You are currently browsing the category archive for the ‘Smart Campaign’ category.

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.

Read the rest of this entry »

> Posted by Elisabeth Rhyne, Managing Director, CFI

Client of Akiba Bank in Tanzania

Around the world today, financial service providers, technology entrepreneurs and policy makers are engaged in building a financial system that reaches out to previously excluded people, such as lower income people, very small businesses, rural dwellers, and women. Although this work is carried out in the name of the consumer, all too often, scant attention is paid to the real needs and desires consumers and very small enterprise owners have.

With that in mind, here is a thought experiment. A thought experiment is an “exercise of the imagination used to investigate the nature of things.” The question for this experiment is this:

Imagine that consumers were the creators of the inclusive finance system. What would such a system look like?

What characteristics would emerge if the needs, desires and preferences of the target customers of financial inclusion were the driving force to shape their services? The observations here are drawn from consumer research conducted or commissioned by the Center for Financial Inclusion, including research in Peru, Pakistan, Georgia and Benin for the Client Voice project of the Smart Campaign, in Kenya and India for our project on financial health, in India and Mexico for our study of financial capability, and again in Kenya and India for two CFI Fellows’ projects on the role of human touch in the digital age. I offer ten propositions based on this research.

Read the rest of this entry »

> Posted by Sonja Kelly, Director of Research, CFI

In ethics, there is a commonly shared thought experiment called the trolley problem. You are standing next to trolley tracks, and a trolley is coming. In its current trajectory, it is going to run over five people who are tied to the tracks. You could divert the train using a lever in front of you, but then the trolley would hit one person tied to the tracks. Do you become active in this scenario and sacrifice the one person? Or do you abstain from involvement and watch the five people get run over?

I don’t mean to be morbid here, but this is a thought experiment that I have been mulling over when it comes to financial inclusion.

Read the rest of this entry »

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

U.S. Capitol BuildingLately, so much has been happening in Washington, D.C. that it feels impossible to keep up. Every day is a whirlwind of new developments. The Smart Campaign has been keeping its eye on one bill in particular: H.R. 10, the Financial CHOICE (Creating Home and Opportunity for Investors, Consumers and Entrepreneurs) Act of 2017. Among its other provisions, the Financial CHOICE Act threatens to disarm the Consumer Financial Protection Bureau (CFPB) and compromise the well-being of financial service consumers in the United States.

Introduced by House Representative Jeb Hensarling (TX-5) in April, the CHOICE Act, according to its sponsors, would loosen the allegedly burdensome and complicated regulations put in place by the Dodd-Frank Act of 2010 with the stated goal of increasing financial services access for small businesses and spurring economic growth. These small businesses are said to be having a difficult time getting loans from small banks due to Dodd-Frank, and the CHOICE Act would purportedly lessen these difficulties and allow more small banks to lend to small businesses.

However, from where the Smart Campaign is sitting, the CHOICE Act looks quite different.

Read the rest of this entry »

> Posted by the Microfinance CEO Working Group

(click to enlarge)

What’s been happening with the Microfinance CEO Working Group (MCWG)? We’re glad you asked. Fresh-off-the-press is a new annual report from the MCWG, detailing the Working Group’s key accomplishments and activities of the past year. Consumer protection is among the standout areas for the MCWG for 2016. Over the course of the year, 14 local partners belonging to the MCWG network achieved Smart Certification, including BRAC Bangladesh, the first microfinance provider in the country and the largest in the world to reach the consumer protection milestone. In total, 21.9 million clients are served by 39 MCWG network Smart Certified institutions.

The MCWG is comprised of the leaders of 10 global microfinance organizations: Accion; Aga Khan Agency for Microfinance; BRAC; CARE; FINCA; Grameen Foundation; Opportunity International; Pro Mujer; VisionFund International; and Women’s World Banking. The newest member, added in 2016, is the Aga Khan Agency for Microfinance and its General Manager Jesse Fripp. The MCWG also harnesses the expertise of more than 40 senior staffers across the member organizations, who meet regularly across seven Peer Groups focused on specific areas of microfinance, from digital financial services, to social performance, to communications, taxation, and others. Members and local partners work with more than 89 million clients in 87 countries, providing them with financial services as well as other support to help them succeed and lift their families out of poverty.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Senior Communications Specialist, CFI

Phones are making everything more convenient, but are they also reducing costs? That depends on which service and whose wallet you’re talking about. If it’s the consumer’s mobile money wallet, well, the verdict is still out. In a CGAP paper published last year, Rafe Mazer and Philip Rowen lamented that pricing transparency practices in mobile money services are wholly inadequate across payments, credit, and other product lines. They assert an urgent need for standards and policy to impose better practices on mobile money providers. It’s critical to know how prices are tabulated and what fees are incurred – for the betterment of customers and the industry.

In Kenya, arguably the world’s most robust and dynamic mobile money market, we’ve seen a few recent steps in the right direction.

As of May 2017, per a directive issued by the Competition Authority of Kenya (CAK), telcos and financial institutions providing mobile money services were required to ensure that their users are informed via real-time notifications of the price of their transactions – after they are initiated by the user, but before the transactions are completed and money is transferred. This order by the CAK was permitted to be carried out in stages: first, mobile money providers were asked to let users know the price of their money transfers and bill payments after their transactions occurred; then, providers were required to provide pre-transaction pricing for these two services; and finally, this pre-transaction price disclosure was extended to “value-added” mobile money services like micro-loans and micro-insurance. The new rule applies to mobile money services offered through apps, USSD codes, and SIM toolkits.

You might not think that getting notified about relatively small fees is a big deal. After all, mobile money services in Kenya like M-Pesa are used so often that users probably have a strong grasp on pricing. But this is unclear. When CGAP queried mobile money users in Kenya on M-Pesa pricing changes in 2014, despite claiming to be aware of current pricing figures, many respondents in fact were not.

Read the rest of this entry »

> Posted by Carmen Paraison, Senior Program Associate, Africa, the Smart Campaign

Smart Campaign Uganda convening participants

Smart Campaign Uganda convening participants

Earlier this year, the Smart Campaign co-hosted a financial inclusion and consumer protection event in collaboration with the Microfinance CEO Working Group and the Association of Microfinance Institutions of Uganda in Kampala, Uganda. With more than 100 people in attendance representing diverse stakeholder groups, the event served as a platform to exchange ideas and commit to greater partnership to progress financial inclusion policies and practices, and consumer protection in Uganda.

The goal of the event was to provide an opportunity to obtain clear commitments in support of the key themes and objectives of Uganda’s developing national financial inclusion strategy, and to place consumer protection at the heart of its roll out. The convening brought a variety of stakeholders together, including financial service providers, donors, researchers, government ministries, and the Bank of Uganda, to support the country’s consumer protection goals and facilitate better collaboration.

After hearing the perspectives and inputs of the key sector stakeholders in attendance, we took stock of our three-year strategy for the country. Going forward, the Campaign’s approach will focus on the following:
Read the rest of this entry »

> Posted by Lizzy Bolze, Analyst, Investing in Inclusive Finance, CFI

How does a microfinance institution know what transformation will be like from an NGO to a formal financial institution? In an increasingly complex industry with competition from commercial banks and the entrance of fintechs, many microfinance NGOs are considering transformation to realize their growth potential and help attract investment. However, the road to transformation can often be bumpy, as noted in the Center for Financial Inclusion’s publication Aligning Interests: Addressing Management and Stakeholder Incentives During Microfinance Institution Transformations.  Regulatory compliance issues, information technology hurdles, and aligning with the needs of the NGO and investors can often complicate the process. For Enda Tamweel, the largest and oldest microfinance organization in Tunisia, the decision to transform has come with external pressures, operational challenges, and a focus on maintaining their mission. Read the rest of this entry »

> Posted by Miranda Beshara, Arabic Microfinance Gateway

Alex Silva, Executive Director, Calmeadow

Governance is a business imperative, and investors are willing to pay a premium for effective corporate governance. This was one of the key takeaways from the Middle East and North Africa (MENA) Governance and Strategic Leadership Seminar, held recently in Amman, Jordan. We’ve seen this stated priority of governance in the MENA microfinance market exhibited elsewhere, too. A joint IFC-Sanabel report assessing the top perceived risks facing the microfinance industry in the Arab world uncovered that the market’s stakeholders viewed weak corporate governance structures as one of the more threatening risks out of roughly 30 risk categories. Financial service providers in particular perceive this risk to be rising.

Read the rest of this entry »

> 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

Read the rest of this entry »

Enter your email

Join 2,201 other followers

Visit the CFI Website

Twitter Updates

Archives

Founding Sponsor


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.

Note

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.