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> Posted by Damian von Stauffenberg, Founder, MicroRate
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
Why is it that microfinance has grown at such an explosive pace while other development initiatives, which originally looked just as promising, have languished? What’s different about microfinance?
In development, we too often see efforts that look good, but that lack life. Let me offer an analogy in which a tree symbolizes a development project. In this example, a development agency could decide to simply build the tree. To do so, it finds some leaves and pastes them on branches. It then pastes these branches onto a stump, and finally it drills holes for some roots into the stump. If it is skillfully done an impressive tree will result that can be inaugurated, photographed and featured in the agency’s newsletter.
The problem is of course that this tree, though beautiful to behold, is not alive. We have created something that will not grow. To the contrary, eventually it will disappear. All of us have seen such “trees” in the world of development. Read the rest of this entry »
> Posted by Monique Cohen, Founder and President of Microfinance Opportunities
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
If financial services are a means to an end, then financial education is a means to a means.
Let me explain. Generally speaking, we see a link between financial services and clients meeting their financial goals. Taking one step back, however, we see that financial education facilitates the success of financial services.
Clients don’t always know what is possible, which limits their ability to make good choices. Financial education is a way of showing clients what is possible. With this knowledge, they will be better able to choose and use financial services.
Let’s take cell phone banking. Because cell phone banking makes services accessible to people in remote locations, many of the people who want to take up cell phone banking have never had a bank account. They may not understand the concept behind banking. Unless we engage in financial education, we are asking them, unfairly, to leap-frog both into a new technology and a financial system that may be unfamiliar, intimidating, and confusing.
Financial education does have a role in helping us to increase the use of our products, yes. But, as Larry Reed mentioned in this forum, it also plays a role in educating us, the providers. I argue that the exercise of financial education forces recognition of the gaps in our customers’ comprehension of how financial products can help them achieve their goals. Read the rest of this entry »
> Posted by Guy Stuart, Ph.D., Senior Advisor, Microfinance Opportunities
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to Sonja E. Kelly, Fellow, Center for Financial Inclusion at ACCION International.
My work using the Financial Diaries methodology has made me very cognizant of how much cash low-income people handle daily – more cash, in real terms, than a middle-income person in a developed country handles. If we are to increase financial inclusion by increasing low-income individuals’ use of savings products, we have to find ways to channel some of the large amounts of cash they handle into those products, in ways that they value. Monique Cohen and I have written about this in our recent article “Channeling Cash: Towards a New Business Model for Low-Income Savings Mobilization.”
In the article, we first had to step back and define what we really meant by savings. In the paper, we assert that low-income people use savings for three different purposes: Read the rest of this entry »
> Posted by Susy Cheston, Senior Advisor for the Center for Financial Inclusion at ACCION International
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to Sonja E. Kelly, Fellow, Center for Financial Inclusion at ACCION International.
“Are we talking to ourselves? Who is not represented in this conversation?”
That was the question that Beth Porter from the United Nations Capital Development Fund asked at our first Financial Inclusion Roundtable, held in New York. Many of the participants nodded in agreement, and Bob Kennedy, sitting next to me, whispered, “plus one.”
“Plus one.” It is the shorthand we use when we see an invitation that reads “and guest.” We bring our “plus one” to a party or event, introduce them to our friends, and make them feel welcome. Our “plus ones” expand the community with new energy, new ideas, and new connections. Read the rest of this entry »
> Posted by Barbara Magnoni, President of EA Consultants
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to Sonja E. Kelly, Fellow, Center for Financial Inclusion at ACCION International.
When I was first asked to reflect on the Center for Financial Inclusion’s Opportunities and Obstacles paper, I immediately began thinking of the practical implications for providers of turning the survey responses into actions.
The diverse list of opportunities and obstacles that were highlighted in the survey shows just how dynamic the process of action toward financial inclusion must be. Read the rest of this entry »
> Posted by Larry Reed, Director, Microcredit Summit Campaign
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
Does the ambition of the Center for Financial Inclusion’s (CFI) Financial Inclusion 2020 initiative include reaching people with little income who live in remote places—places far from urban centers with their financial institutions and communications hubs? That’s what the website says; it states that (emphasis mine): Read the rest of this entry »
> Posted by Camilla Nestor, Vice President of Microfinance Programs at Grameen Foundation
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
In five years, how will the poor be accessing financial services? If we could step back in time to 2006 with the microfinance sector scaling rapidly across the globe, it would have been hard to imagine that today mobile money users would outstrip all banked individuals in some countries, or that in other countries commercial banks would have overtaken microfinance institution (MFI) outreach to the poor in just a few years.
CGAP reports that 2.7 billion people globally remain unbanked around the world, a gap that requires a depth and breadth of financial services to truly address. We’ve learned that scale alone is not the answer; it must be accompanied by approaches that keep client well-being at the center. However, we still have not found an approach that meets this challenge in a way that addresses both scale and client needs at the same time. There are a number of intriguing scenarios for how the poor could be accessing appropriate financial products and services in the future, all of which draw on players beyond the traditional microfinance space. Here are three potential scenarios: Read the rest of this entry »
> Posted by Bob Kennedy, Executive Director of WDI and Tom Lantos Professor of Business Administration, Ross School of Business, University of Michigan
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
Last month, Citi Foundation hosted a very interesting day-long roundtable that focused on the Center for Financial Inclusion’s (CFI) report on “Opportunities and Obstacles to Financial Inclusion.” Citi Foundation’s Graham MacMillan posted on the report when it was issued in July.
This is an important report because it raises significant issues for the microfinance sector, and I strongly recommend that anyone interested in microfinance, poverty reduction, or “development through enterprise” read through it (download free pdf version here). Co-authors Elisabeth Rhyne, managing director of CFI, and Anita Gardeva, CFI senior analyst, conducted a comprehensive survey of industry participants to get their views on “how to make full financial participation a reality.” Read the rest of this entry »
> Posted by Lisa Hall, President & CEO of Calvert Foundation
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at ACCION International.
In September, I had the opportunity to participate in a dialogue with more than 45 other participants as part of a roundtable hosted by ACCION’s Center for Financial Inclusion. The purpose of this new blog is to continue the conversation we started that day – and I am honored to be the first to post here.
At Calvert Foundation, we often talk about impact investing as a virtuous circle, one that creates empowerment, opportunity, and engagement by connecting investors, underprivileged individuals, and communities. This connection – to me – is the ultimate goal of financial inclusion. It’s about a connected circle of people, with mutual benefit for all the stakeholders involved, and with clients at the center. Read the rest of this entry »
> Posted by Sonja E. Kelly
The Center for Financial Inclusion at ACCION International has set an audacious commitment to build toward full financial inclusion by 2020. As part of this movement, we are starting a conversation on this blog. We look forward to what will come out of this.
In September, we began a series of roundtable discussions aimed at deepening the consensus around the steps to reach full financial inclusion by the year 2020. In each roundtable, experts from the microfinance industry consider the Center’s report on the “Opportunities and Obstacles to Financial Inclusion.” Participants include providers, investors, donors, regulators, academics, and other industry influencers.
With this post we are taking that process virtual and kicking off a blog series on financial inclusion.
We hope this series will deepen our understanding of financial inclusion, using the year 2020 as a target date to help galvanize our thinking, and exploring the implications of the Center’s definition of full financial inclusion:
Full financial inclusion is a state in which all people who can use them have access to a suite of quality financial services, provided at affordable prices, to clients who are financially capable, in a convenient manner, and with dignity for the clients. Financial services are delivered by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, and rural populations. Read the rest of this entry »
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