You are currently browsing the monthly archive for March 2016.
> Posted by Beth Porter, Financial Inclusion Policy Advisor for the United Nations Capital Development Fund (UNCDF) and the Better Than Cash Alliance
The following post was originally published on the Better Than Cash Alliance blog and has been re-published with permission.
Did you ever wonder why there is not International Men’s Day? There actually is such a day, by the way—it’s on November 19th, but there aren’t too many people marking it with a night off from cooking or cleaning or childcare for the guys!
The reason we celebrate International Women’s Day on March 8th each year is that the other 364 days look quite a bit like men’s days. In fact, globally, women spend an average of 4.5 hours a day on unpaid work, while men spend less than half that much time—and the unpaid labor gap is particularly large in developing countries. We are a long way from Planet 50:50 or gender parity. Indeed, the World Economic Forum predicts that the gender gap will not be closed until 2133.
This lack of parity manifests itself in many ways, including gaps in education, employment, and wages, and in the board room and public high office. And access to finance is no different.
While globally ownership of accounts is on the rise, the gender gap persists in developing countries, with the majority of the 2 billion globally without access to finance being women. We should not simply conclude that women do not want accounts—just as we cannot suppose that they do not want more education, the opportunity for gainful employment, or equal wages for equal work. We know that women living in a cash-only economy do not have adequate control over their finances, do not have the confidentiality they need to save and borrow and can only make or receive payments at others’ convenience, not their own. Wouldn’t a more plausible conclusion regarding the gender gap in financial inclusion be that women face barriers that men do not encounter in accessing financial services? Let’s explore this idea a bit further.
> Posted by Center Staff
Today, around the world individuals, governments, and organizations are celebrating women and calling for increased action towards gender parity, including in the financial services arena. And for good reason. Research indicates that when women control finances, they’re more likely to be spent on household necessities, like food, water, and children’s education and healthcare. In recognition of International Women’s Day, we compiled some of our favorite recent industry efforts to further financial inclusion for women. But first, here’s a quick run-down of where inclusion for women stands.
The Global Findex tells us that there is a gender gap in access to accounts at seven percentage points globally (65 percent vs. 58 percent), and across developing countries it’s nine percentage points. In some regions, this gap is significantly more severe – 18 percent in South Asia, for example. Gender gaps exist in other areas, too. GSMA estimates that in developing countries there are 200 million fewer women than men who own a mobile phone. And as one example of the gap in financial capability, in the World Bank Group’s 2014 Financial Capability Survey in Morocco women scored significantly lower than men.
Prioritizing financial inclusion for women is not only the right thing to do, it benefits everyone. In addition to benefitting women and women’s households, financial inclusion of women augments economies writ large. About half of women worldwide are missing from the workforce. In Egypt, for example, the IMF estimates that achieving equal labor participation among men and women would increase GDP by 34 percent. The IFC estimates that women-owned businesses have an unmet financing need of $320 billion worldwide.
Many organizations are working to close the gap:
> Posted by the Smart Campaign
What do microfinance clients in Peru think about their experiences with financial services? A few weeks ago the Smart Campaign released its Client Voices reports, a four-country research investigation that directly asked microfinance clients about their experiences. After previously spotlighting Benin, Georgia, and Pakistan on this blog, today we’ll take a look at findings from the fourth country in the project, Peru.
The research was carried out by Bankable Frontier Associates (BFA) and IPM Research. A qualitative research phase was first conducted, which included focus group discussions, individual interviews, and a photography exercise to allow clients to visually describe how they view good and bad treatment. The quantitative survey that followed included a sample of 1,000 current and former microfinance clients.
What did the clients say? In Peru, a well-regulated market, a different set of problems emerged from those we found in less-protected Benin and Pakistan. While severe abuses have been curtailed, emerging problems in Peru tended to arise from aggressive competition for customers.
Overall, clients in Peru are satisfied with their providers, suggesting that they’re benefitting from the industry’s well-regulated, competitive market and effective credit reporting system. Less than 10 percent of respondents rated their experiences with microfinance providers as either “bad” or “very bad”. In an exercise where respondents ranked various formal institutions in terms of how they treat clients, microfinance providers scored above commercial banks.
> Posted by Center Staff
Readers of this blog hear a lot about fintech, and there are many discussions in the financial inclusion space about how technology-enhanced business models will lead to full financial inclusion. But beyond our circle fintech is hardly a household word. At least in the United States, for example, people talk a lot more passionately about their phones, their computers or their cars. Fintech, however, is coming to the fore. More and more we hear about P2P payments via outfits like Venmo, contactless merchant payments like Apple Pay, and online lenders like Lending Club. And in 2016, fintech is making its way onto a few big, relatively mainstream stages.
Next weekend, the film, music, and interactive media industries descend on Austin, Texas for the annual South by Southwest (SXSW) Festivals. SXSW is a launch pad for new creative content, including film screenings, concerts, trade shows, networking opportunities, and emerging technology showcases. For the first time, the fintech industry will be part of the action.
> Posted by Andrew Fixler, Freelance Journalist
Consolidation and investment in coffee brands is reaching a fever pitch, according to Andrew Daday, Director of Coffee for Stumptown Roasters. Coffee is the second-most traded commodity in the world, and the modal coffee farmer is a smallholder living near or below the poverty line, resulting in unique value chains in Latin America, East Africa, and Southeast Asia. These value chains are characterized by factors like the commodity coffee markets, agronomics, organization/associations of growers, government coffee marketing institutions, and the state of rural financial services. Specialty coffee is characterized by meeting particular quality standards. Specialty coffee production allows some farmers to escape the vicissitudes of the commodity coffee market and to capture value commensurate with their product’s quality and input costs. In the United States, 55 percent of the 48 billion dollars of coffee retail value consumed falls into the specialty category – representing immense growth in recent decades. If bullishness ratifies the growth prospects for high-end coffee in the U.S. and abroad, it is worth looking into how scaling will manifest at the agricultural end of the value chain, because the relationships coffee farmers have with downstream firms impact their well-being in a number of ways, including via their access to financing.
Agriculture finance for smallholders can be an operationally-intensive, high-risk enterprise. However, financial institutions like the Netherlands’ Rabobank and Mexico’s Banorte express that agricultural credit is especially viable and profitable if “producers are well-integrated into a viable value chain.” Linking into a larger firm’s supply chain is a boon to small business growth in many contexts. Besides serving as a “springboard for growth” for small businesses from increased market access, buyer-supplier linkages yield exposure to key industry information and data points along the value chain that contribute to better capital allocation and financial accessibility for qualified entrepreneurs. Linking with a value chain may also enable a transition from informal lending, which can rely overwhelmingly on local knowledge for underwriting, to the formal financial services sector.
> Posted by Allyse McGrath, Senior Associate, CFI
Readers of the 2015 Global Microscope, which spotlights the quality of the policy environment for financial inclusion, often focus on the countries at the top of the pack. However, some of the largest improvements in this year’s report are happening towards the bottom of the ranks. This trend appears on a regional scale, with the Middle East and North Africa, the region with the collective lowest scores, showing the most improved scores in this year’s issue of the Global Microscope. In this region, Egypt serves as an example of a country making huge strides even though it’s not among the top 10 countries. In fact, it scores among the very lowest handful of countries.
Up two spots from 53 to 51 out of 55 total markets this year, Egypt improved its score in 7 of the 12 Microscope indicators. The 8-point jump overall can be attributed to many factors, most notably the government’s introduction of a new regulation which broadens financial supervisory to a burgeoning microfinance sector and its welcoming of new electronic payments experiments.
In November 2014, the Egyptian Government enacted Law no. 141, more commonly known as the “Microfinance Law”, which created provisions for regulating MFIs in the country, previously excluded from the legal framework. This law expanded the reach of the Egyptian Finance Supervisory Authority (EFSA) which now has control over issuing licenses to microfinance institutions in Egypt. After the law’s issuance in 2014, the number of MFIs in Egypt rose from 400 to 640. By the end of 2015, EFSA reported that it had issued 253 licenses. The law which is aimed at ensuring efficiency, transparency, and risk management also includes a list of “Executive Decrees” by which licensed institutions must abide.
Facebook
Twitter
Recent Comments