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We discuss emerging consumer risks posed by nano-loans through the frame of the Client Protection Principles.

> Posted by Alex Rizzi, Senior Director, The Smart Campaign

As champions for financial inclusion, the Smart Campaign is excited about the potential of nano-loans—small value loans, delivered through mobile phones, with a large concentration of deployments in East Africa. Nano-loans are available nearly instantaneously, leverage non-traditional data for underwriting, and can be disbursed and collected with minimal human interaction. These tiny loans can help underserved customer segments access credit, as well as meet short-term liquidity crunches. But as consumer protection advocates, we also want to ensure that these loans are delivered with quality and respect, and do not cause harm to consumers.

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> Posted by Iftin Fatah, Investment Officer, Overseas Private Investment Corporation

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The 2017 Annual Impact Investor Survey from the GIIN showed that respondents, which make up a diverse and active group of impact investors, committed more than $21 billion to impact investments in 2016 and planned to commit 17 percent more capital than that in 2017. Geographically, however, the Middle East and North Africa (MENA) only makes up 2 percent of assets under management.

Islamic finance is largely concentrated in three markets – Iran, Malaysia, and Saudi Arabia – but it spans nearly every part of the world, including MENA, Asia, and sub-Saharan Africa. For its part, Islamic finance has grown over the past two decades, with total assets reportedly totaling roughly $2 trillion. Despite this growth, Islamic finance still makes up a small share of the global financial market. These two areas of Islamic finance and impact investing are ripe for potential collaboration. Out of the 1.6 billion Muslims in the world, 650 million are living on less than 2 dollars a day.

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> Posted by Rupert Scofield, Chair of the Partnership for Responsible Financial Inclusion (PRFI)

A meeting of the Partnership for Responsible Financial Inclusion in September 2017 (pictured from left to right: Shameran Abed, Jesse Fripp, Steve Hollingworth, Maria Cavalcanti, Michael Schlein, Sharlene Brown, Rupert Scofield, and Robert Dunn. Not pictured: Christian Pennotti, Mary Ellen Iskenderian, and Michael Mithika)

In 2011, I joined the inaugural meeting of CEOs that led to the formation of the Microfinance CEO Working Group. Nearly seven years later, my colleagues and I have continued to enjoy the trust and collaboration made possible by sitting together and sharing our strategies, challenges, and opportunities. We have encouraged the sharing of information among key senior staff in seven departments such as risk management, social performance, and digital financial services, across our networks. This collective of senior managers, which we refer to as peer groups, find the conversations at their levels insightful and that they allow for greater efficiency at solving common problems. In some cases, members benefit from non-proprietary work and processes developed by another. In other cases, we are creating the solutions together. Today, we truly recognize that we are no longer a working group, but a strong partnership committed to advancing financial inclusion in a responsible manner. It is my pleasure to share our new name: Partnership for Responsible Financial Inclusion (PRFI).

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> Posted by Richard Shumann, COO, the Vitas Group

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I learned a hard lesson in 1996. I was managing a provincial office for an international NGO, serving internally displaced people in southern Africa. I paid a surprise visit to a food distribution site, and saw beneficiaries were not getting their full rations. I checked the warehouse and discovered our food distribution manager had been selling food aid on the side. I informed the country director, and the distribution manager was fired. When I explained to my deputy what had happened, he shook his head and said, “The boss is always the last to know.”

As I worked in microfinance as a consultant, manager and board member, I worried about how CEOs, boards and shareholders learned what was really going on in their institutions, instead of just hoping managers got away from their desks, actually found fraud, and reported it.

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> Posted by Elisabeth Rhyne, Managing Director, Center for Financial Inclusion at Accion

The following post was originally published on NextBillion and has been re-published with permission.

Two books published this year, The Financial Diaries, by Jonathan Morduch and Rachel Schneider, and The Unbanking of America, by Lisa Servon, take on the state of financial inclusion in the United States. Given the professional standing of their authors, we can expect that these books will contribute substantially to the body of knowledge on financial inclusion. What is perhaps more surprising is just how broadly important their messages are. Both books examine what is arguably the top economic challenge in America today – the crumbling of the economic foundation for many working-class and middle-class families – and they do so through the lens of financial services, a somewhat unusual but very revealing perspective.

The Financial Diaries: How American Families Cope in a World of Uncertainty focuses on the variability of income and expenses, which makes it hard for an increasing number of Americans to maintain a steady standard of living. The weekly and monthly extent of this volatility eluded most national statistics until the Diaries project, with its unique methodology, which was developed initially to study financial behavior in low-income countries. During a Diaries project, researchers record every financial transaction made by participating families each week for a year. This detailing yields intimate portraits of families’ financial lives at a level of magnification not previously available.

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> Posted by Center Staff

With Financial Inclusion Week 2017 less than two weeks away, we’re excited to share a full calendar of events and specifically, 11 webinars or online events that you can join from wherever you are. Topics include micro pensions, IndiaStack, interactive voice response technology, and more. Don’t pass up an opportunity to hear from organizations and experts from around the world – register today!

Monday, October 30

Digital Fireside Chat: How Are New Products and New Partnerships Unlocking Access to Insurance?
Hosting Organizations: AXA, Center for Financial Inclusion at Accion
To kick of Financial Inclusion Week 2017, Elisabeth Rhyne, Managing Director of the Center for Financial Inclusion at Accion will join Garance Wattez-Richard, Head of AXA Emerging Customers for a digital fireside chat. During the webinar, Rhyne and Wattez-Richard will discuss how new products and partnerships are opening up new potential in the inclusive insurance space. They will take a specific look at how AXA is working to reach emerging customers.

Technology-Enabled Financial Inclusion in Myanmar
Hosting Organizations: ThitsaWorks, Internet Journal
ThitsaWorks and Internet Journal will host a Facebook Live conversation on the impact of digital services on financial inclusion in Myanmar, where mobile phone ownership has grown rapidly from 5 to 90 percent between 2011 and 2017.

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> Posted by Jeremy Gray, Engagement Manager, Cenfri

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Why is it that 80 percent of bank account holders in Madagascar only use their accounts once a month or less?

What makes the parents of a child requiring unforeseen medical treatment in the DRC choose to approach their mutualitée (a local form of informal mutual aid society) for a loan despite access to a microfinance institution or local bank?

If a Zimbabwean has a mobile money account, why does he ask a family member to send him money in the care of a bus driver rather than through that mobile account?

The gap between uptake and usage is well documented in financial inclusion. But while these insights are important evidence of the gap, they tell us very little about why this gap exists. The result is that we know there is a problem, but without understanding why, we can do very little to change the problem.

To help us better understand the why, we at insight2impact (i2i) have been exploring the factors that affect usage. In doing so we have incorporated insights from across multiple fields on human decision-making and applied the most relevant aspects of existing models and understanding to the field of financial inclusion.

Decision-making is important for both financial service providers (FSPs) and policymakers to understand, but it isn’t simple, and, typically, our decisions are not based on one single factor. Furthermore, psychology and behavioral economics have illustrated that in some cases we are not even cognitively aware of many of the important factors that influence our decisions.

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> Posted by Center Staff

Financial Inclusion Week 2017 is just over two weeks away. From October 30 – November 3, over 50 organizations will host online and in-person events across the globe, exploring the theme New Products, New Partnerships, New Potential.

We are excited to announce the AXA Group is a track partner for the Week. The AXA Group, a world leader in financial protection, supports its individual and corporate customers at every stage of their lives, providing them with the products and services that meet their insurance, personal protection, savings and wealth management needs.

A full calendar of Financial Inclusion Week events will be launched on October 17th, but here is a quick preview: Read the rest of this entry »

> Posted by Emma Morse, Project Specialist, CFI

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Mavis Wanczyk, a staff member at Mercy Medical Center in Springfield, Massachusetts and a mother of two, recently became a multi-millionaire, revealing herself as the $758.7 million Powerball jackpot winner – the largest individual winner ever. Wanczyk quit her job of 32 years less than 24 hours later.

Reflecting on her decision, Wanczyk remarks, “I was just there to buy it, for just luck. Just go in, buy a scratch ticket, and say maybe it’s me, maybe it won’t be me. It’s just a chance, a chance I had to take.”

The odds of winning the Powerball jackpot are 1 in over 292 million. In order to purchase all of the possible combinations, an individual would need to spend $584,402,676 on tickets. You are about 100,000 times more likely to be struck by lightning at some point in your lifetime than you are to hit this particular jackpot.

So why do Americans spend $70.15 billion on lottery tickets annually, while very few of us live in fear of being struck by lightning? Read the rest of this entry »

> Posted by Rachel Morpeth and Danielle Piskadlo, Analyst and Director of the Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion 

The following post was originally published on the Microfinance Gateway.

As a hub of technology-based innovation, sub-Saharan Africa (SSA) leads the world in mobile money accounts. 12 percent of adults in the region have a mobile money account, compared to 2 percent globally. In a recent global survey measuring progress towards financial access and usage, five of the ten highest scoring economies hailed from SSA. However, financial exclusion remains acute.

The fact that most of Africa’s population lacks access to formal banking services but has one of the highest mobile penetration rates in the world provides the perfect breeding grounds for the use of financial technologies to grow a customer base. However, as disruptive technologies and business models continue to revolutionize the financial inclusion landscape in Africa, they present new challenges to leaders and boards.

These challenges can only be overcome through creative, forward-thinking solutions and active dialogues across governance bodies – boards and regulators. Board members, CEOs, regulators and fintechs will come together to advance these issues in Ethiopia on October 12-13 at the Center for Financial Inclusion at Accion’s (CFI) Governing in a Digital World roundtable, a side event to African Microfinance Week. In the meantime, let’s take a quick look at a few of the challenges to be discussed, and their respective solutions.

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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.