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> Posted by Jeffrey Riecke, Senior Communications Associate, CFI

GSMA’s Mobile Money for the Unbanked (MMU) program recently released the report ‘Mobile Financial Services in Latin America & the Caribbean’, spotlighting the region’s booming mobile money activity. I talked with the report’s authors, Mireya Almazán and Jennifer Frydrych, to learn more about the project. The first half of our conversation follows. The second half of the conversation will be published in the coming days.

One of the headline messages of the new report is that the mobile money market in Latin America and the Caribbean (LAC) is the fastest growing of any region in terms of account ownership. How do the numbers look?

Collectively, the 37 mobile money services in the region account for roughly 15 million registered mobile money accounts and 6.2 million accounts that have been active within the past 90-days. Notably, LAC witnessed a 50 percent growth rate in the number of new registered mobile money accounts between December 2013 and 2014, making LAC the world’s fastest growing region in new accounts. LAC’s users are more active than the global average active customer rate (42 percent of all accounts are active, compared to 35 percent globally). Most encouragingly, there are now five deployments in LAC with over a million registered customers. Each of these deployments counts at least half a million 90-day active customers, and together they cover an extremely diverse set of markets.

The three markets that stand out in the region are Paraguay, Honduras, and El Salvador. These three markets all feature in the top 15 globally for mobile money account penetration (number of active mobile money accounts divided by total adult population).

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> Posted by Center Staff

Larry Reed, director of the Microcredit Summit Campaign, recently sat down with Susy Cheston, senior advisor to FI2020, and Anton Simanowitz, co-author of the new book The Business of Doing Good, to discuss how organizations can do good work and turn a profit, particularly in the microfinance sector.

In exploring this question, Simanowitz draws on key insights from the new book, in which he and co-author Katherine Knotts studied the success of AMK, a social enterprise which has touched the lives of millions of people living in poverty in rural Cambodia. This study revealed six powerful strategies to improve business to do good:

  1. Don’t just offer products; respond to client needs
  2. Ask good questions and have good conversations
  3. Do what it says on the tin
  4. Motivate staff to do difficult work in an excellent way
  5. Own the dirt road
  6. Adapt to the changing landscape

Find out more about the thinking behind these insights, here.

In the latter half of the book, the authors explore the disconnect between theory and practice and the resulting implications for client value. AMK’s success is largely attributed to its recognition of the distinction between client wants and client needs, which are rooted in the meaningful conversations the organization has with its clients. The authors observe, through their exploration of AMK, that vision is ensured only when it follows intent, instead of being constrained by conventional wisdom.

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> Posted by Center Staff

What’s happening this week in the world of financial inclusion? Check out the second issue of our new weekly online magazine, the Financial Inclusion 2020 News Feed.

In case you missed the inaugural issue, each Monday the FI2020 News Feed will bring you the big news in financial inclusion. We’ll pull from all over to spotlight great new stories, initiatives, videos, podcasts, and more.

Here are some of the pieces featured in this week’s issue:

  • Business Today’s recent article on account inactivity in India’s Jan Dhan Yojana scheme
  • The Microcredit Summit Campaign’s post on the Government of Ecuador committing to disability inclusion
  • The Wall Street Journal‘s announcement of finalists in the Asia-Pacific Financial Inclusion Challenge
  • Agencia de Noticias Andina’s article on an Indian financial inclusion delegation’s recent trip to Peru

To read the second issue, click here, and make sure to subscribe 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 us at ezuehlke@accion.org.

> Posted by Center Staff

Blog posts. Twitter feeds. Facebook updates. Email listservs. Google Alerts. Lunchtime conversations… We all have our ways, however handy and effective, of trying to stay abreast of what’s happening around the world. For those interested in financial inclusion, this is quite the challenge. The release of new products, partnerships, publications, and policies is a constant. But at CFI’s Financial Inclusion 2020 (FI2020) project, combing the world for the latest inclusion insights, trends, and developments is part of what we do. So, we decided to go one step further.

Starting today, each week the FI2020 team will bring you the big news in financial inclusion in an online magazine, the Financial Inclusion 2020 News Feed. We’ll pull from all over to spotlight great new stories, initiatives, videos, podcasts, and more. To give you a sense, the collection of pieces that make up this week’s edition touch on:

  • JPMorgan Chase & Co.’s new report on U.S. households’ financial resilience, Weathering Volatility
  • AllAfrica’s recent article on the new partnership between Tigo and Juntos in Tanzania
  • The Guardian’s interactive post that visualizes borrowing trends globally
  • A World Bank video on assessing if microloans really make a difference

To check out the first edition, click here, and make sure to subscribe 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 us at ezuehlke@accion.org.

> Posted by Center Staff

Can the world achieve full financial inclusion by 2020? By the Numbers: Benchmarking Progress Toward Financial Inclusion, a new Financial Inclusion 2020 (FI2020) publication from CFI, offers a quantitative review of financial inclusion globally, using publicly available data to examine recent progress and projecting a scenario out to 2020.

Last month the development community emitted a collective cheer as the new Global Findex data revealed that the number of unbanked individuals around the world dropped from 2.5 billion to 2 billion between 2011 and 2014. This looks like huge progress. If the trends continue, the financial exclusion gap will close to 1 billion individuals without access to formal financial services by 2020.

However, know it’s not all about access. We promote financial inclusion to enable people to use financial services to better manage their lives. A fully included person is an active user of quality financial services that bring significant value. Expanding financial access is the first step towards financial inclusion, and it needs to be followed by an uptick in the frequency and ways in which people use services as well as strengthening of the financial ecosystem. By the Numbers explores progress in these areas along with access and estimates the potential for reaching full inclusion by 2020.

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> Posted by Center Staff

This edition of top picks features posts highlighting India’s financial inclusion progress and persisting gaps, how the deployment of digital financial systems requires strategic human capital management, and the state of the mobile money industry in Latin America and the Caribbean.

The proportion of adults in India with a bank account increased from 35 to 53 percent between 2011 and 2014, according to the recently-released Global Findex data. A new post on the IFMR LEAD blog shares the Findex findings for India, and outlines the ways in which financial inclusion in the country is still far from achieved. The post affirms that account ownership is just the first step towards inclusion, discussing account usage, gender disparity, and uptake of mobile services, among other topics.

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> 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 erhyne@accion.org.

Technology-related topics

  1. 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?
  1. 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?

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> 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.

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> Posted by Leora Klapper, Lead Economist, Development Research Group, the World Bank

Eroll Asuncion runs a grocery store on the remote Philippine island of Rapu-Rapu. It’s a three-hour boat ride to the nearest bank. Fortunately, that’s no longer a problem – thanks to the mobile phone revolution and new regulations that make it easier for people to open and use an account.

Eroll’s customers now pay bills and send and receive remittances through a mobile money account they access via mobile phones. Eroll’s SuperStore has become something of a bank for islanders using these mobile accounts, allowing them to send and receive cash at the store.

“My husband sends (me) money twice a month, on the 15th and 30th,” Yolanda, a customer, explains.

Hundreds of millions of others like Yolanda are opening new accounts through their phone or at a bank or similar institution. It’s part of a financial revolution that’s sweeping the developing world. Since 2011, 245 million more people in East Asia and the Pacific have become part of the formal financial system by opening an account.

The World Bank has just released our much-anticipated second edition of the Global Findex, the world’s only comprehensive gauge of global progress on “financial inclusion”—how people save, borrow, make payments, and manage risk. The data give us insight into account ownership around the world, and how people are using – or not using – those accounts.

The Global Findex offers good news. As of 2014, 62 percent of adults around the world had access to a bank account. Put another way, the number of people who are “unbanked” has tumbled to 2.0 billion from 2.5 billion in 2011, when the Global Findex was first released.

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> Posted by Sonja Kelly, Fellow, CFI

In 2013, Elisabeth Rhyne was asked what she was particularly excited about as she looked forward to the future of financial inclusion. Her response? “A second data point.”

Well, now we have that second data point. The 2014 Global Findex reports that 62 percent of people in the world have a bank or mobile money account, up from 51 percent in 2011, and those two points describe a line. Simply projecting that line forward takes the world to about 83 percent of people with accounts by the year 2020. But of course, that’s not the whole story…

The Global Findex encouragingly articulates some concrete steps that governments and providers can take to accelerate progress toward financial access. I would venture to guess that these steps would bridge the gap between the projected 83 percent and the full 100 percent by 2020 (you can read about the World Bank’s goal of universal access by 2020 here).

So let’s just assume that universal access will be a reality by 2020. We can envision a world in the near future where people receive wages, government payments, and remittances into their bank accounts. Businesses spend less on payroll and have fewer risks than if they paid out in cash. Governments avoid corruption associated with social benefit payments by having a cheaper G2P system that entails fewer human intermediaries. Remittances are cheap—or even free—and go directly into the recipient’s bank account. Cause for celebration, right?

Well, yes, but not so fast.

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Financial Inclusion 2020 News Feed

In an effort to become the first stop for people interested in all matters regarding financial inclusion, each week the FI2020 team at CFI highlights compelling stories and content from across the web. Click here to visit the news feed.

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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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