The Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion explores the practices of investors in inclusive finance. Across areas including risk, governance, stakeholder alignment, and fund management, this blog series highlights what’s being done to help the industry better utilize private capital to develop financial institutions that incorporate social aims.

You may have caught Philip Brown’s blog post last month on how MFI boards can be explicit about risk strategy and appetite. Philip’s post was one of 10 responses collected for the publication, in which industry experts each candidly responded to one tough risk question that every board member should be asking, and be able to answer. The publication, Ten Risk Questions for Every MFI Board, was officially released today.

Through the publication, we set out to cover topics such as over-indebtedness, risk management measures, fraud, “newer” risks, and lack of communication, offering insight on some of the most difficult risk issues that board members face. Ten Risk Questions for Every MFI Board provides concrete warning signs and strategies for effectively managing or avoiding specific risks. We hope this resource will empower board members to speak up when they are uncomfortable about a move the MFI is making, or when they think an early warning sign of a larger problem may be present.

The publication is part of the Center’s Running with Risk project, which seeks to raise awareness about and enable effective risk governance for the institutional growth and sustainability of MFIs. Running with Risk is creating a common framework and language around risk so both the MFI’s management and board of directors better understand the potential of their roles, and can more adequately anticipate and manage risks. In Ten Risk Questions for Every MFI Board, the various experts discuss the importance of boards in determining and assessing how much risk is acceptable for the MFI and taking responsibility in leading the institution to ensure that the proper policies, procedures, and people are in place.

Ten Risk Questions for Every MFI Board is available for download on the CFI website. Along with Philip Brown, the publication includes responses from risk experts Lynn Exton, Karla Brom, Alex Silva, Liliana Botero, Daniel Rozas, Petronella Chigara-Dhitima, Stephan Hartenstein, Andrés Calderon, and Christian Ruehmer.

Have you read?

How Can MFI Boards Be Explicit about Risk Strategy and Appetite

A Core Reference Tool Updated: CMEF’s Governance Guidelines

Banana Skins 2012: Overindebtedness Tops the Risk Charts

The Financial Inclusion 2020 project 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.”

As an avid advocate of financial inclusion, I am deeply saddened by the fact that several hundred years after the first bank opened, 50 percent of the global adult population still lacks access to formal financial services.

The good news is that this may not be the case any longer. So I eagerly read the recent paper from Elisabeth Rhyne and Sonja Kelly from the Center for Financial Inclusion at Accion that talks about how growing incomes could lead to growing inclusion. I am glad that the authors have brought this phenomenon to the forefront.

I agree that rising incomes could be a key catalyst for elevating financial inclusion globally. I have experienced firsthand the tectonic shift in the income profiles and demand for financial services in India reflected in data from the United Nations Statistics Division. It shows that the percent of the population below the poverty line in India has dropped from 45 percent in 1994 to less than 30 percent in 2010.

Source: United Nations Statistics Division, 2013.

Alongside poverty decreasing in India, on average, everyone is sharing in India’s successful economic rise. Those at the bottom of the pyramid—the first and second quintiles—have doubled their GDP per capita between 2000 and 2010, and we expect to see a similar twofold increase over this decade.

Source: World Economic Outlook, 2012; Kelly and Rhyne, 2013; UN-WIDER global income inequality database, as visualized on the Mapping the Invisible Market website.

To illustrate that point, today every second person in India has a cell phone, while in the mid-1990s only a few people had access to phones at all (landlines). And while getting a job out of college in the mid-1990s was primarily a privilege of the graduates from top-tier engineering and management schools, now it is common to see graduates with multiple job offers from a broad spectrum of educational fields and institutions. This trend is also reshaping the demand for financial services. The stakes are getting too high for the Indian people to depend on informal financial services, and they now need the security of formal services. And the dream of every Indian today is to send their kids to school and participate in the county’s prosperity; they are trying to do their share by earning more, they just need help from financial institutions and regulators to create the right products for them.

Rising income is definitely a catalyst for elevating financial inclusion globally. However, as Elisabeth and Sonja point out, a proactive focus and a systematic approach from regulators, financial institutions, and other key stakeholders will be required.

One such approach is using basic electronic payments, like bill payment, as an on-ramp to financial inclusion that I outline in my paper A New Perspective on Bill Payment – A Demand-Based Path to Financial Inclusion. There can be no doubt that action needs to be taken and the Financial Inclusion 2020 initiative being led by the Center for Financial Inclusion at Accion and sponsored by several global companies including MasterCard is a great step in the right direction.

For more information on Financial Inclusion 2020, and to explore becoming roadmap contributors or reviewers, sign up for campaign updates.

Amit Jain is part of the Global Payments Strategy Knowledge Center in MasterCard Advisors. The Payments Strategy team works with MasterCard clients around the world to develop and implement successful strategies across their payments businesses. Mr. Jain is a seasoned professional with nearly 15 years experience in the industry including financial services, management consulting, venture capital and technology. A key focus of Mr. Jain’s career has been to work with senior executives on key strategic issues affecting their business.

Have you read?

FI2020/MasterCard Webcast: Growing Income, Growing Inclusion

Mapping Financial Inclusion in India

Matching Client Needs With Products: Observations from India

Bindu and Amit co-edited the recently published book Financial Engineering for Low-Income Households. An edited compilation of articles, the book focuses on using financial engineering to design financial services for low-income households. A Q&A with Bindu and Amit follows. 

For someone unfamiliar with the field, how would you describe financial engineering, and to what extent do you see financial engineering being applied by retail providers serving low-income households today?

In the Foreword to the book, Dr. Nachiket Mor, a mentor to us at IFMR Trust, observes that the retail finance industry the world over has gone in the direction of standardized products and transferring the burden of decision-making away from bankers and to the consumer. This is also true of providers serving low-income households. This, we think, misses the power of finance. The motivation of this book is to systematically compile principles from finance and economics theory and apply them to the context of design and delivery of financial services for low-income households. We use the term financial engineering in this context.

Do you think that this framework addresses any misapprehensions, gaps, or problems in the way that financial products are currently designed for low-income households?

I think it is safe to say that there is negligible design today – largely because so much of the energy and focus has been on sheer distribution. Just getting a small loan delivered in a remote context is hard enough, leave alone worrying about whether the loan is structured well to suit the customer. This book lays out an approach for a new generation of providers, who are concerned about distributing well-designed products to meet client needs, not just any product.

One of the goals of your book is to provide an understanding of the risk-reward trade-offs facing low-income households. In your experience, what is the most widespread risk barrier, perceived or actual, preventing greater financial services adoption in India?

I think one of the big challenges that we worry a lot about is that so much of the portfolio of low-income households is dominated by physical assets (land, house, and livestock). These are typically low return, high risk, and highly correlated with their human capital. The opportunities to do better than that are therefore infinite.

How can we shift this particular risk-reward trade-off in favor of financial services? What area of financial services design and delivery presents the biggest opportunity for improvement?

The biggest opportunity is in going away from standardized products delivered “over the counter” to customized delivery. It is indeed possible to do this at scale through effective human and software interactions. Financial engineering is essential to this customization. In theory, each person can have a uniquely designed portfolio of financial services that reflect her growth and risk management needs. Financial engineering provides us the algorithms/rules for this customization.

Does financial capability play into financial engineering product design or marketing? Some studies have shown that even extremely well-designed products can have very low adoption among low-income households if they don’t understand the features of the products or the intended benefits. 

Agreed, this is where the role of the provider is so crucial. In Chapter 1, we argue that instead of passing the buck to the client in the name of literacy and capability, there must be a greater onus on the provider to assess and provide suitable financial services. In fact, we wrote the book keeping in mind the staff of financial institutions like cooperative banks, microfinance institutions, rural banks. If staff in these institutions understand these ideas better, they can impact adoption rates among clients.

As you are at the helm of KGFS, a growing rural financial services company, you have had the chance to apply financial engineering first-hand. Can you talk more about what that has been like and any particularly successful products? 

It has been amazing to execute this first-hand at KGFS jointly with my talented colleagues over the last five years. We did two things in particular that helped. One, we created a specialist team that is very highly trained in product design, drawing on both financial engineering as well as client understanding. Second, we developed an operating model where the front-line salesperson is incentivized to acquire an in-depth understanding of the customer profile and provide the financial services that are suitable to them. The KGFS branch is not rewarded on the basis of product sale in-aggregate, but on suitable sale. This reinforces the concept on a daily basis. One of our biggest successes has been in insurance. Linking insurance sale to human capital values and premium linked to age of the customer has enabled us to have much better success than a standardized insurance sale approach.

What up-and-coming financial services innovations are you most excited about at KGFS or market-wide?

We are making a big shift at KGFS from product-based credit under-writing to household-based credit under-writing. Instead of relying on collateral like gold or group guarantees to decide credit eligibility, a new process that we are testing will underwrite the household on first principles and then take collateral as a deterrent against strategic default. This is an important innovation and will allow us to make sure that clients can exploit growth opportunities much better without getting stymied by product-specific criteria. For example, if a client wants a loan for higher education of his daughter and has enough cash-flows to support the same, we can provide the same with recourse to collateral of some type (house, shop, land) without having to call it or structure it as an “education loan.”

Bindu Ananth has been the President of IFMR Trust since January 2008. Prior to this, she worked in ICICI Bank’s microfinance team between 2001 and 2005 and was Head of the new product development team within the Rural Banking Group in 2007. Bindu Ananth has an undergraduate degree in Economics from Madras University and Masters Degrees from the Institute of Rural Management (IRMA) and Harvard University’s John F. Kennedy School of Government. She is a Fellow of the Global Economic Society and a Member of the Technical Committee of CGAP. She is also a member of the FICCI Taskforce on Financial Inclusion.

Amit Shah has been with IFMR Rural Finance for 4 years to develop the theory and framework that enables the creation of an optimal financial plan. Previously he worked with HDFC Bank after getting his MBA at the Institute of Rural Management Anand.

Have you read?

An Excellent Resource on Client Protection: IFMR Trust’s Blog Series

Behavioral Insights to Advance Financial Inclusion

Indian Microfinance Leaders Talk About Poverty

The Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion explores the practices of investors in inclusive finance. Across areas including risk, governance, stakeholder alignment, and fund management, this blog series highlights what’s being done to help the industry better utilize private capital to develop financial institutions that incorporate social aims.

When you hear the word “democracy,” you probably think of equality, elected representatives, voting rights, and so on. You probably also think of specific contexts. In the United States, for example, many of its citizens pride themselves on living in a democratic country. But what about democracy in business? Or more specifically, democracy in microfinance institutions (MFIs)? Should democracy extend to the decision-making in their governing boardrooms?

Although good governance has become a top priority for microfinance investors, donors, and regulators worldwide (CGAP’s Microfinance Gateway lists it as a Hot Topic), the structures of boardrooms and views on governance vary from institution to institution, country to country, and continent to continent. None of these structures, however, seem to be “democratic” in the way we define the word – representative of all parties involved. For example, as we covered in a previous blog post, the Anglo-American model of governance empowers CEOs to also serve as chair of their corporate board, which can result in management dominance of decision-making.

At the CMEF’s most recent meeting in April in Lima, Peru, a portion of the discussion was dedicated to asking why the client voice is not heard in the boardroom. Although it was generally agreed that financial institutions should strive to incorporate clients at the governance level in some way, the response on “how” varied greatly.

FINCA, for example, advocated for and currently uses market research through client surveys, focus groups, and social audit committees that ensure that the client voice is being considered in decision-making. Another suggestion was establishing mechanisms for receiving and integrating client feedback. Not all CMEF members agreed with these suggestions, however, and asserted that the methods for incorporating the client voice should be determined by each organization.

Financial Inclusion 2020’s Addressing Customer Needs Working Group’s suggestions of conducting quarterly client panels or including client representatives on boards were also considered. One concern expressed was that if a client did serve on a board, it would be difficult to choose one client that would best represent a large and diverse group of clients. Note that this discussion was framed with the assumption that MFI boards would be the ones selecting the client representatives.

But what if client representatives were selected, not by the board or the management, but by other clients? Wouldn’t it be more representative of the client voice if the clients could elect their own representative? Clients are major stakeholders of their MFIs, so shouldn’t they have the right to vote for someone who best represents their voice at the governance level? In the same way that union leadership is elected democratically, clients should be afforded the same due process. As the United Service Workers Union (USWU) explains, unions give individual workers a voice in decisions and events that directly affect their work, and give the individuals a say in changing and negotiating workplace conditions and solving workplace problems.

Clients are integral stakeholders in MFIs, and whether it is done through an elected representative, a market research function, quarterly client panels, or a social audit committee, their views should be represented in the boardroom. As is expected, the “how” will likely vary from institution to institution, but in order to reach a greater level of democracy in boardrooms, a way to include the client voice in every MFI must be found.

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Banana Skins 2012: Improving MFI Governance

On Tuesday, in conjunction with the release of our second FI2020 Mapping the Invisible Market report, Growing Income, Growing Inclusion: How Rising Incomes at the Base of the Pyramid Will Shape Financial Inclusion, we hosted a live, interactive webcast with MasterCard. The webcast explored the relationship between rising incomes and financial inclusion, including the opportunity for inclusion presented by the emergence of the “vulnerable class.” The session also spotlighted the Mapping the Invisible Market interactive data tools (available here and here), as well as MasterCard’s work in supporting financial inclusion globally.

Hosted by MasterCard’s Nicole Ward, the webcast’s presenters were CFI’s Sonja Kelly and Elisabeth Rhyne, and MasterCard’s Tara Nathan. Here’s a few of the points that were made during the discussion.

• Rising incomes, changing demographics, advances in technology, and government engagement are factors that are coming together to further financial inclusion
• Global GDP has been growing for the past 30 years, with a projected increase from $61 trillion in 2010 to $85 trillion in 2020
• From 2010 to 2020, the annual income of the bottom 40 percent in low and middle income economies is projected to double, from $3.1 trillion to $5.8 trillion
• In many populous countries, the BOP will move into the vulnerable class in this decade
• At the country level, there is a strong correlation between income and financial inclusion, both in account ownership and account use
• There are many possible on-ramps to financial inclusion, including bill pay, G2P payments, no-frills accounts, and mobile money transfer
• The transition from informal to formal financial services depends on many factors, including income level, income flow, employment formality, and social relationships
• Incorporating the vast influx of new clients requires scaling up client protection and financial education
• MasterCard is working with the government of Nigeria on a national ID program to provide a single proof of identity that also has the ability to deposit, receive, withdraw, and pay

For a video of the full webcast, click here. For the new Growing Income, Growing Inclusion report, click here.

Have you read?

Global Movement into the Vulnerable Class, and What it Means for Financial Inclusion

Adventurers, Unite: Voyaging Through Data in Our Mapping the Invisible Market Website

First Report from FI2020′s Mapping the Invisible Market Highlights Implications for Financial Inclusion as World’s Demography Changes

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 based on research from the Mapping the Invisible Market project published in the paper Growing Income, Growing Inclusion by Sonja E. Kelly and Elisabeth Rhyne. The paper was released today, and can be downloaded at mapping.financialinclusion2020.org/growing-income-growing-inclusion.

The World Bank, UN, and The Economist are all talking about it: growing income around the world. The UN’s goal to halve the number of people living in poverty by 2015 has already been achieved, and the media frequently spotlights growth in emerging markets contrasted with reports of malaise in the EU and US economies. In low and middle-income economies, it isn’t just the wealthy or the well-connected who benefit from this growth. Real incomes are rising among the poor, moving hundreds of millions of people from extreme levels of poverty into levels at which they begin to have more income flexibility.

Over the course of this decade, the bottom two quintiles in many of the world’s most populous countries will see movement into and even beyond the “vulnerable class,” defined as having an income of $4 to $10 per day.

In 2010, the bottom 40 percent of the populations, in low and middle-income economies constituted a market of $3 trillion. By the end of the decade, the real spending power of this market will nearly double, to $5.8 trillion.

Last year, the World Bank’s Global Findex reported that the number one reason that people did not have a bank account was that they did not have enough money. We also see a moderately strong statistical connection between income and account use in the bottom 40 percent.

With higher personal income, financial management will likely shift to more formal services as people gradually “outgrow” their informal mechanisms. The time it takes a person to make this shift depends on a number of factors, including the level, source, and volatility of an individual’s income as well as the availability of suitable services.

Understanding this transition is essential as policymakers and providers seek to prepare for it. If providers can offer appropriately tooled products, higher incomes at the base of the pyramid will translate into greater financial inclusion. If policymakers can encourage growth while safeguarding it, they will be able to anticipate challenges to client protection for customers using formal financial services for the first time.

Offering appropriately tooled products and anticipating client protection challenges, of course, are not limited to places that will see high growth over this decade. Much of Africa’s bottom 40 percent, for example, will continue to be under the $4 to $10 per day range, and in these places, creative application of technology and mission-driven organizations will play a key role in increasing financial inclusion.

For more on the connection between income and inclusion, head on over to the Mapping the Invisible Market website at mapping.financialinclusion2020.org.

For more information on Financial Inclusion 2020, and to explore becoming roadmap contributors or reviewers, sign up for campaign updates.

Figures’ source: Authors’ calculations based on World Economic Outlook and UNU-Wider database on inequality 

Have you read?

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First Report from FI2020′s Mapping the Invisible Market Highlights Implications for Financial Inclusion as World’s Demography Changes

Financial Inclusion and the World’s “Unbanked” Population

The World Economic Forum on East Asia was held last week in Myanmar. Following the country’s recent political and economic changes, the forum was Myanmar’s first international meeting that spanned leaders from industry, government, academia, and civil society. The three themes of this year’s gathering were Inspiring Inclusion Transformation, Realizing Regional Integration, and Scaling Regional Solutions for Global Resilience. A few of the forum’s sessions focused directly on financial inclusion. These included Moving from a Cash to a Banked Economy, and From Social Protection to Financial Inclusion. Video recordings of these, as well as all of the forum’s sessions, can be found here.

Myanmar today may be the nearest country in the world to a cash-only economy. Only 10 percent of the population has access to formal financial services, though if this year is any indication, changes to the country’s financial services and economic landscapes are coming, and rapidly.

This past September MasterCard became the first international payments network to issue a license to a Myanmar bank, enabling Co-Operative Bank Ltd. (one of the country’s largest banks) to offer MasterCard-branded cards to its customers. Since September, similar licenses have been issued to four more banks, and the ensuing five bank network of ATMs, currently totaling 140 facilities, now accept MasterCard payment cards. Beyond this new service opportunity for many of Myanmar’s banked, the development allows tourists and business travelers in the country to withdraw local currency using international MasterCard cards. 2012 was a record-breaking tourism year for Myanmar, as over one million visited the country. New point-of-sale merchant terminals for cashless payments are also in the works. With its first MasterCard terminal opening this past September, the payments company is working with in-country banks to roll out upwards of 500 terminals at restaurants, hotels, and other retail outlets by the end of the year.

These developments coincide with increasing country-wide economic growth. Myanmar’s GDP increased by 5.3 percent in 2010/11, by an estimated 5.5 percent 2011/12, and is projected to continue climbing to 6.25 percent in 2012/13.

Image credit: World Economic Forum

Have you read?

Financial Inclusion and the World’s “Unbanked” Population

Measuring (and Missing) Financial Inclusion

First Report from FI2020′s Mapping the Invisible Market Highlights Implications for Financial Inclusion as World’s Demography Changes

Sergio Guzmán conducting a Smart Assessor’s Training in Budva, Montenegro

The month of May was filled with many exciting events for the Smart Campaign. Smart Campaign director, Isabelle Barrès traveled to Guatemala and Bosnia and Herzegovina for two Client Protection Certification events (please see our last blog post). Smart Campaign Lead Specialist, Sergio Guzmán also traveled to this corner of the world to conduct a Smart Assessor’s Training and to attend the 16^th Annual Microfinance Centre Conference in Budva, Montenegro. Although the Campaign is based in Washington, D.C., Campaign staff thrive on opportunities to engage in client protection efforts beyond the office.

It’s a good thing that Sergio does not have a fear of heights. With the amount of time that Sergio spends in the air each month, he might as well be Superman. The Smart Assessor’s Training in Budva brought together a diverse group of financial services experts including donors, investors, consultants, and CEOs of microfinance institutions (MFIs), among others in the Eastern Europe/Central Asia region. Even with the ranging backgrounds of these participants, Sergio notes that the evident common denominators are the enthusiasm to incorporate the Client Protection Principles (CPPs) into their work and a keen desire to improve their commitment to those they serve.

It is very exciting for the Campaign to generate interest among such a wide range of actors at events like the training in Budva. The Smart Campaign’s growing involvement in activities among participants from different backgrounds reflects client protection’s increasing foothold. This layered interest and further desire to cement client protection into business practices is a promising achievement for the movement.

In the discussion of adequate client care at the Microfinance Centre Conference, there was much interest in what Client Protection Certification entails and what it means for MFIs that gain the status. Since each institution has a unique history, style, structure, and mission, no one way to implement the Principles can be prescribed. The attendees of the training were examples of this. They all want to apply the CPPs in their businesses, but each institution works differently. Institutions won’t necessarily approach achievement of certification in the same way, but keeping clients at the forefront of their efforts should always serve as the guiding light.

Certification means being a client-centric institution in which all operations incorporate adequate standard of care based on the seven CPPs. It is important to keep the goal of certification in mind. As Sergio says, “Client protection certification is not an end in itself. The end goal is to treat clients responsibly.” Sergio noted no two institutions achieve certification in the same way, and that satisfying the 95 indicators to become certified is a selective process. This echoes Isabelle Barrès’ point from the client protection certification webinar series in April that it will take some MFIs time to reach the status, but it is most important that they be on the path (please follow the link to a recording of this webinar). Even though each institution needs to individually evaluate how it should achieve certification, it also means that institutions are not limited in how they can approach the best way for them to successfully treat clients using adequate standards of care. Some areas of their business may need to be improved, while others may not need to change a lot. The diversity among those who aim to treat their clients according to the Client Protection Principles only enriches the potential for the Smart Campaign’s future engagements on other stages somewhere in the world.

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A Refresher on Smart Assessments? Let’s Go to the Videotape!

How Smart Assessments and Client Protection Certifications Work Together Harmoniously

Smart Campaign Shaping the Landscape of Microfinance in Bosnia and Herzegovina

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.”

At the Pakistan Microfinance Network, we are always in search of more data on financial inclusion in Pakistan. So imagine my delight when I heard about the Country Profiles feature on the Center for Financial Inclusion’s Mapping the Invisible Market website that features data from the World Bank Global Findex among other sources. My exploration of the Pakistan country profile page gave me some new insights and raised a few questions for future research.

First, a very high proportion of the people who took loans (largely informal) in the past year in Pakistan took them to deal with health and emergencies. Seventeen percent of all adults in Pakistan borrowed in the past year for health and emergencies, while only about 10 percent of the people in other middle income economies did so, even though in Pakistan, people are less likely to take out loans overall.

Reasons for taking out a loan

This observation makes me wonder if there is a pent-up demand for insurance in Pakistan. For a country that has seen a number of major disasters in the last few years, no doubt there is a great need for insurance products in Pakistan to help prepare for emergencies.

When I looked further at who it was that was taking out these loans (again, both formal and informal) for health or emergencies, I noticed that they were disproportionately rural, or poor, or to have only completed primary school. These observations offer a picture of what vulnerability looks like in Pakistan, and where financial inclusion efforts might be targeted for maximum impact.

Looking specifically at formal financial services, I found that the percent of people who have an account at a formal financial institution in Pakistan is quite low—10 percent—compared to the rest of South Asia—33 percent. In both, the number one use of accounts is to receive wages. Unsurprisingly, in Pakistan, education and gender have a great impact on the use of accounts—25 percent of people whose education level is secondary school or higher have an account compared to only four percent of people who have just a primary school education. Seventeen percent of men have an account compared to three percent of women.

Individuals with an account at a formal financial institution

These observations are indicative of accounts being dependent in part on employment. In Pakistan, when someone has a job in the formal sector, it is often tied to a bank account through which to receive wages. Since education and gender in Pakistan are also tied to employment, it means that women and those in primary school are not as likely to have that convenient on-ramp to inclusion.

Having this data and being able to visualize it is a giant step toward understanding financial services use in Pakistan. While the Pakistan Microfinance Network has great data on microfinance organizations in Pakistan, there are particular questions that we are answering right now that are pushing us to look deeper. Since discovering this tool, we have been using it to build a baseline of our understanding of financial inclusion within Pakistan.

If you want to take your own tour and explore Pakistan further (or your own country), visit the Center for Financial Inclusion’s Mapping the Invisible Market website. If you want to know more about our work at the Pakistan Microfinance Network, visit us here.

For more information on Financial Inclusion 2020, and to explore becoming roadmap contributors or reviewers, sign up for campaign updates.

Charts’ data source: Global Financial Inclusion Index (Global Findex), World Bank 2012

Have you read?

Pakistan Microfinance Network Launches Client Protection

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Susilo Bambang Yudhoyono, Indonesian President and co-chair of the High Level Panel, and Ban Ki-moon, United Nations Secretary General

A few days ago the U.N. High Level Panel submitted its final report to the U.N. Secretary General on recommendations for the global development agenda to replace the current Millennium Development Goals (MDGs) when they expire in 2015. The High Level Panel, comprised of 27 individuals spanning leaders from civil society, private sector, and government, developed the recommendations in broad consultation with governments, organizations, institutions, United Nations entities, and individuals. People from more than 5,000 civil society organizations as well as roughly 250 CEOs of major corporations participated in the process.

The vision of the agenda, as stated in the report, is to end extreme poverty in all its forms in the context of sustainable development and to have in place the building blocks of sustained prosperity for all. The agenda is organized into five transformational shifts, and includes recommendations on establishing goals that translate these priorities into measurable targets and recommendations on effectively implementing the agenda. A list of the five transformational shifts follows.

• Leave No One Behind. We must ensure that no person – regardless of ethnicity, gender, geography, disability, race, or other status – is denied basic economic opportunities and human rights.

• Put Sustainable Development at the Core. We must make a rapid shift to sustainable patterns of production and consumption, with developed countries in the lead. We must act now to slow the alarming pace of climate change and environmental degradation, which pose unprecedented threats to humanity.

• Transform Economies for Jobs and Inclusive Growth. A profound economic transformation can end extreme poverty and promote sustainable development, improving livelihoods, by harnessing innovation, technology, and the potential of business. More diversified economies, with equal opportunities for all, can drive social inclusion, especially for young people, and foster respect for the environment.

• Build Peace and Effective, Open and Accountable Institutions for All. Freedom from violence, conflict, and oppression is essential to human existence, and the foundation for building peaceful and prosperous societies. We are calling for a fundamental shift – to recognize peace and good governance as a core element of wellbeing, not an optional extra.

• Forge a New Global Partnership. A new spirit of solidarity, cooperation, and mutual accountability must underpin the post-2015 agenda. This new partnership should be built on our shared humanity, and based on mutual respect and mutual benefit.

A few months ago we posed the question of how will financial inclusion be incorporated into the new development agenda. In looking at just the transformational shift blurbs above, one can draw linkages to core financial inclusion elements. More directly, the report explicitly mentions financial inclusion in two contexts – pertaining to women and girls having equal access to financial services, and strengthening a country’s productive capacity by providing universal access to financial services.

Take a look at the report and let us know if you think financial inclusion is appropriately incorporated into the development agenda. Or better yet, notify Secretary-General Ban Ki-moon. The report serves as an input in the process of consultations being conducted by the U.N. It’s expected that the Secretary-General will present his own development agenda vision to U.N. member states in September.

Image credit: Post2015HLP.org

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