You are currently browsing the tag archive for the ‘India’ tag.

> Posted by Ben Mandell, International Programs Manager, Water.orgAccess to safe drinking water and hygienic sanitation are true necessities for healthy families. Yet, access rates for water and sanitation remain stubbornly low in most low-income countries. The negative health implications can be dire and include diarrheal disease which can result in premature mortality and childhood malnutrition and stunting.  From an economic perspective, “The health consequences of poor sanitation are substantial and contribute to over US$50 billion in GDP loss annually,” according to a new India focused learning note jointly developed by and the World Bank Water and Sanitation Program (WSP).

In the learning note, and WSP, both active globally in working to expand access to water and sanitation, collaborate to share their research and findings on how household lending can help drive improved water and sanitation uptake as well as provide economic and social benefits to local financial organizations., through its WaterCredit program, provides capacity-building grants and technical assistance to create, pilot, and scale water and sanitation financing. Currently, WaterCredit provides funding to microfinance providers and NGOs to support the creation of programs and these partners then leverage funding from banks and capital markets to disburse loans to people in need. Accordingly, “ has provided US$11.3 million in subsidies to financial institutions and NGO partners worldwide, which in turn have disbursed over US$120 million in loans reaching 2.4 million people.”

Read the rest of this entry »

> Posted by Susy Cheston, Senior Advisor, CFI

Of the 700 million new accounts that the Global Findex reports were opened from 2011 to 2014:

  • Banks and other financial institutions accounted for 550 million;
  • Mobile network operators accounted for 100-240 million, depending on your source and methodology;
  • Microfinance institutions accounted for 50 million.

These numbers are rough and involve some overlap—but they point to the continued importance of commercial banks in financial inclusion. Put another way, of the 3.2 billion accounts reported in the 2014 Findex, 3.1 billion were accounts with a financial institution.

That’s why I was so interested in hearing what the commercial bankers had to say at an Institute of International Finance (IIF) roundtable held in Lima on October 9 alongside the International Monetary Fund (IMF) / World Bank meetings. The strategies they discussed for reaching the BoP were not new to those immersed in the financial inclusion world, but it was heartening to hear their commitment to putting those strategies into operation. Here are a few of the points from the discussion:

Use data to understand customers. Now more than ever, there is a wealth of available data to help us better understand customers at the base of the pyramid. These new customer insights are opening up new practices – from on-boarding, to cross-selling, to risk management. Data analytics can also enable cost reductions on credit and insurance. For example, ecommerce platforms for small manufacturers can facilitate credit offers and then arrange for automatic repayment from the ecommerce activity itself. This innovative use of data allows financing at half the cost.

Read the rest of this entry »

> Posted by Eric Zuehlke, Web and Communications Director, CFI

Accion MfB staff explaining the PLWD product to clients

Last month, Accion Microfinance Bank (MfB) in Nigeria launched the People Living With Disabilities (PLWD) product to provide loans to a marginalized group that has largely been left out of the financial system – people with disabilities (PWD). To mark the occasion, some of the first clients of these loans including a member of the albino community and visually impaired clients attended an opening ceremony, which also included officials from the Central Bank of Nigeria (CBN).

The PLWD launch was the result of close collaboration across organizations and continents. CFI’s Joshua Goldstein and Bunmi Lawson, Managing Director/CEO of Accion Microfinance Bank, met with officials from the Central Bank of Nigeria to garner their support. In addition, CFI’s PWD team in India, including CFI partner v-shesh, advised Accion Microfinance Bank.

At the launch, Bunmi Lawson stated that, “Many people living with disabilities are financially excluded. We are pleased to be able to give them the opportunity to improve their means of livelihood to give them a brighter future.”

I asked Emeka Uzowulu, Head of Business and Product Development at Accion Microfinance Bank in Nigeria to share how this product came about and what their future plans are for reaching PWD.

1. Congratulations on the launch of the PLWD product! Can you give a brief background on how this product came about? What was the history of developing this outreach to persons with disabilities and what was key to getting it off the ground?

At Accion Microfinance Bank, our mission is to economically empower micro-entrepreneurs and low income earners by providing financial services in a sustainable, ethical, and profitable manner. We realize that a sizable number of this group are living with one form of disability or another which limits or frustrates their efforts to be productive, as well as that of their families. In consideration of these challenges, we are committed to identifying and partnering with them in making their futures brighter by providing access to loans, savings, and insurance at a very minimal cost.

Read the rest of this entry »

> Posted by Larry Reed, Director, the Microcredit Summit Campaign, and Jesse Marsden, Research and Operations Manager, the Microcredit Summit Campaign

In collaboration with the CFI’s process to develop the Financial Inclusion 2020 Progress Report, the Microcredit Summit Campaign recently conducted interviews with microfinance leaders* around the world committed to reaching the most excluded. In this post, we share some of the insights from these conversations about how to ensure that the most invisible clients are financially included, directly drawn from the experiences of those who are doing it.

To set the stage, Luis Fernando Sanabria, General Manager of Fundación Paraguaya, made this central point: “Our clients need to be the protagonists of their own development stories. Our products should be the tools they use to meet their needs and empower their aspirations.” With that reminder of the purpose of financial inclusion, we begin the discussion by asking who are the most excluded.

In each country, people living in extreme poverty (below US$1.25 a day) make up the largest segment of those excluded from the financial system. We spoke with leaders from organizations that make intentional efforts to reach this large excluded market: Fundación Paraguaya; Pro Mujer; Fonkoze; Plan Paraguay; Equitas; Grama Vidiyal; and TMSS. These organizations not only address poverty, but also a host of other dimensions that lead to exclusion, including literacy, race, gender, physical disabilities, and age. Less frequently-discussed reasons for exclusion include sexual orientation, language barriers (especially among indigenous populations), and mental or emotional health issues. In India and Bangladesh, for example, those interviewed noted that the lack of personal identification often drove exclusion, especially among women, persons with disabilities, and the socially excluded, such as transgender individuals.

Read the rest of this entry »

> Posted by Sonja E. Kelly and Misha Dave, CFI

Dhanalakshmi (far right), client at Equitas

If there is one thing we have learned from working on disability and age inclusion in financial services, it is that including these populations in financial services is in some ways easier than practitioners expect it to be but, in other ways, harder than it looks.

In our research on aging and financial inclusion, one of the key insights was that financial service providers of all sizes often apply age caps on credit products. However, many institutions we talked with did not know exactly where these standards came from. Some attributed them to concerns about life expectancy of older clients, some to institutional history (“that’s just the way we do it”), some to the increase of credit portfolio insurance it would incur, and some to a perception of older people as economically dormant.

Many of these concerns can be mitigated by better research and dispelling myths about the creditworthiness of older people. Easy, right? In fact, there are some institutions that apply creative ideas to providing credit to older people. Group guarantees and automatic withdrawal payments on loans from publicly administered pensions through government partnerships are both examples of this.

However, such institutions providing credit to older people seem to be the exception rather than the rule. Worse, convincing institutions to care about this population is not easy. One institution we spoke with in India was baffled by the idea of providing credit to people over the age of 55. “But [the older people] could die and wouldn’t pay the loan,” the product developers insisted. Doing the research and articulating the issue was the easy part — now the hard work begins of advocating on behalf of older people.

Similar attitudinal barriers exist in financial institutions for serving persons with disabilities. Let’s take stock: over one billion people around the world — 1 in 7 of us — have a disability and four-fifths live in developing countries like India. Despite this and the fact that many microfinance institutions (MFIs) claim to be dedicated to “serving the world’s financially excluded people,” less than 1 percent of their clients are persons with disabilities.

Read the rest of this entry »

> Posted by Carol Caruso, Senior Vice President, Channels & Technology, Accion

Providing micro financial services is often a costly endeavor. As practiced in most places today, it involves many manual processes which limit the potential for scaling up and expose vulnerability to poor service, errors, and fraud. Furthermore, as telco operators and fintech companies bring services to customers through new distribution mechanisms, microfinance banks (MFBs) need to explore innovative ways to competitively deliver their services. Hence, it is promising to see a rise in the use of tablets, smartphones, and other devices housing applications that digitize field operations. Digital field applications (DFAs) offer MFBs a way to take advantage of technology to solve some of these challenges. Globally MFBs have deployed DFAs in a wide variety of ways. For example, loan officers equipped with DFAs can process loan applications and answer client inquiries in the field, eliminating paper forms, digitizing data, and saving time and money for organizations and their clients. Bringing financial services out to clients can achieve a much-needed personal touch and can even increase the richness of the client interaction. For example, client education and consumer protection awareness can be more effective when digital messages are delivered by a field staff member. DFAs can also improve credit operations. When assessing loan applications and risks, field officers can operate more efficiently if digitally equipped.

In order for MFBs to successfully leverage these tools, both for their and their clients’ benefit, they must understand their business case, and incorporate best practices for implementation that have been derived from lessons learned by others. There is no shortage of pilots that have been halted due to challenges arising from lack of experience and understanding – despite hardware availability or subsidies.

With this in mind, Accion’s Channels & Technology group have published a case study aiming to provide some clarity on the impact of DFA use by examining the business case, implementation process, and effects for three MFBs: Ujjivan Financial Services in India, Musoni Kenya, and Opportunity Bank Serbia (OBS). Our case study presents a consolidated review of the findings from the three MFBs, with an accompanying Excel-based business case toolkit, available for MFBs to examine the potential impact a DFA might have on their business. Individual cases presenting the findings from each institution are also available – here, here, and here.

Read the rest of this entry »

> 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.

Why Being Customer-Centric Is a Supply Side Strategy…

> Posted by Evelyn Stark, Assistant Vice President, Financial Inclusion Lead, MetLife Foundation, and Graham A. N. Wright, Group Managing Director, MicroSave

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.

In recent years Human Centered Design (HCD) became a buzzword in the financial inclusion world. It focused financial service providers on the design of products and services based on customer insights. Design firms became part of the technical provider fraternity, servicing financial service providers in the quest to improve inclusion. At the same time, the network of financial service providers broadened to include mobile network operators and retail chains, in addition to microfinance institutions (MFIs), banks, cooperatives, and a myriad of microfinance suppliers. With new entrants come new ideas – and repetition of old ones. One consistent, but underrated idea, is to focus on the customer.

Customer-centricity is not a new concept in the microfinance and financial inclusion world. In 1998, MicroSave was set up (by UNCDF/DFID who were then joined by CGAP, the Ford Foundation, and the Austrian and Norwegian governments) to promote savings in the microcredit landscape of East and Southern Africa. Initial research in Uganda revealed that although microfinance institutions (MFIs) did not have a legal mandate to collect savings, they did have another problem: drop-outs as high as 60 percent per annum. Further investigation revealed that much of the problem lay in poorly designed credit products. Much of 1999 and 2000 was spent understanding the problem, re-designing products, and developing the “market research for microfinance” tools and training.

This past experience resonates with the current realization among proponents of financial inclusion that customers are not using products. This is evident in the GSMA research that found that 68 percent of registered mobile money customers do less than one transaction in 90 days. No frills accounts in India, and transactional accounts in many other settings, are mostly dormant (GAFIS, 2011, DNA, 2015). The market-led research approaches aimed at microfinance, and the human centered design approaches of the recent years, did not fully succeed in focusing provider efforts on the customer, nor did they help to increase the use of financial products and services. In the quest to understand this, we return to the unfolding story of the early years of market-led approaches, based on the MicroSave experience.

Read the rest of this entry »

> Posted by the Smart Campaign

Momentum for Smart Campaign Certification is accelerating. Today, we’re thrilled to announce that there are now more than 20 million lower-income clients whose financial service provider has been certified as meeting the Campaign’s standards for consumer protection.

Since February 2015, the number of clients served by Smart-Certified financial institutions (FIs) has grown by 6 million, to a total of 21 million, with the certification of an additional 11 institutions. To date, 39 FIs, from 19 countries across Latin America to Africa and Asia, have achieved Smart Certification, including some of the world’s best-known institutions dedicated to serving the poor.

As you might be familiar, the Smart Campaign’s Client Protection Certification Program contains a core set of standards against which institutions are evaluated by independent, third-party evaluators. Smart Certification publicly recognizes those institutions providing financial services to microentrepreneurs with a standard of care that upholds the microfinance industry’s seven Client Protection Principles. Customers of Smart-Certified organizations can be confident that their financial service provider has policies and processes in place to ensure that they are treated responsibly.

“Twenty million clients is an exciting milestone – recognition of the fact that there’s growing momentum in the industry for client protection,” said Isabelle Barrès, Smart Campaign director. “These organizations are not just paying lip service to the concept of fair treatment, but actually working hard to improve practices,” she added.

In April 2015, having listened carefully to evaluation results and industry feedback, we launched certification program revisions to streamline the process while maintaining high standards. These revisions included an appeals and complaints system and a process for renewing certification validity. At the end of 2015, the Campaign will introduce an accreditation system to license existing and new certifiers, and a version 2.0 of the certification standards. Certification 2.0 standards remove duplication and ambiguity, and deepen standards for savings, insurance, and digital financial services.

Even as the coverage of the certification program approaches critical mass, the broader Smart Campaign continues to advance. For the Campaign’s next phase we are excited about working on the following:
Read the rest of this entry »

Enter your email

Join 1,563 other followers

Financial Inclusion 2020 News Feed

Each week the FI2020 team at CFI highlights compelling stories and content on all things financial inclusion from across the web. Click here to visit the news feed.

Visit the CFI Website

Twitter Updates


Founding Sponsor

Credit Suisse is a founding sponsor of the Center for Financial Inclusion. The Credit Suisse Group Foundation looks to its philanthropic partners to foster research, innovation and constructive dialogue in order to spread best practices and develop new solutions for financial inclusion.


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.

Get every new post delivered to your Inbox.

Join 1,563 other followers