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> Posted by Sonja E Kelly, Fellow, CFI
When we define financial inclusion, we need to think about the unique perspectives of each client. Financial inclusion is empty if it doesn’t add value to clients’ lives in some way. It’s essential to consider how financial inclusion would make the life of each individual better – which services are working for them and which aren’t. Along these lines, products should be framed, designed, and marketed relative to client needs. Instead of only thinking of how can we get more people to use a particular product, we should also be thinking about the needs of our prospective clients and how can we design products that meet those needs.
Constance Considers Financial Inclusion is a new CFI video, created by Elisabeth Rhyne and me, that tells the story of a fictional woman named Constance. Sharing some of the dimensions and needs in the life of Constance, the video shows how financial services could support her. We introduced the video earlier this week at the 6th African Microfinance Conference in Durban, South Africa, where we are pleased to say it was quite popular.
> Posted by Center Staff
If you want your message to be heard, go to where your intended audience is. If that intended audience is teenagers in the U.S., other than maybe schools or malls, what better place for engagement is there than cell phones? That’s the approach of Kiva and DoSomething.org’s new 25,000 Women campaign, an interactive phone-based project aimed at boosting the awareness among teens of the day-to-day challenges of women in developing countries, and in turn boosting teens’ engagement in promoting female entrepreneurship.
25,000 Women is centered on an SMS-based phone game that presents users with typical scenarios faced by women in developing countries and offers users options to choose from on what they think the best course of action would be. In accordance with the user’s responses, the game relays pertinent statistics and information on the realities of the given situation. One game scenario is, “You’re thirsty from working in the fields in Kenya. Would you rather A) Drink the murky water your employer provides? Or B) Go thirsty and risk dehydration?” If the user were to text respond “A”, the game would message, “Woah, only 59% of drinking water is actually safe — You could get a waterborne disease that puts you out of work for days (Yikes!).”
To add participation incentive, and to promote additional awareness as well as engagement and real-world impact, the game is linked to Kiva’s online micro-lending system. Individuals who share the game with the phones of six friends receive a US$25 loan credit to give to the woman entrepreneur on Kiva of their choosing. The hope is that this chain lengthens, that at least 25,000 working women around the world are supported, and that the project imparts a lasting impact among the teen participants on their ability to fight poverty.
The Kiva – DoSomething.org partnership was born out of Kiva’s interest in attracting more youth lenders to its program and DoSomething.org’s focus on engaging teens and young adults in social change initiatives. DoSomething.org conducted a similar campaign last year that targeted bullying, which engaged over 76,000 teens, and a teen pregnancy campaign over the last two years, which has had over 200,000 teen participants to date. 25,000 Women launched on July 19 and is planned to continue until September 19.
> Posted by Sarah Hugo, Project Manager, Developing Markets Associates (DMA)
The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
For unbanked citizens in developing countries, the collection of remittances sent by friends and family overseas is sometimes their only interaction with the formal financial sector. Yet remittances are too often overlooked when considering approaches for increasing financial inclusion. For Armenia, a country that receives 16 percent of its GDP from remittances, only 2.5 percent of people use an account to receive them.
In a recent workshop we conducted with middle managers from five banks in Armenia, staff admitted they were initially skeptical about the implementation of a financial education program aimed at remittance recipients. Even though the pilot was to be fully funded through the European Bank for Reconstruction and Development’s Early Transition Country Multi-Donor Fund, staff remained unconvinced about the potential impact and effectiveness of financial education and how it would be received by customers. These opinions were primarily due to expressed beliefs: that people would not be receptive to the program’s unplanned financial consultations, that their bank already did a good job at offering financial products to remittance recipients, and that most remittance recipients only have money to cover their basic needs and therefore have no need for financial products.
Halfway through the pilot, the results of the financial consultations have been impressive, and bank management and staff admit that their preconceptions were misplaced. The results indicate that there is indeed value in providing financial education and in targeting remittance recipients.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
It turns out there really is no escaping it. That old saying “it’s all about who you know” applies to the microfinance industry, too. In a paper published last month in the journal Science, researchers from MIT and Stanford University shared findings from a study on the diffusion of information and participation, specifically looking at how enrollment in new microfinance programs is influenced by the social network positions of those who are first told about the program. The study found that an MFI’s initial point-of-contact could have serious implications for a program’s enrollment.
The researchers grounded their study in modeling the diffusion of information and participation through a social network that discriminates between information passing (people must be aware of a program before they can enroll in it) and endorsement (the decisions of those who are aware of a program may be influenced by the decisions of those around them). In order to create such a model, one has to map out, in great detail with lots of data, such a social network. That’s just what the researchers did.
The team spent six months collecting information about the local residents of the study’s site: 43 villages outside of Bangalore, India. They surveyed households about a wide range of interactions – who goes to temple with whom, who asks for advice from whom, who barrows kerosene from whom, etc. – constructing a social network structure. Once this was created, representatives from the participating MFI, Bharatha Swamukti Samsthe, began entering the villages and offering microfinance loans to residents, starting by inviting village “leaders,” teachers, shopkeepers, savings group leaders, etc., to an informational meeting, and afterwards asked them to spread information about the loans.
> Posted by Center Staff
Today marks 2013’s International Youth Day, a day set aside for governments and individuals around the world to bring attention to youth issues. First designated by the United Nations in 1999, this year’s day is themed “Youth Migration: Moving Development Forward,” and seeks to raise awareness of the opportunities and risks associated with youth migration, share knowledge coming out of recent research and analysis, and engage stakeholders, including youth migrants, in discussing their experiences and in taking action.
Globally, there are about 214 million migrants, with more than 10 percent of these being youth. Like all who migrate, youth face serious rewards in departing their native country, such as economic opportunities and escaping persecution, as well as serious risks, such as discrimination and inadequate living conditions. Youth migrants also face particular challenges, like a heightened vulnerability to sexual abuse and exploitation.
In UN Secretary General Ban Ki-moon’s message for this year’s Youth Day, he indicated that too little is known about youth migrants’ struggles and experiences. For ways to get involved, including channels for sharing personal experiences, visit the UN website, here.
In the Roadmap to Financial Inclusion, the Financial Inclusion 2020 is creating an action agenda to advance financial inclusion for all client segments, including youth and migrants. To learn more about the Roadmap and to explore becoming a Roadmap reviewer, visit the FI2020 website, here. FI2020 also offers the opportunity to engage with financial inclusion among youth and migrant segments through the Mapping the Invisible Market initiative’s interactive data tools. With the Data Explorer, you can create visualizations illustrating how changing economics, technologies, demographics – including on youth and migration – and other variables are affecting financial inclusion. Check out the Data Explorer, here.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
There’s no arguing that quality data is essential to achieving full financial inclusion. But of course if we want data to have an actual impact, it’s what we do with it that counts. The new Financial Services for the Poor (FSP) Interactive Map from the Bill and Melinda Gates Foundation incorporates financial inclusion data, country-specific supply-side data to be exact, into an interactive map with the aim of helping to identify gaps in access to financial services, to assist in designing policy, and to inform decision-making.
The tool uses GIS location data on financial access points – commercial banks, ATMs, microfinance institutions, mobile money agents, credit institutions, and post offices, among others – layered onto high resolution maps to create a visual representation of the financial services landscape for a given country. In addition to access points, the tool is able to display a country’s mobile coverage, urban areas, state lines, poorer areas, and population densities. The map is outfitted with a calculation tool that lets you generate numbers on financial services access, broken down in a number of ways including percentage of population covered, and urban or rural area. The countries currently available are Nigeria, Uganda, and Tanzania. Here’s a video of the tool in action.
The Power of Mapping Financial Services Data, a paper that describes the tool in greater detail and offers ideas on how it can be used to inform decision-making, was released last month. The paper lists the following points, broken down by stakeholder types, for how it might be used. Read the rest of this entry »
> Posted by Jeffrey Riecke, Communications Assistant, CFI
A community health worker in Kenya trained by Pathfinder International, using a mobile phone to collect client data. Photo by Sala Lewis.
Each year billions of dollars in cash payments are distributed by development organizations to individuals in need. Across sectors including agriculture, health, and emergency relief, cash payments are dispersed with the intent of imparting a lasting impact on their recipients. As we’ve discussed in this space previously, dealing with cash instead of electronic payments brings risks and inefficiencies to the parties involved, both development organizations and their payments recipients, too, who are likely to have a lot at stake.
Visa, in partnership with NetHope, a consortium of more than 40 humanitarian organizations, is addressing this opportunity to improve development organizations’ payments systems through the Visa Innovation Grants Program, a new initiative providing funding to development organizations for the modernizing of their payments systems. A few weeks ago the program selected the five winning organizations, who will each receive $US 100,000 for their projects. Representing a breadth of sectors, the five organizations are Agribusiness Systems International (ASI), Freedom from Hunger, International Federation of Red Cross and Red Crescent Societies (IFRC), Mercy Corps, and Pathfinder International.
The payments system projects of ASI and Mercy Corps focus on developing mobile money services for farmers and other actors in agriculture value chains. ASI is working with rice farmers in Ghana, and Mercy Corps with smallholder farmers in Indonesia. The payments systems allow farmers to receive timely and secure payments from agricultural cooperatives electronically, rather than by traveling to pick up cash, which requires expending resources, including time that could otherwise be spent tending the farm.
> Posted by Sonja E. Kelly, Fellow, CFI
The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
As people age, their use of financial services changes. We explored this in detail when we published a lifecycle approach to financial services in Peter Kasprowicz and Elisabeth Rhyne’s Looking Through the Demographic Window. People of working age need to plan for the future while also providing for their families in the present. People who are elderly need to be able to draw on their savings, manage their wealth, and in many cases, draw on and use their pensions.
When we look at the world as a whole, we see little difference between bank account ownership among the working age population (defined as ages 25 to 64) and those who are older (age 65+):
Source: World Bank Global Findex Microdata, 2012
This global equality between the two age groups masks interesting variation in regions in account ownership by age. In Sub-Saharan Africa and East Asia and the Pacific, a much higher percentage of working age adults than older adults have accounts, while Latin America and the Caribbean shows little difference between those groups. Read the rest of this entry »
> Posted by Lisa Kuhn Fraioli, Independent Consultant
When Meri was first interviewed by Freedom from Hunger for its impact stories research in 2008, she was a classic microfinance success story. This hard-working mother of five from Huancayo, Peru had a successful business buying grains in the local market, milling them, and processing them into a type of custard that she then sold in Lima at a good price. The loans that Meri received from her local microfinance organization allowed her to buy more grain, invest in new products, and transport them for sale in Lima. The loans had helped Meri grow her business beyond the subsistence level for the first time. She now had a profit that she invested in food, healthcare, and education for her children.
When interviewers returned to Meri in 2011, the story had turned into a tale of desperation and distress. Now, Meri says, “I try to sell underwear and socks, but it almost never goes well. We are hungry. Sometimes there isn’t enough food. It’s very rare that we buy meat, and what I prepare, I give to my daughters and hope that my husband brings something to eat.” She is no longer able to send all her children to school. What happened to Meri?
After the birth of her fifth child, Meri suffered an internal hemorrhage and was hospitalized. The doctor warned her that her condition was very delicate and that she could no longer make the eight-hour trip to Lima to sell her products. Unable to travel, she reluctantly shut her business down. Meri’s family’s sole source of income was now the few soles that her husband brought in as a shoeshine. Meri owes the hospital for her emergency treatment and used money from her business loan to help pay for it. Then she borrowed from a bank, the municipality, and two more microfinance organizations. Meri can’t find any new business that gives her stable income. Meanwhile, her debts weigh upon her heavily. She is still in pain, but she can’t afford the 15 dollars it would cost for an ultrasound. She says, “It seems that the stress is accumulating in my stomach. Every day it hurts me as if the anxiety were taking away my potential.” Meri, overdebted with no means to repay her loans, is now effectively excluded from the financial system as a poor credit risk. She is still struggling to get back to the economic position she was in 10 years ago. She needs to develop a new business, one less dependent on traveling, but she will have to do so without any help from microfinance.
> Posted by Alyssa Passarelli, Communications and Operations Assistant, the Smart Campaign
In early June, the Smart Campaign traveled to Panama for a Steering Committee meeting and a Certification workshop, back-to-back with the annual Social Performance Task Force meeting, an event attracting over 300 microfinance practitioners and supporters.
In between all of the meetings Neal Kennedy and Eric Zuehlke from the CFI communications team caught up with event attendees to better understand how stakeholders are using the Client Protection Principles (CPPs) and why they think the work of the Campaign is important. We are pleased to release a series of interview videos in which these partners, stakeholders, and friends of the Campaign speak about their relationship with client protection.
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