Can you guess which country in a recent global survey by the World Bank registered 0 percent of adults with accounts in formal financial institutions?

It wasn’t Yemen or Sudan. It was Turkmenistan.

Can you guess which country had the second-lowest rate of account ownership? OK, that was Niger, with 2 percent.

But countries in Central Asia scrape the bottom of the table. In Tajikistan the percentage was 3; in Kyrgyzstan, it was 4.

The survey, called Measuring Financial Inclusion: The Global Findex Database (available from the World Bank’s online press center to users who register), examines why it’s better to have an account than not to have one, and why many would opt to forgo one.

The benefits of an account are pretty obvious: it’s a safe place to save money and to send or receive payments. In addition, the authors note that just having an account might act as an incentive to save, and it certainly helps budding entrepreneurs get credit.

Most people who don’t have an account say it costs too much, whether in fees or travel time (most customers in developing countries still do their banking face to face). Others say they don’t have enough money to open an account or they don’t have the required paperwork. Still others just use a family member’s account. The remaining, smaller groups either don’t trust banks or opt out for religious reasons.

Unfortunately, the survey lumps Central Asia in with Europe, so coming up with relevant conclusions about the “-stans” is tricky. But it reports that in Europe and Central Asia “31 percent of non-account-holders cite lack of trust in banks as a reason for not having an account – a share almost three times that in other regions on average.”

You might guess that Russia, with its recent memory of devaluation and lost savings, would explain much of that, but it doesn’t seem to: a relatively healthy 48 percent of adults there hold a bank account.

I would bet that it’s Central Asians, with their well-earned mistrust of their leaders and their largely state-led financial sectors pushing up that number. In Kyrgyzstan, past governments have seized shares in banks, which were thrown into limbo again when those governments were overthrown. One correspondent in Kyrgyzstan reminds me that the interim government that took over after the 2010 ouster of Kurmanbek Bakiev seized safe deposit boxes in some banks.

So what do Central Asian savers do instead? That seems to be a mystery.

Although the survey notes that popular alternatives to a financial institution can include banking via mobile phones or community-based savings clubs, those methods of saving are not widely used in Central Asia.

In Kyrgyzstan, Turkmenistan, and Uzbekistan, the authors write, “more than 85 percent of adults who report having saved in the past year did so using neither a formal financial institution nor a community-based savings scheme. Interestingly, more than 85 percent of all savers in these three economies report saving for a wedding, an education, or another future expense, a larger share than report saving for a future emergency.”

(If you’ve read our coverage of the back-breaking expense of Kyrgyz weddings that last bit should come as no surprise.)

And it’s not an insignificant number of people there who have saved, somehow: The study says that about 35 percent of adults in those three counties reported having saved money in the past 12 months.

In a kind of throwing-up of hands, the report speculates they might have bought assets, like gold or livestock, or in the report’s own quotation marks, put it “under the mattress.”

That jibes with my correspondent’s assessment that many people invest in real estate or cattle, or stash the money in safes.

Photo by Ken Teegardin/flickr.

Barbara Frye

Barbara Frye is Transitions Online’s managing editor. Email:

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