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> Posted by Center Staff

What’s better than blog posts? As a blogger, I’m inclined to assert that nothing is in fact better than blog posts. Alas, with self-awareness, I think we can all agree that interactive websites are cool. And that interactive websites about client protection in microfinance are especially cool!

Created by Nathalie Assouline of Alia Développement, a new interactive website offers users a media-rich experience for learning about the development of the microfinance industries in Cambodia and Morocco, with a special focus on client protection.

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> Posted by Sonja Kelly, Director of Research, CFI

We’ve been running the CFI Fellows Program for almost two years, with generous funding this year from the Rockefeller Foundation. The program has been a terrific experiment for many reasons. Now, while our current cohort of fellows is hard at work conducting their research, is a great time to stop and share some lessons we’ve learned along the way. The findings emerging from the program have also quickly become part of the continued learning and development of our expertise as an organization. Our staff engage closely with the fellows as they work, drawing from and contributing to their expert-level knowledge. And, on a personal level, I have come to understand financial inclusion in new ways.

As we’ve sourced topics, selected fellows, and engaged with knowledge communities, we have learned a great deal about people, organizations, technology and global trends. (You can see some of the specific findings coming out of the program here.) We also have gleaned observations about the nature of inquiry in financial inclusion, who cares about deeply understanding financial inclusion, and why financial inclusion matters.

Here are the top 10 things that I’ve learned thus far in the process of working on the CFI Fellows Program.
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> Posted by Daniel Balson, Lead Specialist for Eurasia and MENA, the Smart Campaign

(click to enlarge)

Smart Certification requires a substantial commitment from the financial institutions that choose to seek it. These institutions face a thorough audit by an independent third-party and may be required to improve client-related policies and practices at multiple levels, drawing in staff from the executive suite to the field offices.

In short, is it worth it? Why would a financial institution elect to participate in such a program – especially if the institution is operating smoothly?

A new survey conducted by Deutsche Bank and the Smart Campaign captures the perspectives and experiences of over 24 Smart Certified institutions and yields insights on why nearly 80 financial institutions around the world have achieved Smart Certification, with many more on the path to be certified.

The surprising result is that in addition to the benefit of publicly affirming that financial institutions treat their clients well, Smart Certification helps energize corporate culture and shift it toward client-centricity.

First off, Smart Certification allows financial service providers to distinguish themselves from the competition by demonstrating to their market and the industry that they provide a higher level of service to their clientele. Smart Certified institutions have to exhibit to independent auditors that at every stage from product design through customer acquisition and service delivery, they are governed by standards that ensure clients are treated fairly. Financial institutions have found a wide audience for their newly certified status. Half of all certified institutions reported that their regulators took positive and formal notice of their certification. Additionally, the majority reported positive media attention.

Respondents agreed that the biggest benefit of Smart Certification was in helping them see the world from their clients’ perspective and infuse client protection into the DNA of their operations. Over 90 percent of certified financial institutions agreed that Smart Certification has helped them prioritize their clients’ rights and reshape their institutional culture around client protection.

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> Posted by Iftin Fatah, Investment Officer, Overseas Private Investment Corporation (OPIC)

sewingLimited access to credit in the developing world is often exacerbated by conflict, which presents a strong demand for microfinance. In Iraq, for example, only 11 percent of adults hold an account at a formal financial institution, according to the 2014 Global Findex. The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, is helping to build a more inclusive financial sector in Iraq through its partnership with Vitas Iraq, a subsidiary of Global Communities, which is a non-profit development organization that partners with local stakeholders across a range of topic areas. Vitas Iraq established Al Tamweel Al Saree LLC (ATAS) as the financing vehicle to support expansion of its operations. In 2012, OPIC provided ATAS with a direct loan to enable the expansion of Vitas Iraq’s portfolio of loans to individuals and to micro, small and medium-sized enterprises (MSME), thereby expanding financial access in Iraq.

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> Posted by Center Staff

Last week the Kenyan government officially kicked-off Huduma cards, a fintech initiative aimed at bolstering government services in the country and digital financial inclusion. The program leverages partnerships with Mastercard and a handful of prominent banks. If successful, the new cards will simultaneously improve the government’s functioning, enroll more citizens in key government services like health insurance and social security, and provide digital financial services to many unbanked Kenyans.

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> Posted by Jeffrey Riecke, Communications Specialist, CFI

If you had to embark on a journey similar to that of the 65 million people who are currently forcibly displaced, what would you bring? Most likely among your provisions would be a smartphone. Phones are the contemporary map and compass, a gateway to critical information, a means for keeping in touch with loved ones, and a financial toolkit. More and more, aid workers are witnessing refugees arriving at camps with smartphones. For both the refugee journey and the post-journey settlement process, a phone can be vital. With this in mind, you might not be surprised to learn that mobile money usage among refugees, including for cash transfers from governments and NGOs, is on the rise.

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> Posted by Carmen Paraison, Project Associate, the Smart Campaign

On January 18th, 2017, the Consumer Financial Protection Bureau (CFPB) filed suit against Navient, the largest federal and private student loans servicer in the U.S., for “systemically and illegally failing borrowers at every stage of repayment.” Allegations include:

  • Misallocating student loan payments by failing to follow instructions from borrowers about how to apply their payments across their multiple loans.
  • Steering struggling borrowers toward multiple forbearances instead of lower payments via income-driven repayment plans. (Forbearance is an option that lets borrowers take a short break from making payments, but that still accrues interest.)
  • Providing unclear information about how to re-enroll in income-driven repayment plans.
  • Deceiving private student loan borrowers about requirements to release their co-signer (e.g. a parent or grandparent) from their loans, which can be advantageous given some lenders’ practices surrounding the death of a co-signer.
  • And failing to act when borrowers complained.

Navient currently services more than $300 billion in loans for more than 12 million borrowers.

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> Posted by Center Staff

(The following post is the second in a two-part series on Modelo Perú. You can find part one here.)

On February 16, 2017, Modelo Perú, a first-of-its kind payments initiative in Peru, will mark its one year anniversary. The initiative established an interoperable nationwide payments platform, Bim, with a particular focus on expanding access to underserved customer segments. Thirty three institutions, including microfinance organizations, commercial banks, and telecos, are participating in the platform, which was spearheaded by the Bankers’ Association of Peru (ASBANC). The interoperable mobile money platform is already a financial services feat. But we’re likely to see big changes between now and its second birthday.

CFI, in partnership with the Institute of International Finance (IIF), produced an issue brief exploring the progress and challenges the program has faced thus far, based on interviews with stakeholders. Last week, in part one of this blog series, we presented the challenges that have hindered the platform’s implementation to this point. This week, we look ahead to promising solutions to these challenges. Pagos Digitales Peruanos (PDP), the company running the platform, is currently recalibrating its goals while developing tailored solutions to each of the issues that have emerged. Below, we share an overview of four solutions PDP is exploring.

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

It is 2017. Why would millions of women around the world feel the need to march for equality? Is half the world’s population actually oppressed? Let’s take a look at the financial inclusion gender gap. And given the relationship between financial inclusion and financial health, let’s also examine how the financial well-being of women is systemically compromised. Here are some of the ways that our financial worlds exclude or marginalize women, ultimately resulting in their being more financially vulnerable and more likely to live in poverty than men. In outlining these ways I pull heavily from an Ellevest guide called “Mind the Gap”, which highlights and quantifies a number of ways women in the United States still face financial inequalities. Though these Ellevest figures are for the U.S., these gender gaps are even more prevalent in nearly all other countries around the world.

1. Gender pay gap – The range varies, with women of color making less, but on average, women in the U.S. make 78 cents to every $1 a man makes. This stems from a number of things, including implicit gender biases and the fact that women are less likely to ask for raises (and when they do, they are more likely to be punished in the workplace for it – see evidence here and here). This current reality costs the average woman in the United States $1,300,000 over her lifetime!

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> Posted by Ellen Metzger, Consultant

With stories of fintech success and excitement showing up everywhere, it’s hard not to wonder about the place of banks in the financial landscape of the future. Are fintech providers here to stay or are they the buzz of the day?

The chief officer of finance, innovation and payments at Equity Bank in Kenya, John Staley, strongly stands in favor of banks. He recently argued that banks are in it for the long-term and that fintech companies will come and go – or get absorbed by the banking industry.

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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.