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> Posted by Allyse McGrath, Specialist, CFI
We are excited to announce the third annual Financial Inclusion Week, an initiative to drive the global conversation around financial inclusion. In 2015 and 2016, over 70 partner organizations brought together thousands of people worldwide to discuss the most pressing actions needed to advance financial inclusion globally. In 2017, from October 30 to November 3, we will continue the conversations from last year and engage an even wider community of stakeholders to explore this year’s theme: New Products, New Partnerships, New Potential.
Around the world, digital channels are revolutionizing the way that customers access financial products and transforming the landscape of the financial inclusion industry. Financial service providers are harnessing an array of new technologies, data, and schools of thought to re-configure their products and how they offer them. New providers, including fintech startups, are entering the inclusive finance fold and legacy providers are increasingly partnering with them to expand service offerings and reach previously under-served customer segments. These new products and new partnerships bring great potential for creating a more inclusive global financial ecosystem. However, they may also bring new problems – such as issues surrounding data security, transparency on mobile platforms, and discrimination in alternative credit scoring. During Financial Inclusion Week 2017, partner organizations around the globe will hold conversations focused on how new products and partnerships are advancing financial inclusion.
> Posted by Bobbi Gray, Research Director, Grameen Foundation
Writing in 1982, about Fred Astaire, Robert Thaves wrote “Sure he was great, but don’t forget that Ginger Rogers did everything he did, backwards…and in high heels.” Since then, this quote about two legendary dancers has been used to celebrate the skills and talents of women and to demonstrate their ability to juggle complexity and pull it off gracefully.
At Grameen Foundation, we celebrate women for the potential they carry for ending poverty and hunger. In fact, some statistics suggest that if women farmers had the same resources as their male counterparts, the number of hungry people in the world could be reduced by 150 million. Beyond access to quality farm inputs, credit, and land, we also know that when women have equal access to education, health services, and business services they can thrive economically. Helping mothers be healthy before and during pregnancy also results in healthier children and more productive societies. Women are a key driving force against poverty.
> 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.
> Posted by Vinita Godinho, General Manager – Advisory, Good Shepherd Microfinance
You might not know it, but one in every five Australian adults (3.3 million people) is financially excluded, unable to access safe, affordable, and appropriate financial products and services when they need them. This increases their likelihood of experiencing financial hardship and poverty. Two million people in the country also experience high to severe financial stress, reducing their resilience or ability to recover from financial shocks. Those impacted, particularly women, also experience poorer socioeconomic and health outcomes, especially lower education, employment, and income status. Whose problem is this to solve?
Against the backdrop of ongoing global financial and political uncertainty, financial inclusion challenges exacerbate the divide between the ‘haves’ and the ‘have-nots’. In Australia for example, those holding the top 20 percent of wealth have around 70 times more than those in the bottom 20 percent. The country’s growing income inequality does not reflect changes in household characteristics, rather changes in the size of persistent and transitory income shocks. Lack of inclusion and resilience via insurance, savings, credit, and payments therefore compound the impacts of growing inequalities of opportunity, stifling upward mobility between generations, increasing social tensions, and reducing economic growth.
So who’s best placed to respond to this growing problem – the government with its policy vision for financial well-being and capability; business which designs product offerings and offers employment; researchers who study inequality, gather evidence and create theories; or the community sector, which is usually the first line of defense for excluded and vulnerable Australians?
> Posted by Ram Narayanan, Market Research Analyst, Symbiotics
Microfinance, a lead sector within the larger impact investing spectrum, has gained prominence from development-minded investors over the past decades. Initially, international funding in microfinance was generated largely from donor organizations, including public development agencies and private foundations. As the market gained traction, the role of private capital grew in importance as not only a means for microfinance institutions (MFIs) to reach scale, but also to increase their social outreach beyond what was possible with donor money.
Private investors and donor agencies thus joined efforts in creating microfinance investment vehicles, better known in the industry jargon as “MIVs” or more simply “microfinance funds.” MIVs act as the main link between MFIs and the capital markets and usually provide debt financing, equity financing or a combination of both to MFIs located in emerging and frontier markets.
The Consultative Group to Assist the Poor (CGAP) began to take interest in MIVs in 2003, a time where several of these vehicles saw the light, and before the investment boom which was witnessed by the sector with the announcement of the United Nations “2005 International Year of Microcredit.” However, the industry was still lacking common definitions, terminology and performance standards. In order to bring forward improved transparency on MIVs’ financial and social performances, a first market report on microfinance funds was produced in 2007 by CGAP, in collaboration with Symbiotics. The inaugural MIV benchmarking tool was thus born – based on a market survey containing a common set of definitions and reporting standards – a landmark that set the stage for regular, annual surveys carried out every year since then.
Fast forward 10 years, Symbiotics and CGAP have yet again partnered to develop a new extensive report (white paper) reflecting back on a decade of MIV operations, shedding light on their progress during the period 2006-2015. The recently released white paper co-authored by both organizations and entitled “Microfinance Funds: 10 Years of Research & Practice” carefully details major market trends.