> Posted by Alex Counts, President and CEO, Grameen Foundation

The Financial Inclusion 2020 Global Forum was a remarkable and historic convening. I was honored to have been invited to attend and co-facilitate an “ideas to action” roundtable about one of the five parts of the Roadmap to Financial Inclusion .

Immediately after the event I reached out to Elisabeth Rhyne to understand how I could help build on the groundwork laid at the conference. She suggested I write a blog post about my experience. My immediate reaction was that commenting on such a wide-ranging and successful effort was a bit daunting. But I felt it was worth a try.

Dissecting the Term “Financial Inclusion”

I will admit that I have warmed slowly to the language of financial inclusion and financial capability. Are these just new buzzwords for time-tested concepts? (And if so, why use them?) Let’s assume they are new concepts. If so, financial inclusion feels like more of a means than an end. For me, the end is the reduction of poverty and the empowerment of low-income women – so why not focus on those? If having a poor or even middle-class person simply open their first “no frills” bank account is considered a step towards financial inclusion, regardless of how useful or helpful that bank account is, is this banner a lackluster one to rally under? Further, it is not clear to me that the provision of quality financial services through informal financial institutions (however defined) is being properly valued in the financial inclusion agenda. Finally, does making “financial capability” something of a prerequisite for people accessing formal financial services effectively let financial institutions off the hook for meeting clients where they are and designing appropriate products for them?

While my apprehension about these concepts has not entirely dissipated, I emerged from the Global Forum feeling that this campaign for full financial inclusion, at least as defined by CFI, is evolving as a powerful rallying point for a diverse coalition of providers, regulators, technologists, researchers, and activists. The notion of full inclusion is essential. I now see financial capability as a concept that defines the end state when financial education (through whatever means) is done effectively. The Forum probably had a similar impact on many others – helping them travel from a place of confusion or even wariness towards strong alignment and shared purpose.

Gender, Technology, and Human Networks

With a clearer understanding of the broader financial inclusion agenda, let me draw out a few observations and remaining questions as we take our first steps down the road to full financial inclusion. I will discuss what I see as the role of gender, technology, and trusted intermediaries in the financial inclusion landscape.

The issue of gender was all over the map at the Forum. On day one it was basically ignored, while on the second day it emerged as a critical theme, helped by an early push by Cherie Blair, who gave a terrific speech. At one point later in the program, Tilman Ehrbeck of CGAP asked an all-male panel if the tech start-up space had a “gender problem.” The panel responded with an emphatic no, which prompted a few guffaws in the crowd, and an irreverent tweet from yours truly.

If we are to place a big bet on the mobile phone as a means of providing financial services and useful knowledge to the so-called “invisible market,” we need to recognize that in some societies, poor women have limited access to and comfort with these devices. A Grameen Foundation study clearly showed this to be the case in India, though a soon-to-be published follow-on report suggests the situation is quite different in the Philippines. Further underscoring the gender issue, it was striking when, after seeing several all-male panels of speakers, the staff that flawlessly produced the Forum was asked to come up for a well-deserved round of applause, and there was not a man among them!

If we are to rely on technology entirely, and ignore the importance of human networks, we risk financial inclusion becoming almost meaningless to the poor, and especially to the poorest. This points to the essential role that microfinance field officers, and other distributed human networks, can play in making the potential of full financial inclusion real and robust. Such human networks aid in making information or services “discoverable,” provide guidance to enable what is delivered over a phone to be effectively used, and also provide local context to improve outcomes. Of course, microfinance field officers will likely need to reinvent their roles to remain relevant in such a changing landscape. Microfinance networks such as those represented in the Microfinance CEOs Working Group can help guide this reinvention agenda.

The essential role of “boots on the ground” was underscored by Grameen Foundation’s experimentation with technology-enabled agricultural extension and health education in Uganda. When we relied on a purely technology-driven approach in our “health information” pilot, millions of text messages flew around the country, and knowledge of good health practices increased … but (pay attention here) behavior and outcomes did not change in the ways we had hoped. Translation: No impact on food production and poverty. We were humbled, but also emboldened.

We incorporated these lessons into our “Community Knowledge Worker” program. In this initiative, peer-nominated “Community Knowledge Workers” (CKWs) are central to making technology work for the poor. (CKWs are farmer paraprofessionals serving as part-time agriculture extensionsists, armed with a $90 low-end smartphone and a specialized suite of applications to deliver relevant and actionable information to the poor.) I am happy to report that this approach where technology and human networks were properly combined did lead to changes in behavior and outcomes for subsistence farmers, according to a study by the International Food Policy Research Institute. So, if the financial inclusion movement satisfies itself simply with products being used and neglects tracking the quality and impact of use, we may be sorely disappointed with where we end up in 2020.

While it is essential to pursue a rigorous client protection framework as part of the roadmap, it is incomplete without parallel emphasis on client advancement. This is where the essential roles of the things like the Universal Standards for Social Performance Management and Truelift come into play, and it underscores the importance of easy-to-use measurement tools such as the Progress out of Poverty Index ® (which can now be filled out on a mobile phone and instantaneously uploaded to the Cloud using Grameen Foundation’s Taroworks solution).

During the closing session of the Forum, I thought it was terrific that the organizers invited Larry Reed of the Microcredit Summit Campaign to make some brief comments. His excellent comments linking financial inclusion by 2020 to the goal of eliminating extreme poverty by 2030 went a long way to relieving my anxiety about financial inclusion being thought of mainly as an end, rather than as a means. The Financial Inclusion agenda will benefit from collegiality with related efforts, campaigns, and convenings. Kudos to the CFI team for its many inclusive and collegial gestures and actions in the lead-up to the Forum.

In the kick-off speech of the final session, a speaker said that financial inclusion was “not just possible, but inevitable.” For me, that sentiment conjured up the sense that technological and other forces far beyond our control were going to bring about financial inclusion on their own. This notion begets a critical question: what role does that leave for “the rest of us” if what we want is going to happen more or less automatically?

I don’t believe that full financial inclusion is inevitable (certainly not by 2020), and it may not have been what the speaker intended, but the use of the word “inevitable” muddled the Forum’s call to action a bit. (Though Rhyne helped reframe this issue for me in a more empowering way when she said, “For me, the takeaway from thinking of financial inclusion as ‘inevitable’ is that it calls for focus on fulfillment of the underlying goals. So the people who care about client outcomes have to keep connecting with the people who are building automated scale, and calling them to attend to the quality, the products, and the results.”)

From Ideas to Action

For our part, my colleagues and I at Grameen Foundation are going to give some deep thought to how we can advance this campaign, focusing on how technology and human networks can interact and which sustainable business models can most effectively create measurable, positive social change for those not financially included today. We’ll also explore how we can continue to work with partners in all sectors (private and public) to promote client protection and advancement while making sure we regularly view our progress through a gender lens and a poverty lens.

It is exciting to know that hundreds of organizations – large and small, Northern and Southern, commercial and philanthropic, hi-tech and low-tech – are going through similar processes of figuring out how they fit into and can advance the financial inclusion agenda. Such is the power and promise of a thoughtful and well-executed convening focused on reaching a bold global goal.

Image credit: The Center for Financial Inclusion

Have you read?

Alex Counts on Karlan and Appel’s “More Than Good Intentions”

Microfinance CEOs Make Six Major Commitments at 2013 Partnerships Against Poverty Summit

Launching the Roadmap to Financial Inclusion With a Focus on Greater Access, Quality, and Protection for Customers