Tag Archive

> Posted by Sarah Hugo, Project Manager, Developing Markets Associates (DMA)

The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”

For unbanked citizens in developing countries, the collection of remittances sent by friends and family overseas is sometimes their only interaction with the formal financial sector. Yet remittances are too often overlooked when considering approaches for increasing financial inclusion. For Armenia, a country that receives 16 percent of its GDP from remittances, only 2.5 percent of people use an account to receive them.

In a recent workshop we conducted with middle managers from five banks in Armenia, staff admitted they were initially skeptical about the implementation of a financial education program aimed at remittance recipients. Even though the pilot was to be fully funded through the European Bank for Reconstruction and Development’s Early Transition Country Multi-Donor Fund, staff remained unconvinced about the potential impact and effectiveness of financial education and how it would be received by customers. These opinions were primarily due to expressed beliefs: that people would not be receptive to the program’s unplanned financial consultations, that their bank already did a good job at offering financial products to remittance recipients, and that most remittance recipients only have money to cover their basic needs and therefore have no need for financial products.

Halfway through the pilot, the results of the financial consultations have been impressive, and bank management and staff admit that their preconceptions were misplaced. The results indicate that there is indeed value in providing financial education and in targeting remittance recipients.

Read the rest of this entry »