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> Posted by Ben Mandell, International Programs Manager, Water.orgAccess to safe drinking water and hygienic sanitation are true necessities for healthy families. Yet, access rates for water and sanitation remain stubbornly low in most low-income countries. The negative health implications can be dire and include diarrheal disease which can result in premature mortality and childhood malnutrition and stunting.  From an economic perspective, “The health consequences of poor sanitation are substantial and contribute to over US$50 billion in GDP loss annually,” according to a new India focused learning note jointly developed by and the World Bank Water and Sanitation Program (WSP).

In the learning note, and WSP, both active globally in working to expand access to water and sanitation, collaborate to share their research and findings on how household lending can help drive improved water and sanitation uptake as well as provide economic and social benefits to local financial organizations., through its WaterCredit program, provides capacity-building grants and technical assistance to create, pilot, and scale water and sanitation financing. Currently, WaterCredit provides funding to microfinance providers and NGOs to support the creation of programs and these partners then leverage funding from banks and capital markets to disburse loans to people in need. Accordingly, “ has provided US$11.3 million in subsidies to financial institutions and NGO partners worldwide, which in turn have disbursed over US$120 million in loans reaching 2.4 million people.”

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> Posted by Jessie Fisher and Robyn Robertson, Good Return

Globally 1.2 billion people live in extreme poverty, with women and girls disproportionately affected. Increasing access to technology creates opportunities in education, expanded informational resources, employment, entrepreneurship, and financial services – all of which can help break the cycle of poverty.

These are not new or debated ideas. However, in the realm of financial services, in order to harness advancements in technology and achieve greater and more meaningful inclusion of women, we still need to better understand their preferences and behaviors and the social context they inhabit.

This is where quality gender-based data, which has almost entirely been lacking in financial inclusion, plays a key role.

For example, to ensure we understand a new market, we must ask ourselves questions like: Have we invested the time and resources needed to meaningfully engage with both men and women? Have we considered the time needed to build trust in these communities (especially if they have had disappointing experiences with other organizations in the past)?

Satisfying such considerations isn’t simple or easy. We may also need to travel further to reach women clients, and provide safe spaces for them to speak openly about their lives and the things they would like to change.

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> Posted by the Smart Campaign

To date, 44 financial institutions around the world have been certified as meeting the Smart Campaign’s standards for consumer protection. Those institutions, which adhere to the Campaign’s Client Protection Principles including transparency, fair and respectful treatment, responsible pricing, and prevention of over-indebtedness, collectively serve more than 22 million low-income clients.

Recently, the Campaign invited the heads of certified institutions to share their experiences with certification. In a series of video interviews, the CEOs discussed why they elected to engage in the process, what they learned, how and why it improved their business, how investors have reacted, and what it has meant for their customers.

We invite you to take a look at the video, above or here, to learn first-hand about their rationale for undergoing certification and what it has meant to their operations. And of course feel free to share it with your network.

For more information about the Campaign, please visit the website.

> Posted by Center Staff

The 2016 Harvard Business School – Accion Program on Strategic Leadership in Inclusive Finance is now accepting applications for what will be another exceptional week of learning and exchange among world leaders in financial inclusion. The program will take place March 28 – April 2, 2016 at the HBS campus in Boston, Massachusetts.

The 2016 HBS-Accion Program builds on ten successful years and over 600 alumni – CEOs, presidents, executive directors, and other high-level professionals – from roughly 100 countries.

Today’s landscape of financial services for the base of the pyramid is increasingly complex, with a diversity of products, providers, and support organizations extending services to previously excluded populations. Disruptive technologies and new ways of doing business are creating new possibilities for reaching more people with more types of services. It’s an exciting time for financial inclusion, though for leaders steering their organizations through this landscape, the pace and magnitude of change may look overwhelming. Financial service providers participating in the program will benefit from the guidance of some of the world’s best business minds to better understand the possibilities and the pitfalls of today’s financial services marketplace. Policymakers, regulators, and investors will find it valuable to get a closer look at how the industry is evolving in countries around the world.

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> Posted by Joshua Goldstein aka Mr. Provocative

In the seventh Client Protection Principle, the Smart Campaign lays out the way that financial services providers should handle complaints: 1) Effective client feedback mechanisms are in place; 2) Clients are aware of how to submit complaints and do so as needed; and, 3) Complaints are handled promptly and adequately.

Seems easy and straightforward enough. But making this process truly client friendly is truly a daunting challenge. On the “demand side,” poor customers may feel ill-equipped to pose questions to company representatives who come from a different class, caste, or ethnicity. The Smart Campaign’s Client Voice research found as much in both Asian and African markets. It may be psychologically next to impossible—even in the most client friendly institution.

And if the psychological issue is not an obstacle, the technical and procedural challenges may be opaque enough to lead to failure anyway.

Even educated and savvy consumers can get lost in the complex maze of call center options delivered by that hideously cheerful computer voice – you know the one. “Lower touch” often means “no touch.” And even if a well-meaning customer service representative finally answers the phone and tries to help, he or she may be just a cog in a far flung system – unable to get the needed answers.

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> Posted by Mark Pickens, Senior Director, Visa

The future doesn’t come with an owner’s manual saying how to set up, operate, or troubleshoot it. When we launched mVisa in Rwanda in 2013, it was the first interoperable mobile phone-based payment ecosystem in any emerging market. We didn’t know what was possible. But we knew what we were aiming at. We wanted to make mobile money work better.

Nearly all mobile money schemes are “closed loops”. They do not permit funds to be shared with users of any other scheme. Since consumers cannot transact with everyone they want or spend everywhere they go, they see mobile accounts as less useful than cash. Fewer make the switch from cash, the net financial inclusion impact is stunted, and commercial returns are blunted. The idea of mVisa is to connect the closed loops by routing mobile money transactions via VisaNet, the global software and data centers that process transactions by more than 2 billion account holders and sustain more than 30 million points of access in the Visa network.

We chose Rwanda to pilot the mVisa concept. A smaller market makes it easier to know and be known by key stakeholders. That is an important consideration when starting a multiparty ecosystem that requires all players to move in a similar direction in a similar timeframe. Rwanda fit the bill well.

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> Posted by David Porteous and Gavin Krugel, Chair and CEO, the Digital Frontiers Institute (DFI)

We have each been involved in the field of payments in some way or other for fifteen years at least. One of us (David) started through the design of a new credit card program for a bank; but soon had the opportunity to experience some of the earliest mobile payment schemes then emerging in Africa from 2003 and thereafter to be more engaged in the policy and strategy issues of mobile money. The other (Gavin) started as lost card call center clerk from where his payment career developed through new product design, delivery and management to being one of the early pioneers of mobile money.

In the early days of mobile money, there was no foundational training available which would have enabled us better to understand the height and breadth of the journey on which we were embarking. Both of us learned ‘on the job’—sometimes from other people more experienced than we were, and sometimes just through having to work through the issues ourselves. Learning on the job in a new field can be fun; but it also is slower. Today, we view as self-evident a range of issues which were anything but in the early days. We certainly had little idea at the outset that payments was a field in itself, worthy of our professional focus. If anything, we first experienced payments as an outgrowth of banking, done mainly by banks, for banks, for the purpose of collecting their loans, for example.

How the field has grown since then! Technological change has swept up and down the payment value chain. The number and nature of payment providers has exploded. So has the scale of related ambition to accelerate it further. In 2015, the World Bank President Kim launched the goal of Universal Financial Access by 2020, which means every adult on the planet having what amounts to a payment account—a safe store of value to and from which digital transfers can be made.

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> Posted by Susy Cheston and Sonja E. Kelly, CFI

2652377697_7cd2f08d4e_oAging is an issue that we all hope to face personally, if we haven’t already. As we prepare to participate in European Microfinance Week, we are more convinced than ever that this is a critical topic for the financial inclusion community to address. (If you are planning to be at European Microfinance Week too, make sure to check out our panel on the Sustainable Development Goals and financial inclusion!) In Europe, the aging of the population is well acknowledged. With average life expectancy in Europe among the highest in the world, at 77 years, the proportion of the population reaching older age is naturally growing. About 25 percent of Europe’s population is now over the age of 60, and that percentage is set to rise. The aging of the population is well understood in Europe, but what is less recognized is that the middle and lower-middle income countries of the world – the countries that encompass most of the world’s population – are already beginning to experience the same older age population boom. In most middle income countries, from Mexico to China, over-60s are the fastest growing cohort of the population. Aging is a product of successful development. Increased life expectancy, better family planning mechanisms, and higher quality of life all contribute to growth in the proportion of the population that is older.

Aging is a reality, but can it also represent an opportunity for financial institutions? The smart money is on providers who recognize that the answer is yes, and work to figure out how to respond.

We’ve created a list of activities, some practical and some research-oriented, we think would be valuable to close the gaps in financial inclusion for older people and for younger people who want to prepare for their older age. And, frankly, we would love for you to steal these ideas!

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> Posted by Rafe Mazer, Financial Sector Specialist, CGAP

CGAP recently launched a Mystery Shopping Technical Guide, based on our experiences sending lower-income consumers to seek financial products in markets as diverse as Ghana, Kenya, Malaysia, Mexico, Peru, and the Philippines.

The method of training actual consumers to conduct mystery shopping has proven helpful to understand the challenges they face in achieving financial access and receiving quality product advice. In several markets we found that sales staff often restrict information on fees and charges and do not provide consumers with the lowest cost product option that matches their needs. For example, in Mexico and Peru we saw sales staff who neglected to offer low-fee savings products available at their institution, while in Ghana sales staff never mentioned the APR of a loan, as they are required by law to do. In Malaysia, insurance sales staff did not use the mandatory Customer Fact Find Form which helps assess customers’ needs and product suitability.

These findings are not surprising to those who study client protection and financial advice, and studies in markets such as the U.S. and India have found similar issues with sales staff. All of this raises a fairly important question of “Can we fix financial advice from frontline bank staff?” Or is the incentive to mis-sell too great and monitoring a sufficient number of individual sales practices too burdensome? This is a discussion I have had with regulators. How do you use policy to drive behavior change in a market? The short answer is that it’s not easy; the long answer is that behaviorally-informed policies, product regulation, and market monitoring tools can help.

But what about the committed leadership of organizations that have signed on to the Smart Campaign (which include providers we have visited during these mystery shopping exercises)? If mystery shopping shows that sales staff do not always keep the customer’s best interests in mind, can we fix this with provider or industry-level changes in sales practices or perhaps through sales staff training? I would like to take advantage of this forum to hear from providers who have implemented policies to fix sales staff misconduct so we can start to document good practices for monitoring sales staff behavior. To help kick things off, here are a few ideas from my side, based on our mystery shopping work:

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> Posted by ideas42

The following post was originally published on the ideas42 blog.

It’s simply a fact that many products, policies, and services created specifically to benefit everyday people are either under-used or not used at all. Whether it’s helpful savings tools, financial aid for education, or comprehensive health insurance plans, many of us simply never enroll or use them despite intending to do so. So what’s going on?

One major factor is that most of these underutilized programs have been designed according to a “traditional” view of human behavior, in which designers assume that we always take the time to consider all of our options, choose what’s rationally the best option for us, and then act on it.

Behavioral science, however, breaks from this traditional model. We find that in reality, we don’t always carefully compare our options, if we even think about them at all. Likewise, if we do make a good choice, we may not necessarily follow through on it. So in order for solutions to be truly effective, they must be designed for how people really are, rather than how we imagine they should be.

This was one of the main things ideas42 kept in mind when approaching the problem of low retirement contribution rates in Mexico. Regular readers of our blog may remember that under the current pension system, Mexican workers stand to retire on just 40 percent of their current salary, unless they make additional individual contributions—yet the overwhelming majority of Mexicans aren’t taking these crucial steps to improve their savings.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.

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