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> Posted by Nate Gonzalez, Investment Officer, Accion Venture Lab
Last week this blog shared the news that Equity Bank applied for a mobile teleco operating license in Kenya, a development suggesting the bank’s interest in entering the country’s M-Pesa dominated mobile money market. In rapid succession, this weekend Kenya’s two largest telcos, Safaricom (who operates M-Pesa) and Airtel, announced that they are jointly buying-out yuMobile, the third-biggest telco in Kenya, and the most likely player to have partnered with Equity to enable it to enter the country’s telco-led mobile finance space.
> Posted by Siddhartha Chowdri, Program Manager, Disability Inclusion, India, CFI
While attending the recent Techshare disability inclusion conference in New Delhi I was invited to attend a “High-Level Meeting on Inclusive Financial Service.” This meeting aimed at starting an intensive national dialogue on the use of technology in making banks in India more accessible to persons with disabilities (PWDs). This unique summit was organized by G3ICT, the Indian Banks’ Association (IBA), Xavier’s Resource Centre for the Visually Challenged (XRCVC), IBM’s Human Ability and Accessibility division, and the Centre for Internet and Society in Mumbai.
Through the course of the afternoon many dignitaries shared their views and strategies on financial inclusion for PWDs. Senior leaders of the IBA (Mr. Mohan Tanksale) and the Reserve Bank of India (Ms. Sadana Verma and Mr. KC Anand) discussed the advances in regulation that have made banking more accessible to the blind and were extremely passionate about making the case to all financial institutions in the country that there is a legitimate business case for using available technologies to become more accessible.
After hearing the perspective of the banks and regulators the discussion turned to the technology providers. Mr. Nagesh Nayak of NCR gave us all a great lesson on how not to be accessible. NCR had the mandate to develop talking ATMs to enable visually impaired persons to access their accounts. He showed us a video that let us understand how the first talking ATMs did not actually improve access. For example, the ATM would ask the blind user to choose an option but then not say the options out loud. Then Mr. P. Ramachandran who flew in from IBM’s research headquarters in Austin, Texas explained how IBM’s Human Ability and Accessibility group is using technology to empower employees with various disabilities to make significant contributions to their business. If the likes of NCR and IBM can be so proactive in promoting accessibility and provide tools and case studies, then hopefully the financial service providers of the world will not be too far behind.
> Posted by Jeffrey Riecke, Communications Associate, CFI
On Thursday NASA and the Japan Aerospace Exploration Agency launched a new weather and climate satellite that generates a near-global view of precipitation, closing previous large observation gaps. This development has the potential to inform an array of important weather-related activities, including weather index insurance.
The satellite, known as the Global Precipitation Measurement (GPM) satellite, uses a radiometer and dual-frequency radar to measure the presence and even the intensity of rain, snow, and ice, to a time window of three hours, across a geographic range of 65 degrees north to 65 degrees south latitude. Data generated by the satellite will be publicly available to anyone around the world.
NASA’s predecessor satellite was only able to detect rain, and not to varying intensities. It also covered a more limited geographic area of 35 degrees north to 35 degrees south. The new NASA satellite could prove an invaluable resource for weather-related initiatives like disaster response and relief.
Weather index insurance is well-positioned to benefit from the newly detailed precipitation data. Weather index insurance offers a payout to farmers in the event of extreme weather, such as drought or a hurricane. The financial support helps farmers sustain their families while their source of livelihood, their land, recovers. This safeguard also makes it less risky to take out loans to invest in the productivity of land. The payout is triggered by weather index readings that register as extreme weather. This mechanism yields low transaction costs – a necessity as it rarely is practical for insurance agents to travel to smallholder farmers and verify the weather and land conditions.
> Posted by Center Staff
This edition of Top Picks features posts highlighting trends in identification technology and mobile money, as well as a post on new mobile money research targeting user-centered services design.
Innovations in identification technology, namely biometric identification, are discussed in a new Center for Global Development Blog post. The author indicates that key identification areas worth following are remote authentication, the identification of children, standardization and interoperability, and privacy. The post is framed in the context of identification conferences and events, whose content reflects the diversity of identification technology applications, such as in financial services.
There were 219 mobile money services across 84 countries at the end of 2013, with the number of active accounts growing from 37 million in June 2012 to 60 million in June 2013. Those are a few of the main findings from GSMA’s new MMU State of the Industry Report on Mobile Financial Services for the Unbanked. A new MMU Blog post highlights the report and its key insights. Expanding on MMU State of the Industry reports of previous years, this year’s report covers the new areas of mobile insurance, mobile credit, and mobile savings services.
> Posted by Center Staff
Equity Bank, Kenya’s largest bank by customer base, has applied for a license to operate a mobile telco business, a move that strongly suggests intent to enter the mobile money space. If realized, the bank and its 8 million customers could significantly disrupt M-Pesa’s current domination of the country’s market and help drive competition and innovation.
Given the type of license being sought, Equity Bank would not build a new telecommunications network, but would instead partner with one of the country’s prominent telcos and deploy services using this partner’s infrastructure.
Safaricom’s M-Pesa currently has a commanding hold on mobile money in Kenya with 21 million subscribers, covering roughly 75 percent of the country’s adult population. If Equity Bank’s customers were to subscribe to the in-house mobile money service in question, it would be positioned as the second largest in the country.
We look forward to the decision on Equity’s license and the action to follow.
Image credit: GSMA
> Posted by Richard Leftley, Chief Executive Officer, MicroEnsure
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. This blog series spotlights financial inclusion efforts around the globe, shares insights from the FI2020 consultative process and highlights findings from “Mapping the Invisible Market.”
Last year a statistic was released claiming that there are 6 billion phones in circulation around the world. It is clear that mobile-based delivery channels are perhaps one of the greatest opportunities in working to achieve human and market development goals, including financial inclusion.
Microinsurance is one of the great beneficiaries of mobile-based payments and service delivery innovations, as shown by the rapid growth of mobile microinsurance (MMI) products from an estimated 20 in 2006 to 84 in 2013. Today much of the growth in microinsurance is through partnerships with mobile network operators that are keen to increase sales and retain customers. But demand side obstacles persist and pose a significant challenge to growth and sustainability. Many products are available that are sound and beneficial, but clients are not picking them up. Why is that?
Over the past nine years we have provided microinsurance to millions of clients via a range of distribution channels including banks and microfinance institutions, SACCOs, cooperatives, and even churches. However, our real breakthrough came when we realized that no one wakes up wanting to buy insurance, but people do wake up worried about the risks they face. Through our work with mobile network operators, we have demonstrated that the mass market will radically change their consumer behavior in return for free insurance that addresses their risk.
Recently I stopped a man in the street and asked him if he wanted to buy life insurance. However hard I tried I could not make the sale, but when I asked him how much money he sent home to his mother every month, he became excited about a product that would keep providing that remittance to his mother if he had an accident and died.
Our ability to provide great microinsurance products is driven by our capacity to consider the needs and attitudes of our clients and then integrate these types of insights about choice and value into each product.
> Posted by Jeffrey Riecke, Communications Associate, CFI
Corporate social responsibility or profitability? Why are more and more financial services providers expanding their focus to include banking the unbanked? After all, many of those without formal financial services don’t have incomes to support big or frequently-used products, and their circumstances often present challenges for access, risk, and other services dimensions.
Industry activity in recent years, organizational objectives aside, has demonstrated the potential for sustainable and profitable investment in financial inclusion. Advancements in product design, technology, and risk management, and trends in demographics and incomes are making it increasingly possible for commercial financial services providers, as well as stakeholders in adjacent industries like telcos and technology providers, to support inclusion.
In the following video, global leaders discuss how financial inclusion is not only good for individuals, markets, and countries, but also good business.
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
This post is the second in a series of two posts from Pina on financial inclusion for persons with disabilities. Pina’s first post can be found here.
A study by the Martin Prosperity Institute in Canada estimates the buying power influenced by persons with disabilities (PWDs) is in excess of $US 26 billion in Canada. The same market is estimated to exceed $1 trillion in the United States by 2021. It is clear that PWDs represent a significant market in North America, but I believe they hold similar if not equal potential around the world. The World Health Organization estimates that 15 percent of the world’s population, over 1 billion people worldwide, live with a disability. This number is largely concentrated in developing economies, and is projected to increase considerably as the global population ages – a trend that has been highlighted in CFI’s demographic research. Engaging PWDs is essential when developing policies, standards, or products, or when selecting technologies for providing access to financial services. Otherwise, we risk excluding a population that can be viable consumers of financial products. Most importantly, culture needs to be shifted to embrace and recognize that PWDs have the ability to positively impact economic prosperity and that, along with the rest of society, must have equal access to education, employment, and financial independence.
How can financial services providers make a difference? It’s not rocket science. From including PWDs in the development of products and services, to the selection of technologies that are accessible to PWDs, financial services providers have a diversity of options for taking action and resources for understanding how to do so.
Engaging PWDs in Product Development
Financial services providers would not develop a product without getting input from their consumers. So why not include PWDs in the research conducted for product development or improvement? In Britain, Lloyds Banking Group convened a cross financial services sector focus group comprised of over 25 customer facing organizations and industry/regulatory bodies to discuss how to better respond to the needs of their customers suffering from dementia. After surveying caretakers and consumers, the consensus of the focus group, which included Business Disability Forum Partners: Allianz; Barclays; RBS; Santander; and Members: Aviva; HSBC; Legal and General; and Zurich, resulted in the creation of a charter on dementia-friendly financial services. This charter is intended to help financial services institutions recognize, understand, and respond to the needs of customers living with dementia and their caretakers and is an example of an institution that identified an obstacle in access by current and potential clients, conducted research within that client segment, and found a way to address it.
> Posted by Fernando Botelho, Founder, F123 Consulting
Microfinance institutions (MFIs) may not be aware of tools and resources at their disposal that can make it easier for them to work with persons with disabilities (PWDs) as clients or staff. A new tool launched a few weeks ago attempts to close this gap, “Inclusion of Persons with Disabilities in Microfinance through Organizational Learning and the Strategic Use of Low-Cost Technologies.” This tool is part of the Framework for Disability Inclusion toolkit produced by CFI through work with Fundación Paraguaya and others.
The new tool provides concrete guidance for selecting appropriate technologies, forming partnerships with disability-related organizations, and incorporating disability inclusion throughout an organization. It was developed by myself and my organization, F123 Consulting, inspired by our work with the staff of Fundación Paraguaya, to make their organization more disability inclusive.
For example, free and open source assistive technologies can be used by organizations that have an interest in ensuring that operational and financial viability are maintained. In that regard, it’s important to take advantage of the many available low-cost, high performing technologies, and to adapt instead of replace existing processes whenever possible. Managers don’t have to roll their eyes and fret about cost. Small modifications to already existing systems can often make MFIs accessible to staff and clients with disabilities. And the best part is that some of these modifications are free!
> Posted by Adam Brown, International Development Discourse Group (IDDG) Member
The following post was originally published on the IDDG Blog.
Since 2008, the Afghan mobile phone provider, Roshan, has worked to bring mobile money services to Afghanistan. With the support of USAID, all four of Afghanistan’s major mobile phone providers are currently developing mobile money capabilities. The highly successful rollout of Kenya’s mobile money and banking service, M-Pesa, has spurred a flurry of similar startup efforts – over 72 in 42 countries. Many countries, however, have failed to experience the kind of success that M-Pesa achieved, and Afghanistan is no exception.
While the mobile money program in Afghanistan is in its nascent stages, the factors that helped M-Pesa to succeed are generally lacking. The most important of these are, 1) a dominant mobile carrier; 2) an economy that depends on long distance money transfers; and 3) customer trust in the system. The Afghan mobile phone market is too divided to create the kind of widespread network required to attain the critical mass necessary for a sustainable customer base. Further complicating the issue is the fact that Afghans generally do not rely on remittances, limiting the utility that could draw future users. To fix that, mobile money providers should include banking mechanisms early in their programs instead of tacked on only once a money transfer system is in place. However, trust in banks, especially since the Kabul Bank scandal, may be too low for Afghans to put their money into another bank-like mechanism. While mobile money is not destined to fail in Afghanistan, proponents of mobile banking and USAID should adjust their expectations for success, or at least be ready to address the above issues.