Comments on: Accessing the Future: Beyond the Traditional Microfinance Space http://cfi-blog.org/2012/02/07/accessing-the-future-beyond-the-traditional-microfinance-space/ Fri, 04 Oct 2013 15:39:41 +0000 hourly 1 http://wordpress.com/ By: Center for Financial Inclusion http://cfi-blog.org/2012/02/07/accessing-the-future-beyond-the-traditional-microfinance-space/#comment-4671 Fri, 22 Jun 2012 13:40:21 +0000 http://centerforfinancialinclusionblog.wordpress.com/?p=5166#comment-4671 Thanks, John, for your thoughtful reflections here, and also on your own site (http://financialeducationcentre.co.ke/2012/06/are-we-rushing-financial-inclusion-to-failure/). You are right to point out that growth in financial inclusions is impossible without laying the necessary groundwork. The challenge, therefore, is to find the right balance: to foster growth while also making sure that we ensure that people are ready for such growth. It is an audacious challenge, to be sure! Looking forward to continuing to dialogue with you about this.

]]> By: John Gitau http://cfi-blog.org/2012/02/07/accessing-the-future-beyond-the-traditional-microfinance-space/#comment-4412 Mon, 04 Jun 2012 11:27:37 +0000 http://centerforfinancialinclusionblog.wordpress.com/?p=5166#comment-4412 Camilla, this is good simplification of a complex matter. The three approaches are workable. The only thing is that we have to allow one phase to grow to the next without undue rush. Trying to do so many things at the same time to arrive at financial inclusion as a time based end, is a bit difficult. If a person learning how to ride a bicycle was to focus on how not to fall at the same time focusing on how not to hit pedestrians, the learning becomes hard. First, the focus needs to be on balancing the bike. Then controlling bike in motion and finally enjoying the ride while not hitting pedestrians. To apply the parallel, let us be happy that so many people have already adopted mobile money for transfers and payments in certain countries and the wave is spreading. Let us not flood the new system so soon with the next stage offerings of mobile financial services. We need to allow critical mass level of comfort and consolidation. Let us not get over excited and confuse the users, most of who are not only academically illiterate but also financially illiterate, especially in developing countriesl. Within no time, and with innovative and easy to understand and use products, consumers will adopt. In Kenya, ‘Mbao pension schemes’ is a reality, as a financial service. Mbao means Ksh 20. The selling point is that the consumer can save as little as ksh 20 daily toward pension. That amount and concept resonates well with consumers at all financial levels. It reads easy and accessible. Through the phone, a consumer can check balances of his or her pension savings. Insurance is being sold in the same vein. A consumer can now get daily insurance cover by paying ksh 20. That also makes sense and it is equally easy to understand. Before long, many products can be introduced and inclusion will then become a daily affair as opposed to a destination goal post.

Fringe providers, are key given their innovativeness, customer understanding and access as as you have rightly said Camilla. The only challenge is that they may not be good custodians of consumer protection. I suppose they don’t need to and we shouldn’t be worried much about that. We should have financial literacy educators taking up that role. That is good division of labour. It is not fair to fail to empower fridge providers just because in their creativity they will reap off consumers with their products.

Finally, microfinance institutions as correspondence is a brilliant idea especially coming from a vastly experienced mind like Camilla’s. It is a great middle ground. MFIs can be good custodians of agency banking on behalf of banks as they have what banks don’t have. Therefore, if agency banking can be structured in a franchise model to be run by microfinance, that will represent tripple benefits to banks, microfinance institutions and customers. Branchless banking has been demonstrated as cost effective. In Kenya, Equity Bank proved it by having almost a quarter of its revenue in the year 2010 coming from agency banking. I am yet to see a model that can beat agency banking as business model with so many wins. Financial services in Kenya are now at the remotest areas in the country through agency banking.

Thanks Camilla for sharing these insights with us. It is upto product developers to design products that are easy to understand, affordable and non overwhelming to consumers. If each does their part well, we shall finally wake up to realize how far we are in inclusion. It is a journey and not a destination, with due respect to time targets. Let each party to inclusion agenda play the roles they are good at. No protection will ever be better than financial literacy. No one will ever have a better grasp of consumers and outreach than the fringe provider. And no one will ever have the financial muscle to create products than banks. Finally, no one can reach scale better than microfinance institutions who never shy away from mingling with the consumers wherever they are, rural or urban.

]]> By: Ashok Kumar Meda http://cfi-blog.org/2012/02/07/accessing-the-future-beyond-the-traditional-microfinance-space/#comment-4338 Thu, 31 May 2012 08:28:07 +0000 http://centerforfinancialinclusionblog.wordpress.com/?p=5166#comment-4338 Very interesting knowledge / experience sharing here by Camilla. There is never an end in product development while resolving on solutions for Financial Inclusion, answering the needy across the world. Awareness campaigns are the needs of the day, particularly in remote pockets of African continent. Successful efforts are yet to be replicated….like the mobile advent in Kenya / Tanzania are yet to penetrate in Nigeria or Ghana of West Africa.
Camilla may please her experiences in African countries, having been exposed to a variety of models evolved In various environments of Asia / Africa and Americas.
Let me know of her other contributions.
Ashok Meda, Senior Banking Adviser, Institutional & Govt Advisory, ING Bank…..presently on depution to Nigeria

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