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> Posted by Barney de Jongh, Acting Group Head of MFS, Ooredoo Group

It’s amusing to see that whenever we take a new mobile money service to market the same old sales mistake is made over and over again. The only difference is the local lingo in which it has been conveyed.

So if you were in a duka in 2010 in Kigamboni, Dar es Salaam, close to the ferry, or if you were in a farmasi in 2014 in Sukabumi, West Java, close to a busy market, chances are you would have heard mobile money sales people tell the same narrative to shop owners. “This new service called mobile money will soon be printing you money. All you have to do is a few registrations, a few cash-ins and a few cash-outs. Now see, for month one, you already have Tsh 100k / IDR 700k (US$ 50) in your pocket. By month six it will be US$ 300 equivalent and by month 12 easily US$ 600 equivalent. Look at your airtime sales results. Look at all the customers outside your shops. This will be a piece of cake. We will train you, we will even give you the equipment, a log book, branding – and voila, you are in business.”

Do our beaverish sales agents stop to do a 360 degree look (ok more like a 270 degree look) around the store? Does the trained eye look at not only the content of the stock on the shelves, but also at the total estimated value of the stock? Does it glance up to see the slow moving items at the top of the shelves? Before even speaking to the owner, does the sales agent do a calculation to see if the total estimated value of the stock even puts the shop owner in a position to have the minimum investment for upfront e-money purchase? What about minimum liquidity levels? Does the shop even have fast enough rotating stock?

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> Posted by David Tuesta, BBVA, and Sonja E. Kelly, CFI

A Spanish-language version of this post follows the English-language version.

YOU are a beneficiary of data. The materials in those shoes you are wearing were chosen over other materials because of data on cost, durability, and consumer opinion. When you go to the supermarket, you can easily find the chocolate bars because data told company marketers that if the chocolate bars are at the front of the store, consumers will be more likely to buy them. When you use public transportation, the fare you pay is based on data on the cost of the system and estimates of how many riders there will be.

Some people think data is boring. For those people, we say “tough luck.” Data is inevitable. Data provides the information on which economic decisions are based. More data provides more knowledge, information and transparency, helping all economic agents make better decisions, and through this, increasing society`s welfare.

It is no wonder, therefore, that data is critical for financial inclusion, as the financial services industry expands its focus toward harder to reach and lower income populations. The data we have on consumers helps to better understand how quickly financial inclusion is catching on and to tool financial services products appropriately to different market segments. Data at higher levels helps too: information about financial services providers is essential for regulators to monitor the market. Data matters, and it will shape the path of financial inclusion.

Last month at the invitation and of the Inter-American Development Bank we met at the IDB’s Washington, D.C. headquarters with a group of people from many institutions across the financial services industry from large international organizations to small research institutions to global banks to take stock of what data is out there, how much information could be available, how it can best be used, and how data efforts can be improved. There have been strong efforts to improve data from the demand side (customers), such as the Global Findex. Despite many data collection initiatives on the supply side (providers), there are still gaps that could be important for improving and evaluating convenience and
accessibility of potential financial services for those who are unbanked.
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> Posted by Jeffrey Riecke, Senior Communications Associate, CFI

The Helix Institute of Digital Finance recently launched the Kenya Country Report 2014 as part of their Agent Network Accelerator (ANA) project. The ANA project is aimed at increasing global understanding of how to build and manage sustainable digital financial services (DFS) networks by conducting large-scale research among DFS agents and issuing training to providers and other stakeholders. In this two-part interview, Dorieke Kuijpers, Research Project Manager at the Helix Institute and co-author of the report, provides insight into the ANA project and the Kenya Country Report. The following is part two. Part one can be found here.

One of the big findings of the survey is that banks’ agents now account for 15 percent of the agent banking market in Kenya – a threefold increase over last year. What are some of the other key developments in the market?

We have identified a number of market developments by comparing the Kenya 2014 survey findings with those of the Kenya 2013 survey. Mobile network operators (MNOs) have led the success in the digital financial services industry in Kenya and historically have been considered better in marketing and distribution than banks, which is not surprising given that many MNOs in East Africa have more clients than banks do. Nearly a decade of development later, we see this changing: banks are now making large investments in the DFS business and they are approaching it in a very different way.

An interesting finding is that although we observe a significant increase in the market presence of bank agents, the products and services they offer are in many ways additive as opposed to competing with those of MNO agents. While MNO agents are still conducting a higher number of transactions (almost twice as many as bank agents), bank agents are offering a greater and more sophisticated array of services, including bill payments, savings, and credits. Also, the median amount transacted among bank agents is roughly 50 percent higher, which means their revenue is now similar to that of MNO agents. This is reflected in the fact that out of the 32 percent of agents that report wanting to open a new till for another provider, the overwhelming majority of agents would like to join a bank’s network, with Equity Bank being the most popular option.

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> Posted by Jeffrey Riecke, Senior Communications Associate, CFI

The Helix Institute of Digital Finance recently launched the Kenya Country Report 2014 as part of their Agent Network Accelerator (ANA) project. The ANA project is aimed at increasing global understanding of how to build and manage sustainable digital financial services (DFS) networks by conducting large-scale research among DFS agents and issuing training to providers and other stakeholders. In this two-part interview, Dorieke Kuijpers, Research Project Manager at the Helix Institute and co-author of the report, provides insight into the ANA project and the Kenya Country Report. Part two will be published next week.

The new Kenya report focuses on the operational determinants of success in agent network management. By way of background, can you give an overview of these components and tell us about the scope of this survey?

The country report is based on 2,128 mobile money agent interviews carried out in 2014 across Kenya. For the survey, we partnered with Research Solutions Africa (RSA), a research firm that has vast experience working in several African countries. After undergoing an intensive training by MicroSave’s lead researchers, the team of enumerators recruited by RSA conducted the several-thousand interviews with mobile money agents spread throughout the country. The findings of the survey resulted in the Kenya 2014 Country Report as well as five (confidential) reports that present providers with an overview of provider-specific findings.

The questionnaire that we used focuses on five operational determinants of success in agent network management, or pillars, as we call them. Both our country reports and our provider reports are based on these pillars. The first pillar, agent and agency demographics, helps us develop an agent profile at the country level and covers indicators such as the age of an agency and the proportion of dedicated and exclusive agents. Core agency operations is the crux of the research as this pillar looks at the health of an agency—e.g. the products and services offered, the number of daily transactions, the types of transactions conducted, and the average value of transactions. Liquidity management looks at an agent’s liquidity practices and needs and how these affect their daily transaction levels. The pillar quality of provider support analyzes the extent to which service providers support their agents in terms of trainings and refresher trainings, monitoring visits, and availability of call centers. Lastly, business model viability assesses the financial strength of an agent.

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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 ezuehlke@accion.org.

> Posted by Center Staff

Hot off the press! We published the third issue of the Financial Inclusion 2020 News Feed, our new weekly online magazine on the big news in financial inclusion. What’s been happening in the world of banking the unbanked?

Among its stories, the new issue of the FI2020 News Feed spotlights the following:

  • The State Bank of Pakistan ordered all commercial banks in the country to create a new account category, Asaan Account, which targets the base of the pyramid by simplifying account opening requirements
  • Mybank, a new online bank in China, was launched by Ant Financial, utilizing transaction records on Alibaba to extend credit to individuals and small businesses
  • In Tanzania, agent and mobile phone-based banking continues to grow steadily in both the volume and value of transactions

For more details on these and other stories, read the third issue 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 Andrew Fixler, Freelance Journalist

Indian financial inclusion advocates enjoyed a brief victory lap and an international spotlight in January, and they are poised to move into 2015 with a renewed push. On January 20, Indian Finance Minister Arun Jaitley was presented with a Guinness World Record for the fastest financial inclusion roll-out in history, the Pradhan Mantri Jan Dhan Yojana (PMJDY). In one week, between 23 and 29 August 2014, 18,096,130 bank accounts were opened through this national inclusion strategy. Since that date the number has grown to over 123 million across the country. During his January 25 joint address with Prime Minister Modi, President Obama commended Indian leadership’s commitment to prioritize financial inclusion for all Indian citizens, and pledged American support.

In a January 27 press release, USAID affirmed Obama’s pledge, and announced its intention to partner with over 20 Indian, U.S., and international organizations with the support of the World Economic Forum (WEF) to work alongside the Indian government “to expand the ability of Indian consumers and businesses to participate in the formal economy.”

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> Posted by Elisabeth Rhyne, Managing Director, CFI

What are the most important unanswered questions in financial inclusion?

Last week I was fortunate to participate in the small, idea-packed Conference on Financial Inclusion at Harvard Business School, organized by Professor Rajiv Lal. The attendees were a high-level microcosm of the financial inclusion world, a sort of mini-Financial Inclusion 2020 Global Forum. A prime purpose of the gathering was to identify a potential research agenda.

Among the ideas emerging from very rich conversations, I identified three distinct areas of research: business questions that could be addressed through HBS’s famous case method; research focused on regulation; and social science research focused on consumers. Because what one says at HBS stays at HBS, I cannot identify who offered what idea, but here is a brief summary.

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> Posted by Anna Koblanck, Communications Officer, International Finance Corporation

The Sakombi neighborhood in Kinshasa, capital of the Democratic Republic of Congo, is not an area where traditional banks spend their marketing money. The people who live and work here are street hawkers and day laborers, low-income people in the informal economy who are generally considered risky and expensive customers by most financial institutions.

Microfinance institution FINCA thinks differently. It conducts regular sales drives in Sakombi and in similar neighborhoods across Kinshasa, offering new customers the chance to open a bank account with just a one dollar deposit. These marketing drives build on a network of agents that FINCA is rolling out with the help of mobile and biometric technology.

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> Posted by Jeffrey Riecke, Communications Assistant, CFI

If you regularly follow financial inclusion news, you probably come across articles on the financial inclusion progress of particular countries all the time. Just today I read headlines on the extent of inclusion in Bangladesh as compared to other South Asian countries, on the growing mass of mobile money subscribers in Kenya, and on life insurance penetration in India. Last week we added to the conversation with a post on Nigeria’s financial inclusion strategy. Keeping track of all these national developments is a challenge, even for those of us who have the opportunity to focus much of our attention on financial inclusion.

Earlier this month AFI released the National Financial Inclusion Strategy Timeline, a document that chronicles the steps AFI member institutions have taken in recent years to develop and implement national financial inclusion strategies in their countries – a resource any of us financial inclusion media junkies can embrace. Created by AFI’s Financial Inclusion Strategy Peer Learning Group (FISPLG), the timeline is organized by region and lists national-level developments for 28 countries from 2007 to the present. Here’s the Sub-Saharan Africa region section.

In looking at the timeline, a few trends quickly come to the surface. Not surprisingly, there’s been an increase in inclusion activity among central banks and financial regulatory institutions in the past few years. Specifically in 2013, a number of countries have drafted or implemented national strategies, including the Philippines, Thailand, Belarus, Turkey, Nepal, and Tanzania. Another trend expressed in the timeline is the rise of branchless banking, with many countries developing guidelines for agent and mobile banking.

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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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