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> Posted by Susy Cheston, Senior Advisor, CFI

Visitors to our FI2020 Progress Report on Client Protection will have noted our poor math skills. (This is the section of the report that assesses global progress to date in advancing fair treatment for lower-income financial services clients.) We rated regulators a 6 on consumer protection and providers a 3—and somehow averaged those out to a 5. Our averaging skills make even less sense when you consider the three legs of the client protection stool—providers, regulators, and consumers—and realize that consumers are not even on the radar, rightfully earning a 1 at best in terms of their capacity to advocate on their own behalf. So why the optimism?

We were certainly swayed by the impressive momentum among a range of actors at the global level—including policy and private sector initiatives—toward improved consumer protection. But it’s what happens at the national level that really counts. The World Bank’s 2014 Global Survey on Consumer Protection and Financial Literacy reports that some form of legal framework for financial consumer protection is in place in 112 out of 114 economies surveyed. We are not so Pollyannaish as to think that having a legal framework is equivalent to having a regulatory and supervisory system that protects consumers well, but we do think it’s a good step in the right direction.

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> Posted by Elisabeth Rhyne, Managing Director, CFI

Today the Center for Financial Inclusion (CFI) is proud to launch the Financial Inclusion 2020 Progress Report, an interactive website that portrays the recent progress and unmet challenges on the path to global financial inclusion.

When we began the FI2020 project in 2011, we hoped to create a sense of both urgency and possibility. We believed that enabling everyone in the world to gain access to quality financial services was a goal of major development significance. We also saw that with many active players and the promise that digitization would enable many more people to be reached at lower cost, it was no longer simply wishful thinking to call for full inclusion within a reasonable time frame. Global financial inclusion had entered the realm of the possible.

Today, in 2015, we are both astonished by the progress and daunted by the gaps that remain. Global Findex data shows 700 million new accounts in the three years from 2011 to 2014, reducing the number of unbanked worldwide from 2.5 to 2 billion. National governments have created ambitious financial inclusion strategies, the FinTech industry is exploding with $12 billion in global investments in 2014 alone, and the World Bank has a plan for reaching universal financial access to transaction accounts by 2020.

Our quantitative review, By the Numbersrevealed that if the current trajectory of expansion in accounts continues, many countries will achieve full account access by 2020. The rails are being laid at a rapid rate, and there is great momentum toward universal access. But access to an account is not the same thing as financial inclusion, and progress toward meaningful financial inclusion, in which people actively use a full range of services, is lagging. The passengers – customers – are often still waiting at the station for services that take them where they want to go.

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> Posted by Saran Sidime, Operations Assistant, the Smart Campaign

Technology has brought safe and simple financial solutions to Somalia, a place where, until the past few years, they were completely non-existent. In June 2015, MasterCard became the first international payment network to enter Somalia, a country that hasn’t had a formal banking or financial system since the collapse of its government in 1991. MasterCard issued its first 5,000 debit cards to be used by Premier Bank, one of the few commercial banks in the country. The cards will be compatible with Premier’s ATMs, whereby customers can conduct cash withdrawals. MasterCard’s products will be the first domestically-issued debit cards in Somalia, the last remaining country in Africa not under sanctions that the company hasn’t worked in yet.

Somalia has been mired in decades of conflict since 1991, and the government continues to battle al-Qaeda-linked Al-Shabaab insurgents. Despite the formation of a federal parliament in 2012, creating a more stable government, turmoil continues to severely restrict development of the banking system. For example, the country installed the first ATM machines in the capital, Mogadishu, only last year.

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> Posted by Bindu Ananth, Chair, IFMR Trust

The following post was originally published on the IFMR Trust blog.

Yesterday, the Reserve Bank of India (RBI) announced in-principle Payment Bank licenses for eleven applicants. To put things in perspective, there were two new bank licenses in the last decade. The successful applicants include the largest telcos, corporate houses, business correspondents, a depository, and a mobile wallet provider. The number of licenses and the diversity of the pool bode well for the scale and scope of what will be pursued by this new category of banks in the years to come.

While previous licensing rounds were always for “full-service” banks, this represents the first round of licensing for a differentiated banking design following on RBI’s Discussion Paper on Differentiated Banking and the recommendations of the Committee on Comprehensive Financial Services for Small Business and Low-Income Households. To recap, a Payment Bank can provide deposit and payment products but cannot lend. This very important design feature has an important implication from a regulatory perspective – Payment Bank promoters now cannot “cross the floor” in terms of raising public deposits and lending these out. Therefore, the implications of “fit and proper” are now quite different for this group of promoters. This perhaps explains why this round produced eleven licenses against two in the last decade. And at this stage of development of the Indian banking sector, these eleven new entrants could be just what the doctor ordered for innovations on savings and payment services while not adversely impacting the stability of the banking system. An IFMR Finance Foundation working paper reported that the asset portfolio of the average rural household in India is composed almost entirely of two physical assets—housing and jewellery with little to no financial assets of any type.

Also from a financial system design perspective, this is a timely acknowledgement that the credit and payments strategy must evolve differentially within the broader financial inclusion strategy. While progress on credit would necessarily have to be much more measured and prudent no matter what strategies are adopted given the inherent risks and customer protection concerns, there is an urgent need to make access to payments ubiquitous. Yesterday’s announcement is an important step forward in that direction.

> Posted by Center Staff

The latest edition of the Financial Inclusion 2020 News Feed, our weekly online magazine sharing the big news in banking the unbanked, is now available. Among the stories in this week’s edition are the Microinsurance Network’s first annual “The State of Microinsurance” magazine, the findings of Child and Youth Finance International’s (CYFI) survey on youth finance regulation in Latin America and the Caribbean, and a blog post from the MasterCard Foundation on the role of microfinance associations in expanding financial inclusion. Here are a few more details:

  • The Microinsurance Network magazine sheds light on global microinsurance progress, failures and innovations, approaches to regulation, assessing and meeting demand, and the role of microinsurance in disaster risk management strategies.
  • The Latin America youth finance regulation survey, which CYFI aims to replicate in other regions, revealed that there is a great diversity in approaches to regulating practices affecting this client segment, and that young people are rarely seen as independent economic actors.
  • In a recent blog post, the MasterCard Foundation draws on its experience working with microfinance associations in sub-Saharan Africa to discuss their myriad abilities to advance financial inclusion, including through knowledge sharing, collecting and analyzing sectoral data, and supporting collective lobbying.

For more information on these and other stories, read the latest issue of the FI2020 News Feed here, and make sure to subscribe to the weekly online magazine by entering your email address in the right-hand menu so you can be notified when the latest issue comes out.

Have you come across a story or initiative you think we should cover? Email your ideas to Eric Zuehlke at

> Posted by Prateek Shrivastava, Global Director, Channels & Technology, Accion

The National Assembly of the Federal Republic of Nigeria passed the Central Bank of Nigeria (CBN) Act in 2007. The Act included provisions for the creation of the CBN to ensure monetary stability, issuing and maintaining legal tender, and promoting the implementation of best practices including the use of electronic payment systems in all banks across Nigeria.

In the same year, the CBN developed the Financial System Strategy 2020 wherein the need for electronic financial services (amongst many other reforms) to make Nigeria a competitive economy was identified. Since 2008, the CBN has been extremely active in developing and implementing guidelines and frameworks to support the digitization of financial services (for example, all banks and microfinance banks need to have core banking systems, and the use of ATMs is governed) including mobile money and agent banking. The Guidelines on Mobile Money Services in Nigeria were approved and published in June 2009. Most recently, the CBN has also released a licensing framework for “super agents” that banks and other regulated financial services providers can use to bring services to the markets and streets in Nigeria.

Nigeria’s mobile money market hosts about two dozen licensed mobile money operators (MMOs) that include banks and others, which, in spite of their array, have proven inadequate in terms of country coverage and active adoption.

In the recent words of Dipo Fatokun, Director of the Banking and Payment System Department of the CBN, “Expectations of mobile money [in Nigeria] have not fully been met.” Annual mobile money transactions in the country in 2014 exceeded N5 billion (US$25 million), while in Kenya and Tanzania total annual transactions in 2013 were US$22 billion and US$18 billion.

A report from EFINA published in 2014, a full five years after the CBN guidelines for mobile money were put in place, shows that only 800,000 Nigerian adults currently use mobile money, representing less than one percent of the adult population. Today, even arguably the most successful entity, Pagatech Nigeria with its innovative use of technology and strong management team, is advertised sporadically on the streets of Lagos and even less further afield. Awareness is low and therefore adoption is low.

In my opinion, this lack of progress can be attributed to two key issues:
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> Posted by Center Staff

Good morning! Freshly published is the latest edition of the Financial Inclusion 2020 News Feed, our weekly online magazine sharing the big news in banking the unbanked. Among the stories in this week’s edition are the World Council receiving a USAID award to catalyze affordable housing in Haiti, a multi-partner initiative to train women across Nigeria to become mobile banking agents, and Tanzania setting a new financial inclusion goal. Here are a few more details:

  • The World Council with support from USAID and others will work directly with financial institutions and housing developers to help expand affordable housing financial products and services in Haiti.
  • The Cherie Blair Foundation for Women is working with FirstBank to provide technical, business, and financial literacy training to 2,500 women across Nigeria to become agents for FirstBank’s mobile banking platform.
  • Last week Tanzania set a new goal of extending financial services access to 75 percent of the population in 2016 – as a follow-up to the goal of 55 percent in 2016, which was surpassed in 2014.

For more information on these and other stories, read the latest issue of the FI2020 News Feed here, and make sure to subscribe to the weekly online magazine by entering your email address in the right-hand menu so you can be notified when the latest issue comes out.

Have you come across a story or initiative you think we should cover? Email your ideas to Eric Zuehlke at

> Posted by Sonja E. Kelly, Fellow, CFI

Financial Inclusion 2020 Blog Series banner imageFinancial Inclusion 2020 (FI2020) is a global multi-stakeholder movement to achieve full financial inclusion, using the year 2020 as a focal point for action. This blog series will spotlight financial inclusion efforts around the globe and share insights from key thought leaders in financial inclusion, with a specific focus on quality beyond access.

Tuesday marked a historic day for Peru: the country launched its National Financial Inclusion Strategy. While Peru has been lauded in the past for its environment for financial inclusion, its public-private sector partnerships, and its leadership in conversations on international banking standards, this national strategy elevates Peru’s commitment to financial inclusion to a new level. In particular, we want to celebrate the strategy’s commitments to consumer protection, financial literacy, and the inclusion of vulnerable people.

Analysis of the World Bank Global Findex this year revealed that countries that have a national strategy (not merely a commitment or stand-alone programs) for financial inclusion saw twice as much bank account access growth in the last three years compared to countries that did not have a national strategy. For Peru, this is great news, as according to the same data source, less than 30 percent of adults in the country had access to an account in 2014.

The path to financial inclusion articulated in the strategy, however, is not focused on access to accounts, making Peru an outlier among its peers that have implemented national strategies. Instead, Peru has oriented its strategy toward improving systems for accessing a range of products and promoting supportive consumer protection, financial education, and attention to the most vulnerable. The national strategy has seven different lines of action: Read the rest of this entry »

> Posted by Magauta Mphahlele, CEO, National Debt Mediation Association (NDMA)

A few weeks ago, South Africa’s Department of Trade and Industry published new proposed regulations pertaining to the National Credit Act limiting fees and interest rates on short-term and unsecured loans along with credit cards. The public may lodge comments to the draft regulations up until 30 days after its publishing date of June 25th. The intelligence used to inform the proposals have not been released so it is not clear what policy, cost, or operational factors were taken into consideration to arrive at the outlined changes. Meanwhile, the microfinance industry in the country, which has been lobbying for the flexibility to charge significantly higher interest rates and fees, seeks to understand the regulators’ rationale.

The draft regulations were published after a protracted court battle where one of the industry associations representing micro-lenders requested the court to force the regulator and policymakers to review the fees requirements of the National Credit Act. The fees and interest rates hadn’t been reviewed since the Act became effective in 2007 – a concern when taking into account factors like inflation.

Credit providers have responded with dismay and concern about the proposed changes, especially the interest rate caps on unsecured loans. They have expressed the fear that the proposed interest and fee changes will affect the cost of administering credit, reduce profits, and constrict access to credit for borrowers. Other commentators have viewed the reductions favorably considering consumers are already over-indebted to a large extent and the interest rate cycle is predicted to start trending upwards. On this blog a few months ago, I shared that in 2014, the National Credit Regulator (NCR) Credit Bureau Monitor revealed that out of South Africa’s roughly 23 million credit active individuals, about 11 million have impaired records.

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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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