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What if we opened millions of bank accounts but nobody used them? That is one of several conundrums raised by the recently released Global Findex data for 2017.

> By Elisabeth Rhyne and Sonja Kelly, Center for Financial Inclusion at Accion
This post originally appeared on Next Billion’s blog and is reposted here with permission.

geographic distribution of 3 billion people without active accounts, 2017
About 3 billion people in the world either have no account or have an account that sits unused. The countries with the largest number of financially excluded people are also the highest population countries: India and China. This picture has changed little in the past three years.

The Global Financial Inclusion Database (Findex) is a survey of the financial habits of adults in 144 countries with data from 2011, 2014 and now (2017). Governments, foundations, big financial companies and fintechs alike rely on the Findex to understand how people are using (or not using) financial services. It is the best available yardstick through which we measure global progress toward financial inclusion.
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> Posted by Isabelle Barrès, Global Director, the Smart Campaign

This is the first in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry.

The Smart Campaign is thrilled to announce that 100 financial service providers have been Smart Certified, extending fair treatment and respect to more than 42 million low-income financial clients around the world. One hundred Smart Certifications marks a major milestone for the advancement of pro-client practices in the financial inclusion industry. These 100 financial service providers have worked to achieve and demonstrate their commitment to protecting clients from harm and delivering responsible financial services.

The journey to 100 certifications began with the launch of the Smart Campaign in 2008, at a time when microfinance sector leaders recognized the need to ensure that consumers remained front and center to their operations as the sector underwent a period of rapid growth. The Smart Campaign went on to become an umbrella for financial inclusion sector cooperation, through the endorsement of thousands of stakeholders of the Client Protection Principles (CPPs) and accompanying standards. The CPPs offer a common framework for understanding client risks and improving practices, and form the bedrock of the Campaign’s Smart Certification program. The certification program was launched in 2013 as a tool to support and reward financial service providers that offer appropriate products and services and deliver them in a fair and respectful way.

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On a daily basis, consumers fall victim to issues like lack of grievance redressal, misleading ads, and outright frauds and scams

> Posted by Sola Salako Ajulo, President and Founder, Consumer Advocacy Foundation of Nigeria (CAFON)

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In fewer than twenty years, our concept of a market has evolved from a strictly physical location of commercial activity, to also include intangible, real-time e-locations. Research shows that up to 12 percent of all global commercial transactions now take place on the Internet – within and between countries, often across multiple currencies, and with little or no physical contact between seller and consumer.

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How can an app help improve financial health? Spoiler alert: offering users sound financial advice isn’t enough!

CFI and the Microfinance Centre (MFC) in Warsaw are working together to build a smartphone-based tool to assist customers with gauging and improving their financial health.

As part of the project, we developed a simple financial health quiz that will serve as the foundation of the application, helping users not only assess their financial health, but also understand and decide on specific actions to improve it.

Last year MFC tested the quiz among the clients and staff of organizations partnering with its Borrow Wisely Campaign in Eastern Europe and Central Asia. Our lessons learned from this testing phase are informing our next steps as we continue to design and build the application.

We released a new brief, “Toward a Financial Health Tool for Consumers” that distills the results of the tests and shares our lessons learned up to this stage in the project. Here’s a quick overview of our findings.

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Organizations that collectively serve 80% of Australia’s population are working together to advance financial resilience 

> Posted by Good Shepherd Microfinance

If financial inclusion is looked at as a problem of access, Australia is doing very well. Over 98 percent of the adult population has access to at least one financial service. By comparison, the average level across high-income countries is 91 percent, and the average across low-income countries is 28 percent, according to the Global Findex. But scratching the surface finds many people who are struggling with financial hardship.

3.3 million Australian adults (almost 18 percent of the population) lack access to financial products and services that are considered safe, affordable and appropriate for their needs, and 2.4 million experience severe financial vulnerability, based on research on financial resilience conducted by the Centre for Social Impact (CSI).

Recognizing that collaborative action is needed to improve financial inclusion and resilience for the millions of Australians who are left behind, 30 organizations have joined forces to co-design the Financial Inclusion Action Plan (FIAP) program. Led by Good Shepherd Microfinance on behalf of the Australian Government in partnership with EY and CSI, this program helps participating organizations (Trailblazers) understand their role in advancing financial inclusion and resilience, and take practical actions to realize this potential, for their own clients, employees, suppliers and community partners.

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We hope reading this post is just one of many activities you undertake today that acknowledge and celebrate the achievements of women. This International Women’s Day, we turned to a few of the women of CFI to share their thoughts on the gender gap facing lower income women around the world and ways to shift the balance in their favor.
 

Deborah Drake

Deborah Drake says, “International Women’s Day gives us a chance to appreciate the hard work and sacrifice women make every day for their families. It also highlights the challenges involved in giving women the opportunity for economic empowerment and the ability to make choices, including financial decisions for themselves and their families.” (As Vice President of CFI’s Investing in Inclusive Finance Program, Deborah leads the Africa Board Fellowship Program and the Financial Inclusion Equity Council.)
 
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From pay-as-you-go models to products that do away with exclusions, the rules of inclusive insurance are changing 

This post is adapted from the recently-released publication “Inclusive Insurance: Closing the Protection Gap for Emerging Customers,” a joint-report from the Center for Financial Inclusion at Accion and the Institute of International Finance, in partnership with MetLife Foundation.

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With digital channels and effective aggregators, it becomes possible to offer insurance to lower-income segments. But the products themselves must also be designed with both cost control and the needs of the client segment in mind. After all, the financial margins for inclusive insurance are smaller, and the value proposition of insurance is typically tough to sell to customers.

Drawing on insights from our recently-released report Inclusive Insurance: Closing the Protection Gap for Emerging Customers, here are a few of the key approaches for building inclusive insurance products that work for the insurer and the customer.

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How partnerships are enabling insurers to profitably reach the base of the economic pyramid

> Posted by Center Staff

This post is adapted from the recently-released publication “Inclusive Insurance: Closing the Protection Gap for Emerging Customers,” a joint-report from the Center for Financial Inclusion at Accion and the Institute of International Finance, in partnership with MetLife Foundation.

Inclusive insurers cannot afford to go to market alone. They must attract and connect with new customers through distribution partners that already interact with those customers. Such partners can offer scale and cost efficiency, creating a solution that works for the insurer, distributor, and customer, even when premiums are very small.  In some eyes, this is the most critical piece of the inclusive insurance puzzle.

“Good distribution partners are by far the most important issue,” says Martin Hintz, former coordinator of microinsurance at Allianz.

As the inclusive insurance industry has bloomed over the last ten years, we’ve seen providers link with obvious distribution partners, like microfinance institutions, as well as with some surprising ones, like retailers and pawn shops.

As part of our latest report Inclusive Insurance: Closing the Protection Gap for Emerging Customers, we asked providers about their preferred distribution channels. Here’s what we found.

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Microfinance institutions are uniquely positioned to benefit from emerging technologies but one key input remains largely missing

> Posted by Jacqueline Urquizo, Principal, Sygoes

When most people talk about digital finance, they are referring to business-to-customer (B2C) solutions like mobile banking products and other digital payment mechanisms. E-payments undoubtedly have the potential to reach and benefit remote populations, but there are other fintech solutions that make me even more enthusiastic. Though perhaps less developed, innovative business-to-business (B2B) solutions represent a tremendous boon for microfinance institutions (MFIs) and other institutions looking to advance financial inclusion. Among their many benefits, new B2B solutions have the potential to improve internal operational efficiencies drastically, lowering the cost of doing business, which in turn supports lower prices for financial services and expanded access to excluded populations.

A few examples of B2B fintech applications are: artificial intelligence (AI) that provides cognitive analysis and advice to credit officers evaluating the creditworthiness of previously-unbanked individuals; distributed ledger technologies (blockchain) that enable the viability of new forms of collateral that wouldn’t be otherwise trusted or usable without digitizing them in a ledger of value; and data analytics to better predict risks such as liquidity issues, client desertion, or loan default.

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> Posted by Susy Cheston, Financial Inclusion Consultant

This post accompanies the release of “Inclusive Insurance: Closing the Protection Gap for Emerging Customers,” a new joint-report from the Center for Financial Inclusion at Accion and the Institute of International Finance, in partnership with MetLife Foundation.

I have been an inclusive insurance enthusiast ever since I worked for Opportunity International and witnessed the experiments that later became MicroEnsure. In those early days, Richard Leftley framed insurance as the missing piece in the game of Chutes & Ladders (Snakes & Ladders for those outside the U.S.). He likened credit and savings to ladders that could provide a way up for those with lower incomes –but without insurance, each borrower or saver was just one disaster away from slipping back down into destitution. I remember his—at the time—revolutionary concept of paying insurance claims within 10 days or less. He would say that days-to-payout was the only report he wanted on his desk every morning. (Today, of course, payouts can be automatic or even come pre-loss.)

As is often the case with breakthroughs, Richard, of course, was not alone. Thanks to many innovators, an entire industry has emerged with profitable models reaching millions of people, and there is a growing understanding around the world, across social strata of the impact that insurance can have for families, communities and societies. The NGOs that pioneered microinsurance spurred the interest of commercial giants such as Allianz, AXA, MetLife, Swiss Re and Zurich, which have lent their considerable weight to solving the business challenges of extending insurance to underserved and unserved customers. Market catalysts such as A2ii, MicroInsurance Centre, MicroInsurance Network, ILO’s Impact Insurance Facility, and Cenfri have offered insights on everything from the customer experience, to good product design, to proving the business case, to creating an enabling regulatory environment for reaching new insurance markets.

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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.