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> Posted by Lisa Kienzle, Director, Mobile Financial Services, Grameen Foundation

The following post was originally published on the ImpactX blog of the Huffington Post.

Women participating in paper prototyping for new mobile app in Uganda

Women are the backbone of the household in Africa — they manage the home, care for the children, are responsible for education and healthcare, and contribute to the household’s livelihood. Helping women helps the entire family. However, women continue to lag men in participating in the formal economy, including accessing financial services.

The Problem: The Poor — Especially Women — Are Excluded From Financial Services.

For the rural poor — especially women — accessing formal financial services is nearly impossible. Few have formal identification needed to open an account; others lack a stable job or collateral needed for a loan. Often bank branches are far from a rural village, making the trip to deposit or borrow funds too expensive and time-consuming.

Many of the rural poor have taken up an approach to support saving and borrowing by forming Village Savings and Loan Associations (VSLAs). Under this approach, 25-30 members of a community form a group. This group meets weekly and saves a fixed amount — at times, as little as 20 cents a week. The savings are lent out to members as loans. All money not lent out is stored by the group treasurer in a metal box secured with three locks and three keys, which are held by three separate key holders. It is, as some group members call it, the “Village Bank.”

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> Posted by Juan Blanco, Associate, Financial Inclusion 2020, CFI

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

After five months of discussion, Colombia’s Financial Inclusion Bill has been approved by Congress, now only needing presidential sanction to become law. Earlier this year the country’s Minister of Treasury and Public Credit and Minister of Information Technologies and Communications filed the bill in Congress. The bill articulates a framework for the expansion of savings and payment services by engaging a wider range of providers in offering digital services.

The new law would allow for the creation of a new type of financial institution, Organizations Specialized in Electronic Deposits and Payments. These institutions can be established by individuals or legal entities, with a minimum capital requirement of $3 million, approximately 10 percent of the minimum currently required for commercial banks. The new electronic deposit and payment providers can receive capital investments from commercial banks and financial corporations.

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> Posted by Center Staff

This edition of top picks features posts highlighting discussions at the 17th Microcredit Summit, how the Ebola crisis is affecting microfinance in West Africa, and new statistics on the continued growth of the mobile money industry worldwide.

The 17th Microcredit Summit, this year’s iteration of the Microcredit Summit Campaign’s annual conference, is underway this week in Merida, Mexico. For those of us not in attendance, the Campaign is live streaming the sessions online. NextBillion is also sharing the experience through blog posts, including one published yesterday providing a report-back on day one of the event. The post offers insights from the day, including notable quotes from keynote speeches and panel presentations, and themes that emerged across sessions.

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> Posted by Caitlin Sanford, Bankable Frontier Associates

As smart phones become much more affordable and digital solutions for the poor transition to app form, the burden is on new products to build trust and enable learning through intuitive interfaces designed particularly for this segment.

Marc Prensky coined the term digital immigrants to describe people who, as opposed to young digital natives, did not grow up immersed in technology from a young age. Mastering quickly changing technologies is a challenge for educated, fairly computer literate people. So, what is the experience like for digital immigrants who have learned all they know about technology from a basic Nokia phone?

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> Posted by Juan Blanco, Associate, Financial Inclusion 2020, CFI

In 2012, developed countries spent 8.6 percent of GDP on insurance, while developing countries spent only 2.7 percent. Traditional insurance providers face difficulties when serving low-income and unbanked customers with traditional insurance products in areas like transaction size, client education, and outreach, among others. However, mobile technologies have disrupted the way insurance is delivered and in the last two years a new array of mobile microinsurance services have popped up. Earlier this year CGAP identified 74 operators with live mobile microinsurance services, making up an increasingly diverse space that is active in more countries, offering a wider range of products, and using different business models.

Two of these services stand out, given their success, both with leading mobile network operators (MNOs). Tigo Kiiray in Senegal enrolled 13 percent of Tigo’s 3 million subscriber base during its first year and a half of its launch. Talkshawk Mohafiz by Telenor Pakistan managed to issue 400,000 insurance policies within its first two months of operations. What have these models done to gain access to this historically difficult market segment?

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> Posted by Center Staff

This week, The Guardian Global Development Professionals Network launched its Financial Inclusion hub, featuring stories, infographics, videos, and other resources on financial inclusion issues worldwide. The hub will be updated regularly over the coming months with original content. The first collection of posts includes:

  • Using mobile money to buy water and solar power in East Africa
  • Funeral insurance in South Africa: counting the cost of life and death
  • Zimbabwe’s Econet Wireless and the making of Africa’s first cashless society
  • An interactive map on ATMs worldwide

Guardian Professional Network hubs are community-focused sites, where The Guardian brings together advice, best practice, and insight from a range of professional communities. With this week’s launch, financial inclusion is sharing the stage among global development issues such as climate change, global health and nutrition, and urbanization, with the goal of promoting understanding, dialogue, and debate among those working in global development. CFI is a knowledge partner with The Guardian for the Financial Inclusion hub, sharing story and topic ideas and facilitating connections with editors.

Visit the hub at www.theguardian.com/global-development-professionals-network/financial-inclusion. You can join the conversation on Twitter using #NOunbanked

Have some ideas for issues and stories that should be investigated as part of the hub? Let us know in the comments.

Posted by Ignacio Mas, Independent Consultant

I guess it happens in all human endeavors; we sometimes get carried away wishing things were the way we think they ought to be. Let me provide three cautionary observations relating to financial inclusion: about how we measure it, how we talk about it, and how we assess it. The point is not to dampen enthusiasm about the possibilities, but to reflect on our progress in a more realistic way.

Industry Showcases and the Numbers Game

Through numerous industry conferences and blogs, certain players get put up as shining examples for the industry to follow. M-Shwari is perhaps the latest one, I guess because it delivers large customer numbers to an industry that is still largely focused on coverage rather than usage, and it represents the kind of telco-bank partnership that many have been fantasizing about.

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> Posted by Juan Blanco, Associate, Financial Inclusion 2020, CFI

Mobile money services have spread like wildfire, making people less cash-reliant and able to easily carry out transactions like bill payments and money transfers. GSMA’s Mobile Money for the Unbanked program identified 14 mobile money sprinters – leaders of some of the fastest growing mobile deployments in the world. Among these, three case studies from mobile money services in Pakistan, Somaliland, and Zimbabwe have been published. The case studies highlight the reasons why these particular schemes have achieved significant customer bases and transactions volumes since their deployments.

Easypaisa (Pakistan). After only 11 months, Easypaisa registered 5 million transactions and by the end of 2012 it had 100 million transactions with a volume of $US 1.4 billion. Easypaisa was created in late 2009 by the MNO Telenor Pakistan and Tameer Bank, after Telenor acquired a 51 percent stake in Tameer. Telenor acknowledged that launching a mobile wallet product wouldn’t be the ideal way to set up Easypaisa since they only had a 22 percent market share and so the product wouldn’t encompass 40 million non-Telenor customers. Furthermore, regulations in the country called for very comprehensive Know-Your-Customer (KYC) procedures, creating the additional obstacles of increased registration cost and time.

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> Posted by Danielle Piskadlo, Manager, Investing in Inclusive Finance, CFI

Fifteen years ago in the microfinance space you may have been able to get away with understanding very little about your clients. Without much competition, MFIs could probably still make a decent profit by offering one product to all their clients using only one delivery channel. Thankfully, those days are gone.

The base of the pyramid is no longer a hidden or forgotten market segment. In fact, according to the recently-released 2014 Microfinance Banana Skins report, the pendulum is swinging in the opposite direction. Overindebtedness once again tops the charts as the biggest perceived risk, perhaps indicating that many clients are now able to gain access to multiple services providers. In some areas, an excess of providers may now be crowding the market.

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> Posted by Jeffrey Riecke, Communications Associate, CFI

Rwanda has a lot to celebrate in terms of financial inclusion these days. Last week in Kigali the National Bank of Rwanda (NBR) hosted a conference in partnership with the World Bank, the African Development Bank, and the Alliance for Financial Inclusion (AFI) commemorating their 50-year anniversary. At the event, titled Financial Inclusion for Inclusive Growth and Sustainable Development, NBR Governor John Rwangombwa highlighted the country’s recent rise in access levels, from 48 to 72 percent between 2008 and 2012 across formal and informal providers. Rwanda now has the laudable goal of increasing this figure to 90 percent by 2020. To help it get there, on Friday the World Bank launched a $2.25 million program supporting key financial inclusion areas for the country.

Along with overall exclusion rates dropping from 52 to 28 percent over 2008 to 2012, formal services access increased from 21 to 42 percent during the same period, according to the 2012 FinScope Rwanda Survey. The new government goal of 90 percent access by 2020 is an extension of the country’s Maya Declaration Commitment of 80 percent access by 2017. Rwanda’s growth in formal access can be attributed to products offered by both banks and non-bank providers, like the country’s community savings and credit cooperatives known as Umurenge SACCOs. Over the past three years, Umurenge SACCOs have attracted over 1.6 million customers. Ninety percent of Rwandans live within a 5 km radius of one of the cooperatives. Countrywide, the number of MFIs, including Umurenge SACCOs, increased from 125 to 491 between 2008 and December 2013. Elsewhere in the sector, over the last three years, the number of banks increased from 10 to 14, the number of insurance companies increased from 9 to 13, and the number of pension providers increased from 41 to 56.

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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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