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> Posted by Deepak Saxena, George Cheriyan and Amol Kulkarni, CUTS International, India

The Consumer Care Center managed by CUTS International in Jaipur, Rajasthan

When a business makes a mistake, does that influence your decision to keep using its product or service? How about if that mistake costs you money and you can’t get the business to correct the mistake?

To date, the importance of efficient and effective grievance redress as a building block for consumer trust has unfortunately remained understated. Across sectors, focus remains predominantly on enabling access to goods and services, with limited thought on post-sale customer engagement and grievance redressal.

This holds true for the financial inclusion sector as well. The success of financial inclusion efforts have mostly been calculated in terms of number of accounts opened or the amount of credit disbursed. Limited thinking goes into putting in place timely and effective recourse processes capable of dealing with fraud and related consumer protection issues. In many countries, state capacity in managing consumer grievances has also remained limited. This is a huge missed opportunity. In the inclusive finance sector, more than in many other industries, establishing trust among first-time users of services is essential.

Consumer Care Centers in India

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> Posted by Daniel Rozas, Independent Microfinance Consultant

The following post was originally published in The Phnom Penh Post.

On March 13, the National Bank of Cambodia announced a major new policy. Starting April 1, all microfinance institutions operating in Cambodia will be required to lend at interest rates no higher than 18 percent per year. This is a deeply misguided regulation that will undo over a decade’s worth of successful financial policies.

At the dawn of this century, Cambodia’s financial sector was largely nonexistent. There were no ATMs, few bank branches, and equally few customers. In rural areas, there were no banks at all, and moneylenders held a monopoly on lending.

How times have changed!

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> Posted by Jami Solli, Independent Consultant and Founder of the Global Alliance for Legal Aid

Click here for Consumer International’s interactive map of global WCRD activities

Happy World Consumer Rights Day (WCRD)! Every year on March 15 WCRD serves as an opportunity to promote the basic rights of all consumers and as a chance to protest against the market abuses and social injustices which undermine those rights. The theme for this year is ‘Building a Digital World Consumers Can Trust’. The following post spotlights the increasing need for regulatory attention on online financial frauds.

No country in the world is free of financial fraud. And, every nation seems to have its own Bernie Madoff. Yet, Madoff’s $50 billion did not do systemic damage to the U.S. financial system, nor did it harm financial inclusion efforts in America. Unfortunately, when ponzis occur in developing countries, they do cause systemic risk and untold damage to financial inclusion efforts.

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> Posted by Robin Brazier, Communications and Operations Associate, the Smart Campaign

Every year on March 8th we honor women around the world by celebrating International Women’s Day. This international holiday not only recognizes women’s valuable achievements and contributions to society, it recognizes the work that still needs to be done to create a more inclusive, gender equal world.

This day resonates especially strongly this year, with the International Women’s Strike also taking place today. For the worldwide strike, women are encouraged to not participate in paid or unpaid work and to avoid spending money – with the aim of demonstrating women’s integral professional and economic role in society. Over 50 countries around the world are participating in the strike, from Canada to Cambodia.

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> Posted by Elisabeth Rhyne, Managing Director, CFI

Money changer at the bazaar displays his currency wares

The following post was originally published on Devex.

In his proposed budget, U.S. President Donald Trump is calling for cuts to foreign assistance. In this message I would like to suggest that even with a smaller foreign aid budget, an excellent opportunity exists to work toward financial inclusion as a development goal. Financial inclusion provides wins all around: for business, for national security and for individuals — and it would not be expensive for the administration to pursue it.

Financial inclusion means ensuring that everyone — farmers, shopkeepers, teachers, students, etc. — has quality financial services to manage their lives and become economically productive. Over 2 billion adults worldwide lack a bank account. Financial services, including accounts, savings and credit, have become a gateway for social and economical inclusion, which in turn contributes to prosperity and peace. For the first time in history, financial inclusion is actually feasible: mobile money, e-commerce and digital financial services make it possible for providers to serve enormous new segments of the population.

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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 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 Center Staff

The following post is part of a two-part series on Modelo Perú.

Today, we are excited to share an issue brief on Modelo Perú, a first-of-its kind payments initiative in Peru. The brief, produced in partnership with The Institute of International Finance, explores the successes and challenges that the initiative has seen since its launch in February 2016.

Spearheaded initially by the Bankers’ Association of Peru (ASBANC), Modelo Perú is an effort to establish an interoperable nationwide payments platform. The platform, Bim (Billetera Móvil), brings together financial institutions, government, telecommunications companies, and large payers and payees into a shared payments infrastructure. It intends to expand banking access to the 71 percent of Peruvians who currently lack a bank account, and aims to reduce the transactions costs associated with cash for both financial service providers and other businesses. Modelo Perú has been lauded as an example of interoperability – with many different players coming together to create one seamless payments ecosystem. About one year after its launch, we wanted to explore how ‘seamless’ it has been.

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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.