 35-44 16.2% 15.8% 15.9% Gomel region 16.2% 17.3% 17.8% 45-59 26.9% 30.5% 28.9% Grodno region 13.8% 13.7% 13.7% 60 and older 20.1% 25.6% 23.1% Minsk 17.7% 17.5% 17.6% Total 100.0% 100.0% 100.0% Minsk region 15.3% 15.1% 15.2% Mogilev region 14.5% 14.5% 14.5% Total 100.0% 100.0% 100.0%

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Gender of respondent Male Female Total General basic (9 (8) classes) 16.9% 20.2% 18.7% General secondary (11 (10) classes) 26.6% 19.5% 22.8% Primary vocational (PTU) 11.9% 9.0% 10.4% Secondary vocational (technical colleges( 31.1% 34.5% 32.9% Higher, incomplete higher, and postgraduate education 13.40% 16.70% 15.30% Total 100.0% 100.0% 100.0%

The polling circuit employees were checked for their performance quality in some stages: 1) visual control of tool completion at the stage of coding and input; 2) phone control of routing cards to verify whether people really participated in the survey, define conformity between socio-demographic characteristics of respondents and their real socio-demographic characteristics. verify compliance of interviewers with the methodology of the survey (phone monitoring covered 30-50% phone numbers presented by each interviewer); 3) computer-based check of the survey database aimed at identification of similarly completed or identical questionnaires (85%-95% coincident answers) followed with visual comparison and additional phone control of questionnaires revealed.

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3 CASH PROCESSING SERVICES

3.1 Use of a bank account As follows from the survey, ¾ of the Belarusians have accounts with banks (Figure 1). From the comparison of the current survey results and the results of survey in 20121 is evident that in the past 4 years the Belarusians became more active in using bank accounts. In 2016, about 75% of the population has bank accounts as opposed to 69% in 2012. (Figure 1).

Figure 1. Use of bank accounts in 2012 and 2016 Have you got a bank account (currently or in the past 12 months)? (% of the total number of respondents)

Depending on socio-demographic characteristics of respondents The share of respondents having bank accounts is higher among respondents aged 25-59 and amounts to 90% (Table 4.1 Annex 4). Respondents aged 16-24 and 60 and older more often have no personal bank account, and the share of bank account holders among young people amounts to about 60% and slightly above 45% among elder people. There is a certain link between this indicator and the respondent’s level of education. This lies in the fact that an increase in the level of education increases the number of respondents having bank accounts. Thus among respondents with primary, basic, and general secondary education there are about 57% respondents having bank accounts. Among respondents with primary vocational and vocational secondary education they amount to about 85% and among respondents with incomplete higher, higher and postgraduate education about 94% of respondents used bank accounts (Table 5.1 Annex 5). From the analysis of data in terms of the place of residence is evident that the share of respondents with a bank account is noticeably lower among rural people than among the inhabitants of towns and urban-type localities (Table 7.1 Annex 7).

Depending on region According to information received, there is no difference of any significance between regions with regard to having a personal bank account, i.e. the share of people having bank accounts is much the same across all regions of the Republic (Figure 2). This indicator reaches its maximum in the Minsk region, where its value is somewhat higher than over that entire sample – 77.3% against 74.5%. Its minimum value is recorded in the Grodno region where the share of respondents having a bank account is about 3% lower than over the entire sample.

1 We used for comparison data from a survey of the population of Belarus on the topic: "Implementation of national public poll on financial inclusion", held in July and August 2012. For studies conducted in 2012 and 2016, we used the toolbox containing a set of repeating questions, as well as a similar technique of sampling and survey method. It is possible to obtain comparable indicators for a number of data sets that can be used to compare the situation in the use of financial services by the population of the country and to analyze its trends.

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Figure 2. Use of bank accounts in regions of Belarus Have you got any bank account (currently or in the past 12 months)2? (% of the total number of respondents in each region)

By districts The majority of survey points (districts and cities of regional subordination), the share of respondents who have a bank account ranges from 60 to 100%. Chausy, Bragin and Korelichi districts in which this indicator is much lower than in most areas of the country stand out in the general background (Figure 3. for more detail refer to Table. 8.1 - 8.6 Annex 8).

2 Here and hereinafter: it is possible to identify the shares of respondents in the Minsk region that correspond to different values of the measured variables in the figures and tables of Annex 6. This is due to the fact that figures were based on the data from the regions of Belarus, while the values of all indicators in Annex 6 for the city of Minsk and the Minsk region were calculated separately (i.e. the respondents from the city of Minsk were not accounted in calculations for the Minsk region).

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Figure 3. Use of bank accounts in districts of Belarus Have you got a bank account (now or in the past 12 months)? (% of respondents having a bank account of the total number of respondents in each region)

Reasons for using a bank account Among the reasons for using a bank account is receiving wages, allowances, grants and pensions: a little more than 90% of respondents holding a personal bank account use it for the said purposes (Figure 4). Other reasons popular among the Belarusians include the use of accounts for paying bills as well as for keeping money safe and ease of handling cash.

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,Figure 4. Reasons and objectives for using bank accounts in 2016 Why do you need a bank account? (% of respondents having a bank account)

For receiving wages. pension. grants and financial help 90,4

For paying bills

For keeping the money safe

For convenience of cash handling

Compliance with employer requirements/legislation

For accessing other financial services

For saving money for emergency needs (a “rainy” day)

For receiving money

For gaining access to lending facility

For other reasons

As evident from the analysis of survey results with those of 2012 survey, the reasons for using financial instruments by the populations have not changed over time. Thus as follows from both surveys bank accounts are mostly used by Belarusians for receiving wages3 and payment of bills In addition, the bank account holders are attracted by the possibility of keeping the funds safe on in the bank account and convenience of cash handling (Figure 5). However with the general pattern of reasons being the same there is a noticeable shift in their mutual relations. Thus the share of respondents using a bank account for payment of bills increased three times while respondents using their bank account for keeping money safe turned to use them half as rarely. This situation is indirect evidence that the Belarusians more actively use their bank accounts by using new products available for users of these financial services.

3 When preparing for the survey of 2016, we have revised the list of possible answers to question: “What for do you need a bank account?” with account of the experience gained from survey 2012. The main point of changes was that in the framework of 2016 Survey interviewers were instructed to clarify what reason for using a bank account the interviewer had in mind when choosing the option "for other reasons" in question 3 of Interviewer’s Questionnaire (see Annex 1). This has made it possible to receive not only the information on the number of respondents who use a bank account for receiving wages, but identify the share of respondents who need it for receiving pensions, grants, and financial help (which was impossible with the tools of 2012). As the accounts for receiving wages, pensions and other kinds of social payments are essentially different types of regular payments for which having an account is obligatory, investigators considered it reasonable to integrate the shares of respondents using their bank accounts for receiving wages, pensions, grants, and financial help into a single group when analyzing the data. It is precisely in that form data is presented in Figure 4. When performing comparative analysis on the reasons for using bank accounts in 2016 and 2012, it was impossible to use grouped data as the tools of 2012 failed to identify the share of persons using their bank accounts for receiving pensions, grants, and financial help. Therefore, when building Figure 5 that reflects the variation of this indicator in the past 4 years, we used the original set of possible answers proposed to respondents at the time of survey 2012. The said tools made it possible to define the share of persons who use their accounts for receiving wages (but not pensions or other social payments).

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Figure 5. Reasons and objectives for using bank accounts in 2012 and 2016 Why you need a bank account? (% of respondents having a bank account)

Depending on socio-demographic characteristics of respondents The popularity of using a bank account for paying bills increases with the educational level of respondents: approximately every fourth respondent with primary, basic, general secondary education, slightly more than a third of respondents with basic vocational, secondary special education and about 44% of the respondents with incomplete higher, higher, postgraduate education use their own account for this purpose (Table 5.3 Annex 5). Respondents of all age groups report receiving wages, grants, pensions and financial help as the key reason for having a bank account, and the possibility of paying bills ranks second in popularity virtually in all groups (other than the group of respondents aged 60+) (Table 4.3 Annex 4). As to other significant reasons, respondents aged 16-34 cited convenience of cash handling, keeping money safe, and gaining access to other financial services available to bank account holders more frequently than respondents from other age groups. Respondents aged 60 and older, in turn, more often than younger respondents are motivated to use bank accounts because having a bank account ensures safety of their money and savings for a “rainy” day. It should be noted that in the period 2012-2016, the share of respondents who use their bank accounts for paying bills significantly increased among vulnerable social groups (pensioners. respondents with a low level of education and respondents living in rural areas). Thus the share of those who are using a bank account for paying bills increased from 5.4% in 2012 to 20.7% in 2016 among respondents aged 60 and older; among respondents with primary, basic and general secondary education - from 9.9% to 27.1%; among those living in rural areas - from 9.9% to 29.4%.

Reasons for not having a bank account Respondents without a bank account were asked about their reasons of not using this financial service. The most common reason for not having a bank account stated by respondents is lack of enough money: this reason is identified by every third of respondents having no bank account (Figure 6). Every fourth of them prefers to keep cash at home and about 20% of those not having bank account either see no advantages of having one or have an access to a bank account of a family member. Slightly more than 11 % refused to use an account because of lack of trust in banks.

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Figure 6. Reasons for refusal to use a bank account in 2012 and 2016 Why have you decided not to use a bank account? (% of respondents having no bank account)

Depending on socio-demographic characteristics of respondents The majority of young people not having a bank account aged 16-24 said that the main reason for not having one is that someone in the family already has an account (46.6%) (Table 4.2 Annex 4). Another significant barrier to opening a bank account is lack of enough money about 40% of young people cite it as the only reason for not having a bank account. The third significant reason for not having a bank account by respondents aged 16-24 is non-compliance with the requirements of the bank. The main barriers to opening a bank account for respondents aged 60 and older are lack of enough money (28.8%) preference to keeping money at home (28.5%) and lack of advantages (24.5%). As compared with 2012 there is a certain shift in the pattern of reasons for not having a bank account by the population of the country. It is reflected in a marked decline in the share of respondents that do not have an account due to lack of money (from 52.4% in 2012 to 33.4% in 2016) and an increase in the share of respondents who do not use the accounts because someone in the family already has an account (respectively. from 7.2% to 18.3%).

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3.2 Conducting bank account transactions Depositing funds into an account The majority of respondents never replenish their accounts. In the total number of bank account holders among respondents they make up almost 82% (Figure 7). Slightly more than 7% deposit money into their bank accounts several times a year.

Figure 7. Frequency of depositing funds into a personal bank account in 2016 How often do you deposit money into your bank account? (% of respondents with a bank account who deposit money into the account)

■ Several times a month ■ Once a month ■ Several times a year ■ Once a year ■ Less than once a year ■ Never ■ I don’t know, cannot say

Depending on socio-demographic characteristics of respondents Respondents aged 60 and older are most active in depositing money into their accounts. Thus, for example, about 27% of respondents in this age group replenish their bank accounts at different times (Table 4.4 Annex 4). The share of those who deposit money into their accounts among other age groups is approximately the same and amounts to13-17%. This is explained by the specific objectives defined by representatives in different age groups in connection with the use of the account. Thus, the working population often uses account for receiving wages/salaries while the use of account for accumulation and saving of the funds is widespread among older people. Respondents with incomplete higher, higher and postgraduate education are the most active in replenishment of their accounts: about every fourth of the respondents in this educational group replenishes his/her account irregularly (Table 5.4 Annex 5). Among respondents with primary, basic and secondary education every fifth of respondents replenishes his/her bank account among respondents with primary vocational, vocational secondary education about every sixth of the respondents do this.

By regions As for the frequency of depositing money into an account, the population of our country as noted above rarely performs the operation: about 82% of respondents with a bank account never deposit money into the account. 7.1% of respondents deposit money into the account several times a year. The most intensive in this regard is the population of the Minsk and Brest regions: about one fourth of account holders in these regions deposit money into their accounts at least from time to time (Figure 8). The lowest activity with respect to this indicator is observed among the residents of the Grodno region, where the proportion of respondents who pay funds to an account at least occasionally, amounted to only 8.4% of the total number of bank account holders across the region.

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Figure 8. Frequency of depositing funds into a personal bank account in regions of Belarus How many times do you deposit money into your bank account? (% of respondents with a bank account who deposit money into the account in each region)______

Methods of account replenishment Respondents most commonly replenish their accounts in a bank branch - this way prefer more than 70% of Belarusians, who have taken part in the survey and deposit money into their accounts at least from time to time (Figure 9). Every sixth of them deposit money into their accounts at an ATM. while 7.5% do it through a post office.

Figure 9. Methods of depositing funds into a personal bank account in 2016 How you make depositing funds into your account? (% of respondents depositing money into their personal bank accounts)

Depending on socio-demographic characteristics of respondents The majority of respondents in each age group prefer to deposit money into their accounts in a bank branch (Table 4.5 Annex 4). Respondents aged 16-44 most commonly use an ATM for depositing money into their personal accounts. The share of respondents using this method of depositing money into their accounts in these groups ranges from 21% to 28%. With age increasing, the share of those who use an ATM for depositing money into their

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accounts reduces (from 27.5% in age group 16-34 to 0.9% in age group 60+). Representatives of higher age groups most commonly prefer to deposit money into their accounts personally in a bank branch or at a post office (74.9% and17.3% . respectively).

By regions The most popular way of replenishment of a bank account across the regions of the country is personal payment of money in a bank branch: more than 70% of the population of the Republic of Belarus who replenish their bank accounts from time to time conduct the transaction personally in a bank branch (Figure 10). This way of account replenishment is most often used by the population of the Brest and Vitebsk regions: in these regions more than 3/4 of the total number of respondents replenishes his/her personal account at least from time to time. The least share of respondents who deposits money into an account was reported in the Mogilev region. It amounts to slightly more than 50%, which is about 20% lower than the average national indicator. Another widely used way of account replenishment is through an ATM: in all regions other than the Grodno region it is second in demand among the population and ranges from 30.0% in the Mogilev region to 13.4% in the Brest region with the national indicator value being 16.7%. The third place occupies personal payment of money at a post office; every sixth of respondents in the Grodno region uses this method for replenishment of his/her personal account; in the remaining regions the value of this indicator has not exceeded 8%.

Figure 10. Methods of depositing funds into a personal bank account in the regions of Belarus How do you usually deposit money into your account? (% of respondents depositing money into a personal bank account in each region) ______

Withdrawal of money from a bank account More than 2/3 of respondents reported that as to the frequency of money withdrawal from their bank accounts they do this once a month (Figure 11). The share of respondents performing withdrawals of money from an account less than once a month is insignificant and amounts to about 5%. Distribution of data by this indicator is quite predictable because the majority of respondents use their accounts primarily for receiving wages, pensions and other social payments which are generally calculated 1 or 2 times a month.

Depending on socio-demographic characteristics of respondents

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Most of the respondents (41.9%) aged 60 and older prefer to withdraw money from their personal accounts once a month (Table 4.6 Annex 4). Respondents aged 16-59 do this more often: from 69.2% of respondents in the group of respondents aged 45-59 to 78.1% in the group of respondents aged 35-44 withdraw money from their bank accounts several times a month. The share of respondents who withdraw money from their bank accounts several times a month prevail among the respondents in all educational groups (Table 5.6 Annex 5). About ¾ of the total number of bank account holders belong to the groups with primary vocational and vocational secondary education as well as among those with incomplete higher, higher and postgraduate education. This indicator is about 60% among the respondents with primary, basic and secondary education. In all educational groups, the second place occupy respondents who withdraw money from their bank accounts every month: 30.4%, 20.9% and 19.0% respectively, for the groups of respondents with primary, basic and general secondary education, primary vocational and vocational secondary education and with incomplete higher, higher and postgraduate education.

Figure11. Frequency of withdrawals from a personal bank account in 2016 How many times do you withdraw money from your bank account? (% of respondents with a bank account) ______

■ Several times a month ■ Once a month ■ Several times a year ■ Once a year ■ Less than once a year ■ Never ■ I don’t know, cannot say

By regions The population of the Brest region use their accounts most often for withdrawal of money: about 3/4 of the total number of respondents with a personal bank account in this region handle this operation several times a month and about 17% once a month, i.e. the ratio of respondents who withdraw money from their accounts several times a month to those who do this once a month is 1:4 for the Brest region (Figure 12). The least active in this regard are the inhabitants of the Vitebsk and Mogilev regions, for which the ratio is approximately 1:2. In other regions the indicator is practically the same as the national average, and the ratio of respondents who makes several withdrawals a month to those performing the operation each month is about 1:3. The share of respondents using their bank accounts for withdrawal of money several times a year and less is insignificant and does not exceed 10% for all regions.

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Figure 12. Frequency of withdrawals from a personal bank account in the regions of Belarus

How many times do you withdraw money from your bank account? (% of respondents having a bank account in each region)

Transfer of money from account About 4/5 of respondents with a bank account never used it for transfer of money (Figure 13). About 7% transfer money from their personal account several times a year. The share of respondents who performed the operation one or several times a month amounted to 6.8%.

Figure 13. Frequency of transfers from a personal bank account in 2016 How many times do you transfer money from your bank account? (% of respondents having a bank account)

3,2 2,1 1,0 3,6 3,2

6,8

80,2

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Depending on socio-demographic characteristics of respondents Respondents aged 60 years and older most rarely use their accounts to transfer funds. Less than 10% of respondents in this age group carry out this operation at least occasionally (Table 4.7 Annex 4.). Among the respondents of other age groups, transfer of funds from bank accounts was carried out by approximately every fifth respondent. Most commonly the funds from personal accounts are transferred by respondents with incomplete higher, higher and postgraduate education: about one fourth of respondents performed the operation from time to time (Table 5.7 Annex 5). Among respondents with primary vocational and vocational secondary education every fifth of respondents remits the funds from a bank account, and every seventh among respondents with primary, basic and secondary education does so. By regions For this indicator, the least intensity of use is associated with the Minsk. Grodno and Gomel regions: the share of respondents who never use the account for remittance of money amounted to 84.7%, 82.8% and 81.8%, respectively, in these regions (Figure 14). The highest intensity rates are recorded among the population of the Mogilev and Brest regions: about every fifth respondent in each of these regions reported about at least one operation performed from time to time.

Figure 14. Frequency of transfers from a personal bank account in the regions of Belarus How many times you remit the funds from your bank account? (% of respondents who have a bank account in each region)

The reason that respondents often use their bank accounts for withdrawal of money and rarely replenish and use them for remittance may be most commonly explained by the fact that the most popular bank account among the population of the country is the current account to receive wages, pensions, allowances, grants, etc. which is used first of all for its direct purpose (for wages and social payments), and in some cases for paying bills. As the salary cards (namely, employees own the majority of cards tied to the current bank accounts) are issued on employer’s initiative. The range of services provided to an account holder depends on which services (transactions on accounts) will be entered by the employer in the available list. Most commonly, employers never enter into the said list, for example, online payment services and conversion of local currency into any foreign currency, which, in turn, automatically narrows the range of operations that may be performed on the

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account. For example, this excludes the possibility of payment for online purchases and purchases in foreign currency, etc. Considering the fact that an account is most often replenished for online payment for an expensive purchase though the Internet (when you cannot go to the shop and buy a necessary product there) or for travelling abroad (for payment in the shop, etc.). There is no need of account replenishment for people who cannot use the card for online or currency payment for a purchase (they can only withdraw cash, convert it into foreign currency and pay for a purchase).

3.3 Use of a debit and credit card, Internet Banking, Mobile Banking, and overdraft services, a credit card Within the framework of survey respondents were asked questions on the use of cash segment of the financial market, including a debit card, mobile banking, Internet banking, overdraft services, and a credit card.

Use of a debit card According to information received, the share of respondents using a debit card amounted to 90% of the total number of bank account holders and increased by 3.6 percent points as compared to 2012 (Figure 15).

Figure15. Use of a debit card in 2012 and 2016 Have you used a debit card in the past 12 months? (% of respondents with a bank account)

______Depending on socio-demographic characteristics of respondents Most of respondents aged 16-59 with a bank account make use of a debit card: the value of this indicator among respondents falling within the said age range exceeds 93% (Table 4.8 Annex 4). Among respondents aged 60 and older this indicator is noticeably lower and amounts to 62%.

By regions As to the use of debit cards across regions of the country, this financial instrument is much the same in demand among the population of all regions of Belarus. This indicator varies insignificantly from a national value and cannot be interpreted in a reasonable way.

By districts Distribution of the shares of debit card holding respondents by region is fairly dense and uniform. Shares of respondents using the said banking product do not vary by more than 20% in each point of survey as compared with other points and national average. However, there are some regions for which the variation is significant. Among them are the Stolbtsy, Cherven, Klichev and Mogilev regions (Figure 16, for more detail refer to Table 8.1 - 8.6 Annex 8).

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Figure 16 Use of a debit card in regions of Belarus (% of respondents using a debit card of the total number of bank account holders in each region)

Use of Internet Banking By the time of survey in 2016, Internet Banking was used by almost 37% of respondents, which is about 3.5 times as higher as in 2012 (Figure 17). According to information received, the number of Internet Banking users increased mainly owing to higher-educated urban people aged 25-44 (by 32.7%).

Figure 17. Use of Internet Banking in 2012 and 2016 Have you used Internet Banking in the past 12 months? (% of respondents with a bank account)

Depending on socio-demographic characteristics of respondents Internet Banking is most intensively used by respondents aged 16-34. This financial service covers slightly more than a half of the total number of respondents in this group (Table 4.9 Annex 4). With an increase in the age of respondents, the share of Internet Banking users decreases. Thus in the age group 45-59 years Internet Banking is used by every fourth respondent and in the age group of 60 and older – every tenth respondent.

As follows from the analysis of survey findings in the context of educational groups, respondents with higher level of education use the said service more intensively. Thus about every second respondent with incomplete higher, higher and postgraduate education and about every third with primary vocational and vocational secondary education makes use of Internet Banking. About one fourth among the respondents with primary, basic and general secondary education makes use of the service (Table 5.9 Annex 5).

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The share of respondents covered with Internet Banking service is lower among rural people as compared to those of other type localities. Therefore, it is in demand among slightly more than 30% of rural respondents, while in towns and urban-type localities slightly more than 42% and 37% of respondents, respectively, make use of Internet Banking (Table 7.9 Annex 7).

By districts As for the use of Internet Banking, data for this indicator strongly differ in the points of survey. The maximum share of online service users is living in the Rossony (83.3%) and Polotsk (nearly75%) districts while the minimum of them is living in the Krupki (5.0%) and Chashniki (6.1%) districts (Figure 18, for more detail refer to Table 8.1 - 8.6 Annex 8).

Figure 18. Use of Internet Banking in the regions of Belarus (% of Internet Banking users of the total number of bank account holders in each region)

Frequency of making online payments More than 70% of the total number of respondents never makes online payments (Figure 19). Slightly more than 21% make online payments for goods and services one or several times a month. Slightly more than 5% use the service several times a year or more rarely. It is particularly remarkable that in the recent 4 years the number of respondents who never use online payments markedly decreased: in 2012 the share of those who never make online payments was about 90%. Optimistically, we can state that in the said period the payment behavior of people changed not only quantitatively but qualitatively as well, which is reflected by this indicator. This can be seen from the growth in the number of people who use the service intensively and on a regular basis.

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Figure 19 Frequency of online payments in 2012 and 2016

How often do you make online payments (payments for goods and services through the Internet Banking system or payment systems such as PayPal. Yandex Money. KIWI. Skrill, etc.)? (% of the total number of respondents)

Depending on socio-demographic characteristics of respondents The share of respondents who most often make online payments is higher among the respondents aged 25-34 and amounts to 50% (Table 4.14 Annex 4). Respondents aged 60 and older (about 5%) use the service least often. The share of respondents who intensively use the Internet for making payments is significantly higher among the respondents with incomplete higher, higher and postgraduate education. Slightly more than 39% of respondents in this group make Internet payments one or several times a month while the share of those making online payments among respondents with primary vocational and vocational secondary education amounted to 24.2%, and among respondents with primary, basic and secondary education - only 12% (Table 5.14 Annex 5).

The share of Internet Banking users is higher among those living in cities, towns, and urban-type localities than among rural people. Thus 26.9% of urban respondents and 24% respondents living in urban-type localities use Internet Banking for making payments for goods and services several times a month or monthly, while the share of such respondents amounts to 15.8% among rural people (Table 7.14 Annex 7). Use of Mobile Banking The share of Mobile Banking users amounted to about 23% of respondents having a private bank account (Figure 20). There is also an increase in this index, which was 9.4 percentage points as compared with 2012.

Figure 20. Use of Mobile Banking in 2012 and 2016 Have you used Mobile Banking in the past 12 months? (% of respondents with a bank account)

Depending on socio-demographic characteristics of respondents The share of respondents using the Mobile Banking service is higher among young people than among those of older age groups; in the group of respondents aged 16-34 it amounted to about 40% (Table 4.10 Annex 4). With increase in the age of respondent, the number of service users tends to decrease. Thus mobile banking is used by about every fifth respondent in the group of respondents aged 35-44, every seventh among those aged 45-59, and only every twentieth among respondents aged 60 and older.

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Respondents with incomplete higher, higher and postgraduate education use the Mobile Banking service more intensively that the respondents with lower educational level: in this group the share of mobile banking users amounted to about one third of the total number of respondents (Table 5.10 Annex 5). Among respondents with primary vocational and vocational secondary education the service is used by about 23% while among respondents with primary, basic and general secondary education - just more than 17%. The share of respondents using the Mobile Banking service is higher among those living in cities, towns and urban-type localities than among those from rural localities (Table 7.10 Annex 7). By regions As to using services such as Internet Banking and Mobile Banking there is a certain difference between separate regions. Thus both services are most intensively used by the population of the Vitebsk region: 43% and 27.7%, respectively, among respondents in this area with a personal bank account make use of the said financial instruments (Figure 21). The services are least in demand among the population of the Grodno region where Internet Banking and Mobile Banking were used by 30.2% and 15.6% of respondents, respectively. In the remaining regions of the country, the incidence of the said services is approximately at the average national level, which is 36.6% for Internet Banking and 27.7% for mobile banking.

Figure 21. Use of Internet Banking in regions of Belarus Have you used Internet Banking in the past 12 months? (% of respondents with a bank account in each region) Have you used Mobile Banking in the past 12 months? (% of respondents with a bank account in each region)

By districts The pattern of using mobile banking by respondents from different regions of the country is irregular to a great extent: the share of service users ranges from 0% in the Krupki and Chashniki regions to 60-70% in the Polotsk. Krasnopolje and Rossony regions (Figure 22. for more detail refer to Table 8.1-8.6 Annex 8).

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Figure 22. Use of Mobile Banking in regions of Belarus

(% of respondents using mobile banking of the total number of bank account holders in each region)

______

Frequency of payments through a mobile phone Payments though a mobile phone are effected by about 18% of respondents (of which 2/3 use the service actively and regularly), while 81.1% of respondents never use this financial instrument (Figure 23). As compared to 2012, the value of this indicator has not changed significantly.

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Figure 23. Frequency of payments through a mobile phone in 2012 and 2016 How many times you paid or received money through a mobile phone (payment for goods and services through a mobile account or Mobile Banking system)? (% of the total number of respondents) ______

■ One/several times a month ■ Several times a year. Once a year or less ■ Never I don’t know. cannot say

Depending on socio-demographic characteristics of respondents It is common for respondents aged 16-34 to pay for goods and services through a mobile phone account or Mobile Banking system: about 30% of respondents aged 16-24 and about 35 % of respondents aged 25-34 make use of this financial instrument from time to time (Table 4.15 Annex 4). Mobile phone is less often used for payment for goods and services by respondents aged 60 years and over: this service is used by only 3.3% in this age group The share of respondents intensively using a mobile phone for payments is higher among the respondents with incomplete higher, higher and postgraduate education. Thus, for example, about each fifth in this group of respondents exercises this kind of payment one or several times a month, whereas the value of this indicator among the respondents with primary vocational and vocational secondary education amounted to 15%. and among the respondents with the primary, basic and general education - only 7.6% (Table 5.15 Annex 5). Respondents living in cities, towns and urban-type localities are more active in payment through a mobile phone than respondents living in rural areas (Table 7.15 Annex 7).

Use of overdraft services Slightly more than 7% of respondents having a bank account reported on the use of overdraft services (Figure 24). In our view, it is worthy to note that overdraft is the only service in the cash management segment, which declined in demand in the past 4 years.

Figure 24. Use of overdraft in 2012 and 2016 Have you used an overdraft in the past 12 months? (% of respondents holding a bank account)

Yes No I don’t know, cannot say

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By regions As for the use of overdraft services, the Vitebsk region stands out of other regions in the country (Figure 25). They are used by 14.3% of the polled bank account holders which is approximately twice the national average or nearly three times as much as the number of users of the said facility in the Brest and Gomel regions.

Figure 25. Use of overdraft in regions of Belarus Have you used an overdraft in the past 12 months? (% of respondents holding a bank account in each region)

By districts As for the share of respondents who use the overdraft services, most of the survey point fell into the range from 0 to 20%. Against the general background, Polotsk, Gorodok, Rossony, Stolin, Klimovichi, Miory and Ushachi districts stand out for higher value of this indicator than in the majority of other districts of the country (Figure 26, for more detail refer to Table 8.1 - 8.6 Annex 8).

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Figure 26. Use of overdraft services in districts of Belarus

Have you used an overdraft in the past 12 months? (% of respondents using an overdraft among the total numbers of respondents holding a bank account in each region)

About 30% of overdraft users make use of it several times a year, a little bit over one fourth - each month, every fifth - several times a month, and every fourth - once a year of less (Figure 27).

Figure 27. Frequency of using an overdraft in 2016 How often do you use an overdraft? (% of respondents using an overdraft) ■ Several times a month ■ Once a month ■ Several times a year ■ Once a year ■ Less than once a year

Use of credit cards The share of credit card holders among respondents is less than 10% of the total number of respondents (Figure 28). About 2/3 of credit card holders answered affirmatively to a question whether they have any funds available on their personal card.

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Depending on socio-demographic characteristics of respondents The share of card holders among the respondents of age 25-59 is several times higher than in the age groups 16-24 and 60+ (Table 4.27 Annex 4). According to information received, the probability of using a credit card increases with the level of education. Thus 15.5% of respondents with incomplete higher, higher and postgraduate education hold a credit card. Among respondents with primary vocational and vocational secondary education the value of this indicator is 9%, and for those with primary, basic and secondary education - 5.7% (Table 5.27 Annex 5). A similar pattern may be observed as to the availability of funds on the card: among respondents with incomplete higher, higher and postgraduate education about 70% of respondents have funds available on a personal credit card; slightly more than 58% of respondents with primary, basic, and general secondary education have funds available on a personal credit card (Table 5.28 Annex 5).

Figure 28. Use of a credit card in 2016 Have you got a credit card (currently or in the past 12 months)? (% of the total number of respondents)

Have you got any funds available on your credit card? (%of the total number of respondents holding a credit card) ______

Methods of getting cash During the survey respondents were also asked in what way they commonly get cash in case of need. According to information received. 63.1% of respondents use ATMs for the purpose, approximately each fifth of them gets it at a post office, and 8.4% get it most often over the counter in a bank branch (Figure 29). As compared with 2012, the share of ATM users among respondents increased by about 9%, on the contrary, the number of those getting cash in bank branches declined by almost 7%. As follows from the data analysis, the number of ATM users increased in the period of 2012-2016 among respondents of older age groups with primary vocational and vocational secondary education as well as among respondents living in rural areas.

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Figure 29. Methods of getting cash in 2012 and 2016 How do you usually get cash when you need it? (% of the total number of respondents)

Withdraw money at an ATM Get it personally in a bank branch

Get it personally in a post office I do not need to get cash

I don’t know. cannot say Other

Depending on socio-demographic characteristics of respondents According to information received, the share of those who withdraws money at an ATM when any need arises is higher among respondents aged 25-59 and is more than ¾ of the respondents group (Table 4.13 Annex 4). For the lower age group (16-24 years), this indicator is about 58%. Respondents aged 60 and over (23.1%) use an ATM for withdrawing cash least often; the major part of respondents in this group prefers to get cash over the counter at a post office (57.2%) or a bank branch (15.1%). The share of respondents withdrawing cash from ATMs in the group of respondents with incomplete higher, higher and postgraduate education is approximately two times higher than among respondents with primary, basic and general secondary education: 84% and 44% respectively (Table 5.13 Annex 5). For the group of respondents with basic vocational and secondary special education, the value of this indicator was 74%. Approximately one third of respondents with primary, basic and secondary education get cash over the counter at a post office. Among other educational groups this method of getting cash is less popular: about every ninth with primary vocational and vocational secondary education and each twentieth with incomplete higher, higher, and postgraduate education gets cash at a post office. As the analysis of data shows, there are some differences on this basis, depending on the place of residence. Among the respondents living in rural areas slightly more than half of respondents (53.4%) use an ATM for withdrawing cash, while in towns and cities the share of such respondents is higher - 66.8% and 72.8%, respectively (Table 7.13 Annex 7). Almost 28% of rural respondents get cash in a post office while post offices are less popular among the inhabitants of other types of settlements: approximately every tenth citizen and every seventh inhabitant of an urban settlement refer to the post office for cash withdrawal.

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4 LOANS AND BORROWINGS During the survey the respondents were also asked about the loan type they prefer and whether the respondents use borrowings. 4.1 Use of loans As may be seen from the obtained data, loans are used by about 24% of respondents (there is no noticeable change in the number of loan users as compared with 2012). One respondent accounts for about 1.26 loans, i.e. about each fourth of respondents who used loans in the past 12 months use more than one loan at a time.

Depending on socio-demographic characteristics of respondents Respondents aged 25-59 (Table 4.16 - 4.24 Annex 4) are more active than other respondents in using loans. The use of lending service is least often among respondents in the younger (16-24) and older (60+) age groups. This is quite natural given the fact that members of these groups frequently have a low income or no income at all (pupils, students who do not receive a scholarship) and for this reason and also because of their age they often are not allowed to obtain loan (officially as in the case of the minors or retired people). By regions Loans are most intensively used by the population of the Vitebsk region: each third of respondents in the said region had loan liabilities (Figure 30). The population of the Grodno region uses loans least often as the share of granted loans is less than 10%. In other regions of the country the share of loan users among the population is about 22% and practically does not deviate from the average national value.

Figure 30. Share of respondents using lending services in the regions of Belarus

(% of the total number of respondents in each region)

Belarus Vitebsk region Brest region Minsk region Gomel region Mogilev region Grodno region

Share of respondents having loans Share of respondents not having loans

By districts The pattern of loan use differs across the districts: from 0% in Ivje district to 60-70% in the town of Zhodino. The Senno and Polotsk districts (Figure 31, for more details refer to Table 8.1 - 8.6 Annex 8).

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Figure 31. Share of respondents using lending services in regions of Belarus (% of the total number of respondents in each region)

Types of loans Consumer loans and loans for purchase by installments are the most common among the population (Figure 32). In 2016 these types of loan accounted for 31.6% and 45.4%, respectively, of the lending services in the country, while in 2012 for 51.3% and 25.2%, respectively. Loans for residential construction/purchase rank third in demand among the population. As follows from both surveys, they were used by nearly 11% of respondents. It may be noted that with no significant change in the number of respondents who use loans, there has been a significant redistribution of the market share by loan type over the past 4 years. This results from reduction in demand for consumer loans and a growing popularity of the purchase of goods with payment by installments among the Belarusians.

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Figure 32. Market shares covered with each loan type in the common segment of lending services in 2012 and 2016. (% of the total number of loans used by respondents at the time of survey)

By regions Among loans available in the financial market of the country, loan for purchase goods by installments occupies a leading position: it accounts for a greater market share in the loan segment across all regions in Belarus (Figure 33). This loan type is mostly demanded in the Grodno region where it accounts for nearly half of the market segment, while the demand for it is the lowest in the Brest region with only 38%. Personal loan (customer’s loan) ranks second by popularity among the population. Market share covered by this loan type is nearly the same across all regions in the country and ranges from 30.4% in the Minsk region to 33.2% in the Mogilev region. Construction loan is most popular among the population of the Gomel region (market share slightly exceeds 13%), and the least popular in the Grodno region (a little bit over 5%). Market shares for home repair loans and personal loans for vehicles, respectively, about 6% and 3% of the total number of loans used by the surveyed Belarusians. The regional values of these indicators deviate insignificantly from the national values.

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Figure 33. Market shares covered by each loan type in the common segment of lending services in regions of Belarus

(% of the total number of loans used by respondents at the time of survey in each region)

Belarus

Brest region

Vitebsk region

Gomel region

Grodno region

Minsk region

Mogilev region

Personal loan. customer’s loan

Loan for purchase by installment

Construction loan

Home repair loan

Auto loan

Other types of loans

Reasons for not using lending services Among the reasons for not using lending services, respondents commonly reported too high interest rate on loans (45.7%), unwillingness to owe to anyone (36.8%), and lack of money for repayment of loans (28.0%) (Figure 34). It is worthy to note that the share of respondents who reported the first two of reasons greatly increased as compared with 2012. Thus the share of respondents who refused to use loans due to too high interest rates on loans increased by nearly 20% in 2016, and the number of respondents for whom unwillingness to owe to anyone is the main reason for not using loans increased by nearly 17%.

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Figure 34. Reasons for refusal to use lending services in 2012 and 2016 Why you don’t use loans? (% of respondents who do not use loans)

45,7 Interest rates are too high

Don’t want to owe to anyone

Do not have enough money to repay

Loan terms are not suitable 2016 Other reasons 2012

I was already refused a loan

The bank is difficult to reachк

I borrow from other sources

Rude and unfriendly personnel of the bank

Depending on socio-demographic characteristics of respondents Respondents aged 25-59 reported high interest rates on loans as a key reason of not using lending services: more than half of respondents in this group report this as a refusal from loan (Table 4.26 Annex 4). Lack of funds for repayments of loan is often a major barrier for getting a loan by respondents from a younger age group (16-24 years): more than 35% of respondents do not use loans just for this reason. Reluctance to be a debtor as a factor preventing from the use of lending services is commonly reported by respondents aged 60 and older; the share of respondents for whom this would be the decisive factor in refusing the use of loans exceeded 43%. in this age group. The analysis of reasons for refusing to use lending services in the educational shows that the common reasons for refusal from the use of loans is roughly the same for respondents with different level of education. However, there are certain differences between the groups of respondents with different level of education as to the extent to which each of the reasons influenced the decision not to use loans. Thus, among respondents with primary, basic and secondary education the share of respondents who commonly report three main reasons is approximately the same - just over 30% of respondents noted their unwillingness owe to anyone. About the same number of respondents does not use loan due too high interest rates on loan, still the same - due to lack of funds for repayment of loans (Table 5.26 Annex 5). Among respondents with primary vocational education and vocational secondary education as well as among respondents with incomplete higher, higher and postgraduate education more than a half of respondents report too high interest rates on loan as a reason for not using lending services. More than one third of respondents in the above mentioned educational groups noted their unwillingness owe to anyone. About each fourth respondent with primary vocational and vocational secondary education and about each fifth among respondents with incomplete higher, higher and postgraduate education explained his/her voluntary exclusion from the lending segment of the financial market by lack of funds for repayment of loans.

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4.2 Use of borrowed funds Figure 35. Use of borrowed funds in 2012 and 2016

According to the received data, about 36% of respondents used borrowed funds either at the year of survey or in the year immediately preceding the year of survey. The major part of respondents - 95% - borrowed from their friends and relatives in case of need (Figure 35).

Have you borrowed funds from the following sources in the past 12 months? (% of total respondents; % of respondents who borrowed funds in the past 12 months)

2,1 2,9

USED borrowed funds; 35,9

DID NOT use borrowed funds; 64 1

95,0

Friends. relatives Private persons. money-lenders Pawnshop

Depending on socio-demographic characteristics of respondents Respondents aged 16-34 borrowed funds most commonly. More than 43% of respondents in this age group borrowed money from their friends and relatives (Table 4.29 Annex 4)

Frequency of requests for borrowings About 30% of respondents using borrowed funds apply for a loan 1-2 times a year. The group of respondents who borrow money 1-2 times a quarter is approximately the same in number (Figure 36). Every fifth in respondents has to borrow money almost each month, and every sixth in them borrows monthly. As follows from the comparison of the received data with those of survey 2012, respondents borrowed money more often over the past few years. This is probably evidence of decline in their material well-being.

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Figure 36 Borrowed funds usage frequency in 2012 and 2016 How often do you borrow funds from these sources? (% of respondents who used borrowed funds)

Each month Almost every month 1-2 times a quarter

1-2 times a year Don’t know, cannot say

Depending on socio-demographic characteristics of respondents

Respondents aged 16-24 are the most common borrowers: almost one third of respondents in this age group makes use of borrowed money every month (Table 4.32 Annex 4).

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5 SAVINGS In the course of survey respondents were also asked questions that made it possible to assess how actively they use financial services and products presented in the savings market segment. 5.1 Keeping savings with financial institutions According to the obtained data, the Belarusians are not active in using saving services: only 11.0% of respondents keep their savings with financial institutions (Figure 37). Moreover, that index reduced as compared with 2012, when its value was 18%. We believe this to be also an indirect confirmation of the above assumption that the people’s well-being declined in recent years.

Figure 37. Keeping savings with financial institutions in 2012 and 2016

Have you got any savings/accumulations held in financial institutions? (% of the total number of respondents) ______

Yes No No answer

Depending on socio-demographic characteristics of respondents Approximately every fifth respondents with incomplete higher, higher and postgraduate education, and about every tenth with primary vocational and vocational secondary education keep their savings with financial institutions (Table 5.33 Annex 5). Less than 9% among respondents with primary, basic and secondary education use accounts to save.

By regions The share of respondents that hold their savings with financial institutions is the highest in the Minsk and Brest regions: around every seventh respondents in these regions has a savings bank account, which is about 3% higher than the average national index (Figure 38). The smallest number of savers is recorded in the Mogilev region: less than 7% of the inhabitants of this region are saving money in financial institutions (Figure 38).

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Figure 38. Keeping savings with financial institutions in regions of Belarus

Have you got any savings/deposits kept in financial institutions? (% of respondents in each region)

Belarus

Brest Region

Minsk Region

Vitebsk Region

Gomel Region

Grodno Region

Mogilev Region

Yes No No answer

By districts Shares of savers in different districts of the country vary significantly. The maximum value of this index is reported in Zhodino (48.3%), the minimum value in the Dribinsk, Kostyukovichi and Chashniki districts (0%) (Figure39, for details refer to Table 8.1 - 8.6 Appendix 8).

Figure 39. Share of respondents keeping savings with financial institutions in regions of Belarus (% of the total respondents in each region)

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Share of savings kept with financial institutions (% of total respondents in each region) About 43.7% of account holders having their savings with financial institutions keep less than one fourth of all their savings on accumulation (savings) accounts (Figure 40). Approximately each fourth respondent reported that savings trusted to a financial institution amounted to 25-50% of the total savings held by him/her. About 8.8% keep 50-75% of their savings in a financial institution and each tenth entrusted more than ¾ of his/her savings to a financial institution. More than 16% of respondents keeping their savings with financial institutions refused to name the share of savings they entrusted to a financial institution for various reasons.

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Figure 40. Share of savings kept with financial institutions in 2012 and 2016

What share of your savings is kept with a financial institution?

(% of respondents who keep their savings with a financial institution)

Don’t know. can’t say

Depending on socio-demographic characteristics of respondents As the analysis of data shows, the number of respondents who use the saving service and keep their savings with financial institutions grow as they are growing older. Thus, if 3% of respondents in the lower-age group (16-24 years) have a savings account, about 10% of respondents aged 25-44 use their accounts to save, and 15.6% of respondents in higher-age group do the same (Table 4.33 Annex 4). 5.2 Use of savings accounts

Types of savings accounts Market shares are classified by type of savings accounts as follows: about 70% - short-term accounts and about 30% of the market - long-term accounts (Figure 41).

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Figure 41. Market shares covered by savings accounts of each type in the common segment of savings accounts in 2012 and 2016 Do you have any of the listed savings accounts (currently or in the past 12 months)? (% of the total number of savings accounts held by respondents at the time of survey)

Short-term savings account Time deposit

Long-term savings account Current demand account

Savings accounts of other types Savings accounts of other types ______

Depending on socio-demographic characteristics of respondents There are differences in the choice of savings account type depending on the age of respondents. Respondents aged 25-59 often keep their savings by using short-term savings accounts (Table. 4.35 Annex 4). Thus, for example, if the share of respondents aged 25-59 who are using short-term account ranges from 28.6% to 35.2%, it will be about 22% in the group of respondents of 60 years and older. Respondents at the age of 60 years and older are more likely to give preference to long-term savings accounts: 76% of respondents in this age group reported that they keep their savings in that way (Table 4.36 Annex 4). By regions The situation in the market of savings accounts by regions is as follows. Long-term accounts occupy much larger market share than other types of accounts in the regions of the Republic of Belarus. For example, in Grodno and Brest regions, long-term accounts occupy 76.3% and 72.5% of the total market of savings accounts, respectively, which is slightly higher than over the whole sample (Figure 42). The least shares of long-term accounts as compared to the total number of accounts are reported in the Gomel region (61.8%) and the Mogilev region (62%). Short-term savings account is the most popular in the Mogilev region: more than one third of accounts held by population in these regions are short-term, which is at least 8% higher than an average national index. It is reported that the market share of short-term savings accounts is at the level of 33.8% in the Gomel region, which is also higher than the national average by about 5%. In the remaining regions the use of the said type of savings accounts is approximately at the level of national average, which is a little less than 29%.

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Figure 42. Market shares covered by savings accounts of each type in the common segment of savings accounts services in the regions of Belarus

(% of total savings accounts held by respondents at the time of survey in each region)

Belarus

Grodno region

Vitebsk region

Gomel region

Mogilev region

Minsk region

Brest region

Long-term savings account Short-term savings account

Other types of savings accounts ______

Reasons for using savings accounts Most often holders of savings accounts treat them as a way of multiplying their funds and as a way of keeping money safe: more than 50% of account holders reported that they opened an account for gaining an interest on deposited money; about 44% of account holders use the account because they are sure of keeping their money safe (Figure 43). Moreover, a wide-spread reason for using a savings account is accumulation of money for emergencies (a “rainy” day): that was the reason reported by almost 27% of respondents. As reported by 22.5% of respondents, they are saving for projected future needs. Each fifth respondent places money on deposit to avoid sheer waste of money. For each sixth respondent the account is an instrument for accumulation of funds for a big-budget purchase.

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Figure 43. Reasons for using savings accounts in 2012 and 2016

Why have you decided to open a savings account (make a contribution. deposit)? (% of respondents keeping savings with a financial institution)

To draw interest/accruals on deposited money For keeping money safe Saving for a “rainy day”

Saving for future needs

To avoid sheer waste of money 2016 To accumulate money for a big-budget purchase 2012 To gain access to other financial services

To prevent from spending by other family members

To have an opportunity to apply for a loan

Depending on socio-demographic characteristics of respondents Respondents aged 16-59 report that the key reason for keeping savings with a financial institution is the possibility to draw interest on savings: the share of respondents who ticked off this answer varies from 46.9% to 58.5% (Table 4.38 Annex 4). Respondents aged 60 and older are more likely to place their funds on savings accounts for their needs in possible emergencies (“for a rainy day”): this is typical for every second respondent from the in the age group under survey. There were revealed some differences in the reasons for using savings accounts by respondents with different educational level. For example, respondents with primary, basic and secondary education reported that the main reasons for opening a savings account was keeping money safe (432%), draw interests on saved money (42.8%) and accumulate money for a “rainy day” (35.8%) (Table 5.38 Annex 5). Respondents with primary professional and vocational education reported that the main reasons for using a savings account was drawing interests on deposited funds (55.1%), and keeping money safe (45.2%). Approximately the same number of respondents in this educational group reported that the main reason was saving money for emergency needs (“rainy” day) (24.4%) and future expenses (23.8%). More than half of respondents (52.3%) with incomplete higher, higher and postgraduate education are saving money for drawing interests. Among other reasons reported by the same group were keeping money safe (43%) and the accumulation of money for future expenses (27.7%). 5.3 Operations on savings account

Frequency of depositing money into a savings account About 40% of respondents holding savings accounts deposit money into their accounts several times a year (Figure 44). 27.3% of account holders replenish personal savings account monthly, 11.3% account holders never deposit money thereto, and practically every sixth account holder deposits money into his/her account once a year or less.

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Figure 44. Frequency of deposits into personal savings account in 2016. How often do you deposit money into your savings account or deposit? (% of respondents holding their savings with a financial institution) ______

1.6 2.4 ■ Several times a month 2 7 ■ Once a month ■ Several times a year ■ Once a year ■ Less than once a year ■ Never ■ I don’t know. cannot say

Frequency of money withdrawals from savings accounts As to the frequency of money withdrawal by respondents from their savings accounts, the situation appears as follow: 37% of savings account holders never withdraw money therefrom, more than half of respondents withdraw money several times a year or less (Figure 45).

Figure 45. Frequency of withdrawals from personal savings account in 2016 How often do you withdraw money from your savings account/ deposit? (% of respondents holding their savings with a financial institution) ______

■ Several times a month ■ Once a month ■ Several times a year ■ Once a year ■ Less than once a year ■ Never ■ I don’t know. cannot say

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6 INSURANCE

Do you use at present or used in the past 12 months any types of the following insurance services

Within the framework of the project, researchers have also set out to explore specific features of using insurance services by citizens of Belarus. Use of insurance services The results of survey showed that insurance services are quite popular among the population of the country: they are used by more than 55% of respondents. Demand for this type of service has not changed in the last few years. According to the survey, one respondent accounts for 1.56 insurance; normally, the Belarusians who resort to insurance services use one or two types of insurance. Depending on socio-demographic characteristics of respondents Respondents aged 25-59 and 60 and over are more active in using insurance services that other respondents (Table 4.41 - 4.48 Annex 4). Respondents aged 16-24 take recourse to the said services least often. By regions Insurance services are in great demand in the Vitebsk, Minsk and Brest regions (about 60% in each of these regions) the least demand is in the Mogilev and Gomel (about 50%) (Figure 46). The level of use of the services of this market segment in the Grodno region is similar to that of the national use (about 55%).

Figure 46. Share of respondents using insurance services in regions of Belarus (% of the total amount respondents in each region)

Belarus Vitebsk Region Minsk Region Brest Region Grodno Region Mogilev Region Gomel Region

USE insurance services DON’T USE insurance services

By districts There is a significant difference in data in the context of the use of insurance services in various districts of the country. The maximum value of this indicator is noted in the Gorodok district (83.6%), the minimum - in the Dobrush (29.5%) and Mogilev (29.5%) districts (Figure 47. for details. see Table 8.1-8.6 Annex 8).

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Figure 47. Share of respondents using insurance services in districts of Belarus (% of total respondents in each region)

Types of insurance services Property insurance and motor car insurance are the most popular types of insurance services among the population: they account for 40.9% and 33.3% of the total insurance market (Figure 48). Voluntary life insurance occupies the third place in prevalence among the population: it accounts for about 12% of this segment of the financial market. Compared with 2012 this indicator has not demonstrated any significant change.

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Figure 48. Market share covered by each insurance type in the common insurance services segment in 2012 and 2016 Do you use at present or used in the past 12 months any types of the following insurance services

(% of total insurance cases used by respondents at the time of survey) ______

Depending on socio-demographic characteristics of respondents As to age-specific use of insurance services, the following can be stated. Among respondents aged 25-59, the preferred insurance services include motor car insurance, property insurance, travel and life insurance (Table 4.41-4.42. Table 4.46-4.47 Annex 4). Respondents aged 60 and over are more likely to use the property and livestock insurance services (Table 4.42-4.43 Annex 4). These differences are largely due to the peculiarities of the respondents’ lifestyle and place of residence. Respondents with incomplete higher, higher and postgraduate education are more likely to use the services of motor car insurance, life insurance and medical insurance (Table 5.41. Table 5.47 -5.48 Annex 5). Among the residents of rural areas the share of those who use the property insurance services is higher (Table 7.42 Annex 7).

By regions In general, distribution of shares of each insurance service type in the common segment of insurance services in the regions of the Republic of Belarus reproduces on the whole the situation over the country; deviation from the value of this indicator does not exceed 5% (Figure 49).

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Figure 49. Market shares covered by each type of insurance services in the common insurance services segment in regions of Belarus

(% of total insurance services used by the respondents at the time of survey in each region)

Belarus

Grodno region

Vitebsk region

Gomel region

Mogilev region

Minsk region

Brest region

Property insurance Motor car insurance Life insurance (private voluntary) Medical insurance (private voluntary) Travel insurance Livestock insurance

Business insurance Crop insurance Reasons for refusal to use insurance services About 2/3 of respondents not using insurance companies’ services indicated the following reason for refusal to use such kind of services due to absence of necessity (Figure 50). Every fifth respondent considers insurance services too expensive, and every seventh refused to use this type of service because of lack of trust in insurance companies.

Figure 50. Reasons for refusal to use insurance services in 2012 and 2016 Why don’t you use insurance services? (% of respondents not using insurance services)

No need

Too expensive

No confidence in insurance companies

Other reasons

Too long period

I was not aware of such services existence in Belarus

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Reasons for using voluntary life insurance and medical insurance Respondents who voluntarily insured their life or health in addition to compulsory national insurance were also asked about the reasons for their choice. According to the obtained results, almost 60% of respondents made their choice of the service because they considered it a guarantee of financial security (for themselves or their relations) if any emergencies arise in their lives (Figure 51). About 20% have applied for each service, following the example of their friends, acquaintances, relatives and by virtue of such compulsory insurance availability (e.g. in cases where it is a condition of employment). About 15% of respondents admitted that they used the service as persuaded by an insurance company’s agent.

Figure 51. Reasons for using voluntary life and medical insurance services in 2012 and 2016 Why do you use voluntary life insurance in addition to national insurance? (% of respondents using voluntary life insurance and medical insurance services)

Need of protection

To be used by other persons in my surroundings

That was a compulsory condition

I was persuaded by an insurance agent

I don’t know. cannot say

Other reasons

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7 BILLS PAYMENT As for bills payment, almost 56% of Belarusians prefer to pay in cash at a post office (Figure 52). For this purpose, every other respondent refers to the bank where also pays for consumed services in cash. About 40% of respondents prefer to pay their bills by transferring funds from bank card. It is worthy to note that in comparison with 2012 the share of people who resort to this method of bills payment increased significantly - by 11.5%. This is caused by two reasons: firstly, the increase in the number of respondents who have bank accounts and secondly, improvement of experience in the field of finance, which allows to use services available at the financial market of the country such as Internet banking. 11.6% of respondents pay their bills in cash at services provider’s point of payment (mobile network operator, internet services provider).

Figure 52. Bills payment methods in 2012 and 2016 (For example, mobile operator, Internet service provider). What methods do you use to pay bills? (% of total respondents) ______

Cash at a post office

Cash at a bank/bank branch

Transfer of funds from a bank card

Cash at services provider’s point of payment

Bank transfer from a current account

Other

Depending on socio-demographic characteristics of respondents

Depending on the age of respondents the following difference was identified in the bills payment methods. Respondents aged 25-44 years often make payment by bank transfer to the current account, transfer money from a bank card or in cash at a bank/bank branch (Table 4.51 Annex 4). The number of those who pay their bills in cash at services provider’s point of payment is higher among respondents under 34 as compared to other age groups. With increase in age of respondents the proportion of those who prefer to pay in cash at a post office increases. Data analysis in the context of educational groups also revealed some differences for this index. Thus, the majority of respondents (64.7%) with primary, basic and secondary education pay their bills in cash at a post office (Table 5.51 Annex 5). Respondents with primary vocational and secondary vocational education prefer to pay their bills in cash at a bank – slightly higher than 55% of respondents take recourse to this method of bills payment. In the same educational group, about the same number of respondents prefers to pay their bills at a post office - about 53% of respondents. In the group of respondents with incomplete higher education, higher education and post-graduate education the majority of respondents (61.3%) prefer to pay bills by transferring funds from bank card. The second most popular way of bills payment among respondents in this educational group is to pay in cash at a bank branch (54.2%).

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There are differences in the methods of account payment depending on the place of residence. Thus, for people who are living in rural areas the most common way of their bills payment is in cash at a post office– 65.8% of respondents pay their bills in this way (Table 7.51 Schedule 7). People who are living in cities, towns and urban-type localities prefer to pay their bills in cash at a bank branch (56.3% and 49.2%. respectively). Virtually the same number of urban respondents pay their bills in cash at a post office (46.5%) and (or) transfer money from a bank card (46.2%). In urban-type localities, the above methods of payment are no less common – 48.3% of respondents pay their bills in cash at a post office, and 41.1% respondents pay by transfer of money from their bank card.

By regions There are some regional differences in bills payment methods preferred by population. For example, the percentage of respondents who pay their bills in cash at a bank branch is the highest in the Grodno region (almost 60%). and the lowest in the Mogilev and Gomel (about 43%) regions (Figure 53). Respondents from the Grodno, Brest and Vitebsk regions prefer to pay their bills at a post office, while cash payments are less common for respondents from the Minsk region (42.6%). Percentage of people using their bank cards for payment of bills is the highest in the Vitebsk, Brest and Mogilev regions (more than 42%) and the lowest in the Gomel region (about 30%). Payment for services at the service provider’s point of payment is most common in the Vitebsk region, where the value of this indicator amounted to almost 23%, which is twice higher than the national average.

Figure 53. Bills payment methods in regions of Belarus What methods do you use to pay bills? (% of respondents in each region)

Belarus

Grodno region

Brest region

Vitebsk region

Gomel region

Mogilev region

Minsk region

■ Cash at a post office ■ Cash at bank branch ■ Transfer of money from a bank card ■ Cash at services provider’s point of payment ■ Bank transfer from a current account

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