> Posted by Richard Shumann, COO, the Vitas Group

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I learned a hard lesson in 1996. I was managing a provincial office for an international NGO, serving internally displaced people in southern Africa. I paid a surprise visit to a food distribution site, and saw beneficiaries were not getting their full rations. I checked the warehouse and discovered our food distribution manager had been selling food aid on the side. I informed the country director, and the distribution manager was fired. When I explained to my deputy what had happened, he shook his head and said, “The boss is always the last to know.”

As I worked in microfinance as a consultant, manager and board member, I worried about how CEOs, boards and shareholders learned what was really going on in their institutions, instead of just hoping managers got away from their desks, actually found fraud, and reported it.

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> Posted by Elisabeth Rhyne, Managing Director, Center for Financial Inclusion at Accion

The following post was originally published on NextBillion and has been re-published with permission.

Two books published this year, The Financial Diaries, by Jonathan Morduch and Rachel Schneider, and The Unbanking of America, by Lisa Servon, take on the state of financial inclusion in the United States. Given the professional standing of their authors, we can expect that these books will contribute substantially to the body of knowledge on financial inclusion. What is perhaps more surprising is just how broadly important their messages are. Both books examine what is arguably the top economic challenge in America today – the crumbling of the economic foundation for many working-class and middle-class families – and they do so through the lens of financial services, a somewhat unusual but very revealing perspective.

The Financial Diaries: How American Families Cope in a World of Uncertainty focuses on the variability of income and expenses, which makes it hard for an increasing number of Americans to maintain a steady standard of living. The weekly and monthly extent of this volatility eluded most national statistics until the Diaries project, with its unique methodology, which was developed initially to study financial behavior in low-income countries. During a Diaries project, researchers record every financial transaction made by participating families each week for a year. This detailing yields intimate portraits of families’ financial lives at a level of magnification not previously available.

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> Posted by Center Staff

With Financial Inclusion Week 2017 less than two weeks away, we’re excited to share a full calendar of events and specifically, 11 webinars or online events that you can join from wherever you are. Topics include micro pensions, IndiaStack, interactive voice response technology, and more. Don’t pass up an opportunity to hear from organizations and experts from around the world – register today!

Monday, October 30

Digital Fireside Chat: How Are New Products and New Partnerships Unlocking Access to Insurance?
Hosting Organizations: AXA, Center for Financial Inclusion at Accion
To kick of Financial Inclusion Week 2017, Elisabeth Rhyne, Managing Director of the Center for Financial Inclusion at Accion will join Garance Wattez-Richard, Head of AXA Emerging Customers for a digital fireside chat. During the webinar, Rhyne and Wattez-Richard will discuss how new products and partnerships are opening up new potential in the inclusive insurance space. They will take a specific look at how AXA is working to reach emerging customers.

Technology-Enabled Financial Inclusion in Myanmar
Hosting Organizations: ThitsaWorks, Internet Journal
ThitsaWorks and Internet Journal will host a Facebook Live conversation on the impact of digital services on financial inclusion in Myanmar, where mobile phone ownership has grown rapidly from 5 to 90 percent between 2011 and 2017.

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> Posted by Jeremy Gray, Engagement Manager, Cenfri

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Why is it that 80 percent of bank account holders in Madagascar only use their accounts once a month or less?

What makes the parents of a child requiring unforeseen medical treatment in the DRC choose to approach their mutualitée (a local form of informal mutual aid society) for a loan despite access to a microfinance institution or local bank?

If a Zimbabwean has a mobile money account, why does he ask a family member to send him money in the care of a bus driver rather than through that mobile account?

The gap between uptake and usage is well documented in financial inclusion. But while these insights are important evidence of the gap, they tell us very little about why this gap exists. The result is that we know there is a problem, but without understanding why, we can do very little to change the problem.

To help us better understand the why, we at insight2impact (i2i) have been exploring the factors that affect usage. In doing so we have incorporated insights from across multiple fields on human decision-making and applied the most relevant aspects of existing models and understanding to the field of financial inclusion.

Decision-making is important for both financial service providers (FSPs) and policymakers to understand, but it isn’t simple, and, typically, our decisions are not based on one single factor. Furthermore, psychology and behavioral economics have illustrated that in some cases we are not even cognitively aware of many of the important factors that influence our decisions.

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

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My sister-in-laws won’t let me say the “H” word around their kids because of how much hockey equipment and ice time cost. Instead they have opted for lacrosse. The joke’s on them, however, as the recent Time article “How Kid Sports Turned Pro” estimates the average annual spending for lacrosse for one child is $7,956 while hockey is only $7,013!

There is no doubt a major shift happening in the United States around youth sports: away from informal neighborhood and club leagues toward more organized and costly alternatives. Kids don’t just show up to a field with a bat and a ball anymore. According to Time, families are now asked to shell out $300 for a bat, $250 for a glove, $200 for a uniform, $90 for cleats, $70 for an equipment bag, and the list goes on. And in this case of baseball, that is just the equipment. There is also the travel, tournament fees, batting cages, and private coaching that many parents fund with the hope of giving their kid a slight competitive advantage. Youth sports are big business, having grown from an $8 billion industry in 2005 to a $15 billion industry in 2016.

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> Posted by Center Staff

Financial Inclusion Week 2017 is just over two weeks away. From October 30 – November 3, over 50 organizations will host online and in-person events across the globe, exploring the theme New Products, New Partnerships, New Potential.

We are excited to announce the AXA Group is a track partner for the Week. The AXA Group, a world leader in financial protection, supports its individual and corporate customers at every stage of their lives, providing them with the products and services that meet their insurance, personal protection, savings and wealth management needs.

A full calendar of Financial Inclusion Week events will be launched on October 17th, but here is a quick preview: Read the rest of this entry »

> Posted by Emma Morse, Project Specialist, CFI

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Mavis Wanczyk, a staff member at Mercy Medical Center in Springfield, Massachusetts and a mother of two, recently became a multi-millionaire, revealing herself as the $758.7 million Powerball jackpot winner – the largest individual winner ever. Wanczyk quit her job of 32 years less than 24 hours later.

Reflecting on her decision, Wanczyk remarks, “I was just there to buy it, for just luck. Just go in, buy a scratch ticket, and say maybe it’s me, maybe it won’t be me. It’s just a chance, a chance I had to take.”

The odds of winning the Powerball jackpot are 1 in over 292 million. In order to purchase all of the possible combinations, an individual would need to spend $584,402,676 on tickets. You are about 100,000 times more likely to be struck by lightning at some point in your lifetime than you are to hit this particular jackpot.

So why do Americans spend $70.15 billion on lottery tickets annually, while very few of us live in fear of being struck by lightning? Read the rest of this entry »

> Posted by Rachel Morpeth and Danielle Piskadlo, Analyst and Director of the Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion 

The following post was originally published on the Microfinance Gateway.

As a hub of technology-based innovation, sub-Saharan Africa (SSA) leads the world in mobile money accounts. 12 percent of adults in the region have a mobile money account, compared to 2 percent globally. In a recent global survey measuring progress towards financial access and usage, five of the ten highest scoring economies hailed from SSA. However, financial exclusion remains acute.

The fact that most of Africa’s population lacks access to formal banking services but has one of the highest mobile penetration rates in the world provides the perfect breeding grounds for the use of financial technologies to grow a customer base. However, as disruptive technologies and business models continue to revolutionize the financial inclusion landscape in Africa, they present new challenges to leaders and boards.

These challenges can only be overcome through creative, forward-thinking solutions and active dialogues across governance bodies – boards and regulators. Board members, CEOs, regulators and fintechs will come together to advance these issues in Ethiopia on October 12-13 at the Center for Financial Inclusion at Accion’s (CFI) Governing in a Digital World roundtable, a side event to African Microfinance Week. In the meantime, let’s take a quick look at a few of the challenges to be discussed, and their respective solutions.

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> Posted by Sonja E. Kelly, Center for Financial Inclusion at Accion, and Sergio Navajas, Multilateral Investment Fund, Inter-American Development Bank

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

Financial institutions of all sizes around the world are joining the digital revolution. In our work and research at the Center for Financial Inclusion at Accion and the Inter-American Development Bank we have seen some best cases of institutions shifting toward digital as well as some failures. At the end of this month we’ll be discussing strategies to pursue digital innovation as part of the Foromic in Buenos Aires. (Join us for our session on Tuesday, October 31st at 11:15 am!) In the meantime, for institutions that want to start down the path of digital innovation, here are a few of our top strategy suggestions.

1. Make sure you actually want to digitize. Some institutions are digitizing because they have undertaken extensive research on what value digitization will bring to their institution. These analyses involve things like cost reduction, increased access, increased efficiency, better record-keeping, or all of the above. But others are digitizing, more or less, because they see their peers doing it. Remember when your mom told you not to jump off a bridge just because everyone else was? The same applies here. There are some institutions that will do just fine without pursuing a full digital strategy right now. And that is ok. A good rule of thumb here is you’re likely better off not digitizing at all if you are only going to “phone it in.”

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> Posted by Lizzy Bolze, Project Specialist, Investing in Inclusive Finance, CFI

Board members and CEOs of MFIs in the MENA region met at the MENA Governance and Strategic Leadership Seminar hosted by CFI, Calmeadow and the Sanabel Network, in Jordan this March

Over the past few years, the financial inclusion landscape in the Middle East and North Africa (MENA) region has rapidly evolved with new market entrants, changing regulations and increased financial risks. The industry aims to expand access to formal financial services and achieve much needed economic stability, and yet the financial inclusion ecosystem in MENA has experienced slower growth over the last 10 years compared to their peers in other parts of the developing world. According to reports by the World Bank and CGAP, microfinance institutions (MFIs) in MENA are currently reaching approximately 3 million borrowers, with a loan portfolio of over $2 billion — far below the market potential estimated at 56 million borrowers. The stakes are getting higher and MFIs need to reconsider their strategic directions in order to reach the unmet clients at the base of the economic pyramid.

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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.

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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.