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> Posted by Center Staff
A new paper from MasterCard corroborates recent findings on persistent gaps in the financial inclusion of women, indicating that in India 58 percent of women report difficulty accessing credit, savings, or jobs because of their gender. The paper is part of MasterCard’s Connectors Project, which examines the migration of excluded populations into progressive economic inclusion. The recently-released Global Findex data found that between 2011 and 2014, the gender gap in access to financial services remained steady at 9 percent in developing countries.
The reported difficulty faced by women in India was higher than that of the paper’s other surveyed countries: Indonesia, Egypt, and Mexico. Across all four countries, 33 percent of women expressed these challenges. Across all genders, in India, 67 percent of respondents reported worrying about money they owe to others and 82 percent worry about their future prospects. Along with women, ethnic and religious minorities in India reported additional challenges in economic participation. Fifty-eight percent said it was difficult to get jobs or credit because of their ethnicity or religion – compared with 28 percent across the surveyed countries. Whether or not these women and ethnic/religious minorities do in fact face discriminatory treatment, awareness of their perception is critical. In accessing banking services for the first time, or pursuing economic opportunities, trust and confidence can be a make-or-break.
> Posted by Alison Slack, Associate, CFI
As CEO of the South Sudan Microfinance Development Facility, Elijah Chol is tasked with helping develop the financial inclusion sector in his fledgling country. Elijah is a member of the inaugural class of the Africa Board Fellowship (ABF) program, who begin their six-month fellowship in June in Cape Town, South Africa. We recently sat down with Elijah to learn more about his work in microfinance, and the governance challenges he faces.
South Sudan is a country striving to emerge from decades of crises on many fronts. “Post-conflict countries like ours have unique problems,” says Elijah. “One of the most pressing issues for us is that of education, especially in the villages and rural areas.” Because the education situation is so desperate, it is difficult to find board members with the skills necessary to effectively guide institutions.
> Posted by Julia Arnold, Research Consultant
After two weeks of speaking with bank and microfinance institution staff, entrepreneurs, social investors, policymakers, and tech companies in India, my once clear understanding of how to build financial capability has now been completely scrambled. Building financial capability – that is, helping clients change (knowledge, skills, and ultimately behaviors) to make good financial choices – has taken on many layers of complexity and challenges in the context of, and in the face of, the realities of India’s poorest people.
But that is, of course, the fun of travel.
To briefly put India’s banking services in context – many villages in rural India still do not have a bank. According to the latest World Bank Findex data, half of rural Indians and nearly half of all Indians remain completely unbanked. Even if a bank exists in a village, social constraints often prohibit women from using it due to both limited mobility and lack of knowledge about and decision-making power over household finances. Basic access and usage of mobile phones remains limited. From my own earlier research with Cashpor Microcredit, I know that numeracy and literacy, as well as access, remain barriers for women to save with mobile technology.
> Posted by Center Staff
The scale of the unmet financing needs of older adults around the world – and especially in lower and middle-income countries – is so significant that if unaddressed, it won’t just be each generation as it enters the later years that pays the price. It’ll be their families, healthcare systems, governments, and societies writ large, too. In India, for example, only 12 percent of the population has any sort of pension. A rapidly growing demographic, within 25 years, the percent of the world’s population over 60 will nearly double.
Recent progress does deserve mention. Just a few days ago, on the heels of last year’s launch of the Jan Dhan Yojana national financial inclusion strategy, India’s central government unveiled three new contributory social security schemes for pensions, life insurance, and disability insurance. Our hope is that these new programs are hugely successful and prove demonstrative for other countries to follow.
> Posted by Center Staff
What are the most important questions that need to be researched in the financial inclusion arena?
The Center for Financial Inclusion at Accion will soon launch a fellows program to support research and thought leadership in financial inclusion – and we are calling on you to help! The purpose of this program will be to encourage independent researchers and analysts to examine some of the most important challenges in the financial inclusion arena. We plan to select a few priority research topics for fellows to examine.
Here’s where you come in. Below is a list of research topics that members of our Financial Inclusion 2020 team believe need answering. We’re checking in with you – our blog audience – to find out which topics you think are the most important to investigate. Please consider this list a starting point. Give us thumbs up or down on the topics listed, and propose topics of your own. Once we select the top priority questions, we will issue a call for proposals. Meanwhile, we offer this list to provoke a broader conversation about research needed in the financial inclusion field.
You can respond either in the comment block below, or by email to email@example.com.
- Impact of ubiquitous internet access on the business models for financial inclusion. By 2020, the vast majority of the world’s people will have access to internet through smart phones and tablets. Internet access could transform the way financial service providers and customers interact and facilitate a richer interface with customers. What scenarios are possible and are providers ready to respond?
- Under what conditions do “on-ramps” lead to deeper inclusion? With the World Bank’s commitment to Universal Financial Access focused on connecting people to transaction accounts, the next question is how (and whether) such connections lead to active account usage or access to additional products. What are the cases of successful access expansion that have led to deeper inclusion and why did they succeed?
> Posted by IFMR LEAD
The following post was originally published on IFMR LEAD’s Development Outlook blog.
Picture yourself as a working-woman in rural Bihar. Lucky for you, at this time, it’s the three to four months in which you get a daily wage: harvesting season. Unlucky for you, as a Paswan, or Mahadalit, you got the short end of the bargain in land redistribution. Thus, work for you at this time means caring for someone else’s land, for a daily wage of 200 rupees. Your day starts at 5 a.m. with household chores: cooking, cleaning, and feeding the one or two livestock you own. Then you travel a short distance over to the 4-5 acre plot of land owned by one of the landowning families in your village.
According to our study’s ongoing results, in Bihar, 100 to 150 days of work is the most you’ll get as a female agriculture laborer throughout the year. If the family owns their own land, then the working woman acts as a kind of manager to the affairs of the land and the house. All women spend their days collecting cow dung and drying it in patties. When the money you are receiving is irregular, and most of your tasks are not income generating, what are the savings you have left by the end of the year?
“Nothing!” one respondent said to me in a village, when I asked. “We spend it all.”
> Posted by Magauta Mphahlele, CEO, National Debt Mediation Association (NDMA)
Overall, 2014 was not a good year for South African consumers of credit. Evidence of this is based on statistics from the banking regulators as well as the casework compiled through the work of the National Debt Mediation Association (NDMA) with individuals and mineworkers employed by two of the largest mining companies in South Africa.
The South African economy has remained stagnant, contributing to strikes and retrenchments across the board, especially in the mining sector. For those consumers who were lucky not to be retrenched, factors, such as price inflation, a freeze on bonuses, reduced commissions, and personal circumstances like illness, divorce, and death in the family put pressure on their finances leading many to default on their debt repayments. Despite several regulatory initiatives and interventions, the results of the December 2014 National Credit Regulator (NCR) Credit Bureau Monitor showed that the number of credit active consumers was 22.84 million and of these, 10.6 million (46 percent) have impaired records.
> Posted by Joshua Goldstein aka Mr. Provocative
In The New York Times last week was a story of loss and despair titled “1.5 Million Missing Black Men”. It stated: “One out of every six black men, who today should be between 25 and 54 years old, have disappeared from daily life.” Where are these men? What does this mean to the women in their communities? The answer to the first question is that they often die early or are living out much of their lives behind bars. And the answer to the second question is equally tragic and heartbreaking: In many ravaged communities, there are not enough men to be fathers and husbands. In our republic, this reality of the missing men is a profound challenge to our values, our democracy, and our future as a nation. I think there is a consensus on that.
So, you ask me: What does this terrible set of facts about an American tragedy have to do with microfinance and international development? In my opinion, an awful lot. As policy makers and practitioners, it often seems that men have disappeared from our “interventions” and work plans. Resources are focused on empowering poor women, who will work hard and take care of the children (half of whom are boys), while the men are scoundrels or losers who cannot be counted on when it comes to the family’s well-being. Why prioritize men in poverty reduction strategies? Why waste resources on this failed sex?
> Posted by Alex Counts, President and CEO of Grameen Foundation, and Co-Chair of the Microfinance CEO Working Group
The Microfinance CEO Working Group, as part of its commitment to client protection in microfinance and financial inclusion, set out in early 2014 to develop a model law that could be adapted, in whole or in part, into different national contexts. The Working Group’s partners were the global law firm DLA Piper and its “Council of Microfinance Counsels” which is composed of the in-house counsels of all Working Group members. After 15 months of effort, the first version of this law has now been completed and released. The blog below describes this tool and how it can be used.
Those who set policy for consumer protection in financial inclusion have a powerful new tool at their disposal, one that financial inclusion practitioners, legal experts, and regulators have had a hand in creating.
Over recent months, the law firm DLA Piper/New Perimeter has been working with the Microfinance CEO Working Group and a subgroup of the Council of Microfinance Counsels to prepare the Model Law and Commentary for Financial Consumer Protection. This is a framework of suggested legislation on financial consumer protection based on the Client Protection Principles as promoted by the Smart Campaign. The seven Client Protection Principles set standards that clients should expect to receive when doing business with a microfinance institution, and cover such critical areas as transparency, fair and respectful treatment, privacy, and prevention of over-indebtedness. The team that developed this studied multiple countries that had the most progressive and effective laws related to client protection in financial services, and in other areas.
The Model Law can be used in a variety of ways.
> Posted by the Access to Finance Unit, Multilateral Investment Fund, Inter-American Development Bank
With fertility rates falling and life expectancy on the rise, the world’s population is aging rapidly. And though increasing longevity can be considered a triumph of development, for Latin America and the Caribbean, this rapid aging presents a serious challenge: the population is not financially prepared to support itself during old age.
According to the Inter-American Development Bank’s (IDB’s) book Better Pensions, Better Jobs, by the year 2050 there will be three times as many people over the age of 65 as there are today in the region. However, if trends continue, by this date only one in two seniors will have saved for a pension. This means that about 130 million workers are not saving for their pension.
In response, several countries have taken efforts towards increasing pension coverage to lower-income and vulnerable segments through non-contributory pension schemes. From 1990 to 2013, 13 countries in the region implemented programs aimed at expanding non-contributory pensions. Still, even those that receive pensions are finding their value, generally less than US$10 per day, insufficient to cover their basic needs. This means that current and future generations of seniors will have to rely on alternative sources of income to complement their pensions.