What if your employer told you that your next paycheck would come in the form of  Bitcoin. How would you react?

Woman using mobile phone in olive farm

> Posted by By Chrissy Martin, U.S. Global Development Lab, USAID
Note: This post originally appeared on ICTworks and is re-posted here with permission.

Do farmers really want to be paid in mobile money? To answer this question, I’ll ask you to first entertain a brief thought experiment.

Imagine that your employer told you that next pay period, your company will start paying you in Bitcoin.  How would you react?  Sure you’ve heard about Bitcoin, but you have lots of questions as to what it will mean to receive your salary this way, such as:

  • Am I getting swindled?!
  • Where can I use bitcoin?
  • Can I spend it like dollars, or will I have to convert into dollars first?
  • Where can I convert?
  • How much is the conversion fee?
  • Will I be paid into my same bank account?

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The new Gallup Global Financial Health Study contributes significantly to our understanding of how to make financial inclusion work for customers. This dataset comes at the perfect time—right on the heels of the Global Findex—and with it, we can start to ask ourselves with humility if financial inclusion is leading to financial health.

> Posted by Sonja Kelly, CFI, and Evelyn Stark, MetLife Foundation

Bangladeshi children play in a backyard.Editor’s Note: This post originally appeared on the NextBillion Blog and is re-posted here with permission.
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What if we opened millions of bank accounts but nobody used them? That is one of several conundrums raised by the recently released Global Findex data for 2017.

> By Elisabeth Rhyne and Sonja Kelly, Center for Financial Inclusion at Accion
This post originally appeared on Next Billion’s blog and is reposted here with permission.

geographic distribution of 3 billion people without active accounts, 2017
About 3 billion people in the world either have no account or have an account that sits unused. The countries with the largest number of financially excluded people are also the highest population countries: India and China. This picture has changed little in the past three years.

The Global Financial Inclusion Database (Findex) is a survey of the financial habits of adults in 144 countries with data from 2011, 2014 and now (2017). Governments, foundations, big financial companies and fintechs alike rely on the Findex to understand how people are using (or not using) financial services. It is the best available yardstick through which we measure global progress toward financial inclusion.
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Former CFPB staffer endorses consumer protection and we couldn’t agree more.

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

Arjan Schutte, a venture capitalist and head of Core Innovation Capital, was recently asked to resign from his advisory role with the U.S. Consumer Financial Protection Bureau – as were all the other members. This prompted Schutte to make the following statement about his belief in the importance of consumer protection regulation:
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100 Certified Seal Final - IBarres 4-24-2018Adapting Smart Certification for Digital Financial Services

>Posted by Alex Taylor, Marketing and Community Outreach Manager, Smart Campaign

This is the fourth in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry.

Since launching Smart Certification in 2013, we’ve witnessed rapid changes in the financial inclusion space driven by digitization of financial services and fragmentation of traditional business models. Nearly $100 billion in investment has flown into the global fintech market since 2010, creating an explosion of digital innovations and provider models. Our analysis of the Global Findex data shows that recent gains in inclusion have been largely driven by the rise of mobile money and digital payments.

Digital financial technology is central to making financial products more accessible to underserved people around the world. This is an exciting moment for digital finance, and an equally important for time for client protection. The industry has the opportunity to marry the client-centric approach embraced by so many fintechs and the industry-accepted consumer protection standards to develop quality products, build trust, and encourage usage. The Smart Campaign will leverage its experience to help lead the charge on this.

As we celebrate 100 Smart Certifications, we look forward to the next 100. Looking to the future requires defining responsible practices and standards given the technological advances that allow nearly instant access to credit, payments, savings, and insurance. The standards and the certification program must become more agile, mirroring the fast pace of change. We envision an adaptable approach that takes into consideration the product and client delivery mechanism, as well as the provider’s function in the value chain. The flexibility of this framework could eventually allow any type of provider to seek certification, but the process will begin with a focus on digital lenders and expand to encompass additional business models on a demand-driven basis.
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Jeff Riecke photo

Image credit: Accion

CFI bids a fond farewell and good luck to Jeff Riecke, former editor of the CFI Blog, as he takes up residence as a USC graduate student. Here he reflects on his tenure and the evolution of the CFI Blog.

This is my last CFI Blog post. Well, hopefully not. But it is my last post as its manager, a position I’ve held for roughly half a decade.

I’ll miss it! Well, not everything about it… I won’t long for the unyielding daily hustle to produce posts. But I’ll miss many things about managing the CFI Blog, perhaps most of all, I’ll miss connecting with all of you, and being the point person for many individuals and organizations in the financial inclusion community to share new insights and industry developments. It was truly a privilege to get to work with so many passionate individuals around the world on how to best tell their stories.
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Woman holds POS device

Demand for credit in Africa exceeds supply, despite the rise in mobile money. Yet start-ups, growing daily in number, are at risk of accelerating over-indebtedness, by supplying credit to clients without conducting appropriate repayment capacity analysis. Digital lenders need to understand the risks of over-indebtedness from a client perspective, and algorithms need to evolve to take this into account. Regulation also must guide good practice for fintech digital lenders.
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> Posted by Elisabeth Rhyne and Sonja E. Kelly, Managing Director and Director of Research, CFI

Where are we in achieving a financially inclusive world?

Financial inclusion momentum has slowed in the past three years, the 2017 Global Findex revealed. The financial inclusion community may wish to reflect on these results, recalibrate expectations, and then re-engage.

In a new report, the Center for Financial Inclusion at Accion journeys through the 2017 Global Findex data recently released by the World Bank, which assess progress toward financial inclusion on the basis of a 150-country study conducted by Gallup. We examined the 2017 Findex data from our own perspective, and although we found some good news, there are also some concerning trends.

In recent years, the headline for financial inclusion has been the percentage of adults in the world with accounts (either financial institution or mobile-based). That number has grown since 2014 to 69 percent – good news. But we believe it is more relevant, if less encouraging, to focus on the number of adults with active accounts, that is, accounts they have used at least once in the past year. That number is 55 percent, representing a net gain of 280 million active accounts between 2014 and 2017, a much more modest gain than the nearly 700 million total new accounts added in the previous three years (2011-2014).

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> Posted by Sarah Samuels, Global Operations Manager, the Smart Campaign

This is the third in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry

When financial service providers approach Smart Certification, they often have a number of questions. Many want to know if certification is worth the investment in terms of their financial bottom line. The answer we’ve heard from Smart Certified institutions is an unequivocal “yes.” As the Smart Campaign celebrates the recent milestone of 100 Smart Certifications, we’d like to explore the value of certification as Smart Certified financial service providers see it.

In partnership with Deutsche Bank, the Smart Campaign recently conducted a survey of certified institutions to understand how they view their experience with Smart Certification. (You can find the full survey findings in the Consumer Protection Resources Kit.) In an affirmation of Smart Certification’s value, 82 percent of institutions surveyed believe the cost of certification (in terms of both the servicing fee and internal staff time) was compensated by the value the institution received in return. This finding aligns with research from the European Microfinance Platform, which determined that consumer protection practices, such as price transparency, respectful collection practices and effective complaint resolution, are linked to higher financial returns and have a positive impact on the provider’s bottom line.

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> Posted by Jeffrey Riecke, Senior Specialist, CFI

Embed from Getty Images

Never before have issues of data privacy and security been more top of mind. In the United States this attention was on full display a few weeks ago when every media outlet was glued to Facebook’s CEO Mark Zuckerberg as he fielded questions from Congress on how his company handles, and has mishandled, user data.

Europe begins a new era for data protection today as the General Data Protection Regulation (GDPR) goes into effect, following its passage roughly two years ago. The law is being celebrated widely for its robust customer-centricity. The degree to which it succeeds, in Europe and globally, in enforcing a business environment that provides adequate safeguards for consumer data management remains to be seen. One thing is certain, however: it has the potential to change the way we all interact with businesses, from internet platforms to banks.

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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.