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April 18, 2017 in Branchless Banking, Center for Financial Inclusion, Client Focus, Client Protection, Events, Financial Inclusion, Governance, Microfinance, Resources, Smart Campaign, Social Performance, Technology | Tags: 2016 Financial Inclusion Banana Skins, Al Amana, Arabic Microfinance Gateway, Avanz Capital, Banana Skins, Calmeadow Foundation, Dutch Entrepreneurial Development Bank (FMO), Fintech, FMO, Governance, IFC, Impact Investing, Jordan, MENA, Microfinance, Microfinance Gateway, Middle East and North Africa, SANABEL, Smart Certification, Universal Standards for Social Performance Management | by Center for Financial Inclusion | Leave a comment
> Posted by Miranda Beshara, Arabic Microfinance Gateway
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.
April 12, 2017 in Branchless Banking, Client Focus, Client Protection, Financial Inclusion, Governance, Investing in Inclusive Finance, Microfinance, Social Performance, Technology | Tags: Development Finance Institutions, Global Communities, Impact Investing, Impact Investing Exits, Initial Public Offerings, Iraq, Jordan, Lebanon, Microfinance, Microfinance Investment Vehicles, Palestine, Syria, Vitas Group | by Center for Financial Inclusion | Leave a comment
> Posted by Elissa McCarter-LaBorde, CEO, Vitas Group
Alex Silva and Jeffrey Riecke’s recent blog post entitled “What’s ‘Responsible’ about Impact Investing Exits?” hits squarely on the head a critical issue facing our industry. But it doesn’t go far enough. They ask “What if responsible investors sell their stake to an investor that doesn’t place priority on the social mission?” They argue for investors to take a “pragmatic” course and find “a buyer in the middle,” meaning something in between the “high-priced but questionable offer” and the “capital-starved social investors.” This left me wondering, who exactly is in the middle?
In the past, the NGO founders of what are today profitable microfinance banks were expected to be the keepers of a social mission, if not through ownership then through some form of continuing sponsorship or governance role. Compared to five years ago, today we see term sheets that force NGO shareholders out in the name of successful exits. In fact, even the large open-ended funds, presumably more socially-responsible leaning ones, and the development finance institutions (DFIs) that technically don’t require tighter exits of 5-7 years, are coming with term sheets that require a put option (an option contract giving the owner the right to sell assets at an agreed price) in 5-7 years back to the NGO founder or the company, or that include a drag-along right that forces a majority sale to a future “strategic buyer.” In other words, if the minority investor finds a strategic buyer who wishes to buy a majority stake or to acquire the whole company, the investor can drag other shares along to constitute a majority sale.
April 3, 2017 in Branchless Banking, Client Focus, Financial Inclusion, Savings, Social Performance, Technology, Women and Financial Inclusion | Tags: Bobbi Gray, Domestic Violence, Grameen Foundation, Kenya, Mongolia, Pakistan, The Philippines, Violence Against Women, Women, World Bank | by Center for Financial Inclusion | 3 comments
> Posted by Kelsey Truman, HBS-Accion Program Coordinator, CFI
Domestic abuse and violence against women (VAW) are pervasive and shocking. According to the World Bank, 38 percent of murders of women globally are committed through intimate partner violence. Globally, one-third of all women have experienced domestic or intimate partner violence. The World Health Organization even went so far as to call VAW a “global health problem of epidemic proportions.” Could financial services possibly play a role in improving this situation?
One of the largest hurdles in combating VAW around the world is women’s inability or unwillingness to seek help when they find themselves in abusive situations. In conjunction with fear, one important reason many women don’t seek help rests on their degree of financial dependency. That is, they don’t have enough money or economic resources necessary to establish themselves independently, much less pay for legal fees and so forth. Furthermore, women’s vulnerability to violence has been shown to increase with their relative level of poverty. If women are given options to easily and discreetly pursue financial options and open bank accounts independently of their husbands and other male family members, it could very well save their lives one day.
March 29, 2017 in Center for Financial Inclusion, Client Focus, Financial Education, Financial Inclusion, Resources, Savings, Social Performance | Tags: Bill and Melinda Gates Foundation, Center for Financial Services Innovation, Dalberg, Dalberg's Design Impact Group, Financial Health, Financial Health Framework, India, NextBillion | by Center for Financial Inclusion | Leave a comment
> Posted by Tanya Ladha, Senior Manager, Center for Financial Services Innovation, and Elisabeth Rhyne, Managing Director, CFI
The following post was originally published on NextBillion.
Meet Shabana. She is a middle-aged woman, lives in a large metropolis and works at one of the city’s bustling train stations. One day, she suffered a severe workplace injury and wasn’t able to work for weeks. With no support from her employer, she realized how financially vulnerable she was, and decided at that moment to make a change. After recovering from her accident, she began saving almost 30 percent of her income, and after a year was shocked – and empowered – by the considerable financial cushion she had built herself.
Shabana’s story is one of resilience in the face of vulnerability, one of adapting daily habits, one of planning and achieving goals. It is a story of financial health, and it is universal. While Shabana lives in Mumbai, India, her story is relevant for millions of individuals around the world, both in developing and developed countries, including here in the U.S. It is this core concept that pushed the Center for Financial Services Innovation (CFSI), in partnership with the Center for Financial Inclusion at Accion and funded by the Bill & Melinda Gates Foundation, to explore how a U.S.-oriented financial health framework could translate into a developing world context.
March 15, 2017 in Branchless Banking, Client Focus, Client Protection, Financial Inclusion, Policy, Social Performance, Technology | Tags: Digital Finance, Fintech, Ponzi Schemes, Pyramid Schemes, The Smart Campaign, World Consumer Rights Day | by Center for Financial Inclusion | Leave a comment
> Posted by Jami Solli, Independent Consultant and Founder of the Global Alliance for Legal Aid
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.
March 8, 2017 in Center for Financial Inclusion, Client Focus, Financial Inclusion, Global Findex, Policy, Savings, Social Performance, Technology, Women and Financial Inclusion | Tags: Gender, Gender Equity, Global Findex, Iceland, India, International Women's Day, International Women's Strike, Samsung, South Korea, Women, World Economic Forum | by Center for Financial Inclusion | Leave a comment
> 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.
March 2, 2017 in Branchless Banking, Center for Financial Inclusion, Client Focus, Events, Financial Inclusion, Mapping the Invisible Market, Social Performance, Technology | Tags: 5G, CFI Research Fellows Program, CGAP, Fintech, LendIt, Leon Perlman, Mobile Money, Mobile World Congress, Tanzania, The Brookings Institution, Verizon | by Center for Financial Inclusion | Leave a comment
> Posted by Sonja Kelly, Director of Research, CFI
This week at the Mobile World Congress in Barcelona, Verizon announced that it’s unveiling new 5G wireless connectivity for its mobile customers. More “G”s are not a surprising announcement, as mobile networks strut their speed at this annual event like body builders at a weightlifting competition. For those unfamiliar with what exactly 5G means, the network will provide speeds of a gigabit per second and faster, but only in a select group of cities in high income economies.
As we celebrate global innovation, we can also take a moment to highlight those who continue to have limited to no connectivity—with implications for global development. While 5G revs up, an astounding number of people are left out of mobile connectivity and therefore mobile money—even in countries known for their digital financial services uptake.
Our CFI Fellow Leon Perlman examines this phenomenon in his upcoming report. As a sneak preview, in his report Leon shows connectivity maps in a select group of emerging markets, such as the one above. Take this example of Tanzania, a market with growing mobile money usage. In this market, mobile network coverage misses large swaths of rural areas toward the center of the country. Certainly, those areas have lower population densities than other areas, but they are home to many people. The mobile financial services ecosystem depends on connectivity infrastructure that provides reliable and sufficiently high-speed data transmission. Lacking that, people in rural areas are left out in large numbers. In the map above, the blue splotches indicate mobile network coverage, and the dots are where mobile money agents are located.
January 25, 2017 in Branchless Banking, Center for Financial Inclusion, Client Focus, Client Protection, Events, Financial Inclusion, Governance, Microfinance, Policy, Savings, Social Performance, Technology | Tags: Africa Board Fellowship, Calmeadow, Governance, Jordan, Microfinance, Middle East and North Africa, SANABEL, South Africa, Sub-Saharan Africa | by Center for Financial Inclusion | Leave a comment
> Posted by Center Staff
Time flies. It’s hard to believe that the Africa Board Fellowship (ABF) program will soon begin its fifth cohort of fellows. Over the past few years and four cohorts, the ABF program has included more than 125 CEOs and board members from over 40 financial inclusion institutions across 35 countries in sub-Saharan Africa. If you’re an inclusive finance leader in sub-Saharan Africa, now’s your chance to join the governance and strategic leadership program. Applications are now open for the fifth cohort.
ABF recently held two seminars in Cape Town, welcoming the fourth cohort of fellows and graduating the third cohort. With new case studies on disruptive technologies, and an emphasis on interactive role plays and simulations, the seminars proved once again that peer-to-peer exchanges are an effective way to examine best and worst governance practices. To hear the fellows’ takeaways from the two seminars, watch our new video above.
January 17, 2017 in Center for Financial Inclusion, Financial Inclusion, Microfinance, Policy, Resources, Smart Campaign, Social Performance, Technology | Tags: Client Protection, Consumer Protection, Digital Finance, Fintech, McKinsey Global Institute, Mobile Money, Responsible Digital Finance | by Center for Financial Inclusion | Leave a comment
> Posted by Ros Grady
The following post was originally published on Ros’ website.
2016 has seen a sharp-eyed global focus on clarifying what responsible digital financial inclusion means in practice. This is connected to the increasing recognition that digital financial inclusion brings new and significant risks for consumers, as well as considerable benefits.
The September 2016 McKinsey Global Institute Report – How Digital Finance Could Boost Growth in Emerging Economies – suggests that widespread use of digital finance (payments and digital services delivered via mobile phones and the Internet) could add $3.7 trillion to the GDP of emerging economies – or six percent – by 2025. Which in turn could create around 95 million jobs.
So responsible digital financial inclusion is important.
But what was new in 2016? Consider these important developments:
Calling All Financial Inclusion Leaders in MENA! Registration Is Open for the MENA Governance and Strategic Leadership Seminar
January 10, 2017 in Center for Financial Inclusion, Events, Financial Inclusion, Governance, Investing in Inclusive Finance, Microfinance, Social Performance, Technology | Tags: Africa Board Fellowship, Calmeadow, Corporate Governance, Governance, Jordan, MENA, Middle East and North Africa, SANABEL | by Center for Financial Inclusion | Leave a comment
> Posted by Center Staff
You’d be hard-pressed to list all the ways corporate governance can make (or break!) an organization. In the financial inclusion sector, strong boards ensure effective strategic planning, manage sustainable growth, bolster attractiveness to investors, balance risks, develop client centric products and delivery channels, and, increasingly, act as “strong digital sparring partners for management.” Yet, a recent study sponsored by the Sanabel Network and the IFC that inspected risks confronting the microfinance sector in the Middle East and North Africa (MENA) found that half of their interviewees perceived corporate governance risk as “high” or “very high.”
Being a board member or CEO of a financial inclusion institution is a great responsibility, and can also be a complex task. All boards have different dynamics and governance best practices can sometimes be nebulous. To address these challenges, Calmeadow, FMO, Sanabel and the CFI are hosting a “Governance and Strategic Leadership Seminar” this March in Amman. This seminar brings together CEOs and board members of leading financial institutions serving the financially excluded in the MENA region to strengthen board capacity through peer learning and exchange. If you’re a leader in MENA’s inclusive finance sector, please consider attending this seminar to contribute your unique experiences and perspectives, and also to learn from the experiences of your peers.