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> Posted by Center Staff


Screenshot from VisionFund International’s webinar (click to watch)

This post is part of Financial Inclusion Week, a week of global conversation on advancing financial inclusion. This year’s theme is keeping clients first in a digital world. Throughout the week participants will share their thoughts in events and webinars, on social media, and through blog posts. Add your voice to the conversation using #FinclusionWeek.

On day three of Financial Inclusion Week 2016 we were excited to see conversations happen around the world, including in Rwanda, Bangladesh, and Australia. We offer a rundown of these events and the vibrant online conversation below.

The week is nearing a close but there are still plenty of upcoming events and ways to get involved. Be sure to share your thoughts on Twitter with #FinclusionWeek, join tomorrow’s webinar with Innovations for Poverty Action, or submit a client quote and photo to our collection of client insights.

What’s Happening

VisionFund International hosted a webinar (two webinars, in fact, to accommodate for different timezones) focused on the future of digital financial services. The webinar centered on how VisionFund is using technology to lend to smallholder farmers at the right level, and at the right time. During the webinar, Tom Allen and Justin McAuley, Director of Change and Programs and Director of Global Digital Architecture at VisionFund, highlighted a new application they developed which uses available geographic and market data to better extend their products to smallholder farmers and manage risk. You can watch the full webinar here.
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> Posted by Center Staff

Financial Inclusion Forum UK event yesterday at the European Bank of Reconstruction and Development (EBRD)

This post is part of Financial Inclusion Week, a week of global conversation on advancing financial inclusion. This year’s theme is keeping clients first in a digital world. Throughout the week participants will share their thoughts in events and webinars, on social media, and through blog posts. Add your voice to the conversation using #FinclusionWeek.

We are one day into Financial Inclusion Week 2016 and are so excited to already see stakeholders from across the globe coming together to discuss the week’s theme of keeping clients first in a digital world. As our global financial ecosystem undergoes a digital revolution, we are presented with great opportunities and great challenges to extending financial services in a responsible manner. At CFI, we believe that access to financial services is not enough. We define financial inclusion as “a state in which everyone who can use them has access to a full suite of quality financial services provided at affordable prices, in a convenient manner, with respect and dignity. Additionally, financial services are delivered by a range of providers, in a stable, competitive market to financially capable clients.”

Keeping clients first in a digital world requires looking beyond access to the essentials of quality services and client treatment. Financial technology has the potential to improve access, as well as the potential to improve convenience, lower prices, and build financial capability. However, fintech also has the potential to take away some of the respect and dignity present in an in-person banking transaction, and it can present new risks. We hope that this week you will explore the best ways to ensure that this digital revolution is not compromising clients, but instead further protecting them against risks and empowering them through new channels.

What’s Happening

Financial Inclusion Forum UK: Last night in London, over 200 stakeholders gathered at the European Bank of Reconstruction and Development (EBRD) for a conversation focused on “The Progress and Future of Financial Inclusion.” The three-hour event, organized by the Financial Inclusion Forum UK, consisted of a keynote and two panel discussions. The first panel discussion, featuring representatives from CDC, VisionFund, and EBRD, and moderated by Yasmina McCarty of GSMA, assessed current progress in financial inclusion. The second panel looked to the future with panelists from Financial Services for All, DoPay, Leapfrog Labs, and the Centre for the Study of Financial Innovation.

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> Posted by Isabel Whisson and Maria A. May, BRAC

Destructive and devastating, disasters threaten to rob communities of resources, households of livelihoods, and families of loved ones. Difficult to anticipate and inherently costly, is there hope of fostering resilience against them?

Certainly. This year at BRAC’s Frugal Innovation Forum, an annual congregation of development innovators, the conversation centered on “scaling resilience“. In responding to crises as diverse as Nepal’s earthquake, to Typhoon Haiyan, to the collapse of Rana Plaza, a common theme for solutions promoting resilience was to create systems in advance that enable immediate response and recovery.

Having access to financial services is key. According to Michael Kellogg of VisionFund International, “People know what they need following a disaster and are extraordinarily adaptable in identifying ways to meet those needs. Equipping them with money soon after the disaster enhances their capacity to quickly rebuild livelihoods and the economic recovery of the local market.”

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> Posted by Misha Dave and Jeffrey Riecke, Disability Inclusion Program Manager and Communications Specialist, CFI

Financial inclusion for persons with disabilities (PWD) is a hugely under-addressed area in the quest to bank the unbanked. Estimates indicate that less than one percent of microfinance clients globally are PWD, despite roughly 15 percent of the global population having some sort of disability, and four-fifths of these individuals living in developing countries. The Center’s Financial Inclusion for PWD program, launched in 2010, has developed steadily since its inception. Here on the CFI blog you might’ve seen us spotlight our Framework for Disability Inclusion, our report on attitudes related to disability inclusion among Indian MFIs, or our disability inclusion partnerships with MFIs.

The program has been busy over the past year. Let’s take a look at a few highlights.

India Partnerships: The Center’s PWD program provides trainings and resources to sensitize and equip MFIs to service PWD clients. The program recently forged new partnerships with two MFIs in India, Grameen Koota and Micrograam, bringing the total number of partnerships with institutions in the country to five. The other three partner institutions in India are Equitas, ESAF, and Annapurna. Across these three original partners, more than 30,000 lower-income disabled persons, including 2,000 visually impaired individuals (a severely excluded disability segment), have been included.

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> Posted by Alvina Zafar, Deputy Manager, Microfinance, BRAC, and Monirul Hoque, Management Professional, Microfinance, BRAC

“I can’t thank BRAC enough for standing beside me when I needed help the most,” Rahela, 24, a microfinance borrower and recipient of BRAC’s credit shield insurance, tells us. She borrowed US$385 in January 2015 to invest in a small clothing business. Recalling her experience, she reveals “My husband was not interested initially in having a joint insurance policy, but when the customer service assistant explained it in detail, we decided that we should pay the small premium.”

Just a few months later, Rahela’s husband suffered a fatal cardiac arrest, leaving her to care for and support their child on her own. Her first step was to claim the insurance that they had wisely bought. Within two weeks, Rahela received the claim, of US$135, alongside an additional US$64 benefit provided as standard to cover funeral costs. She chose not to withdraw any of her savings of US$63.

In Bangladesh many people with low incomes are reluctant to take insurance products, like Rahela’s husband, due in large part to the lack of transparency in, and lack of understanding of many insurance products. There are no standards for how much insurers can charge and often the premium rates contain hidden charges. Project features can be rigid, making some features mandatory for the user, which reflect their typical supply side origins (i.e. convenient for providers but not necessarily for clients). Moreover, there are cases where clients complain about not receiving promised services, breaking the clients’ trust and generating healthy skepticism towards any promises of future benefits that have to be paid for in advance.

Most successful microinsurance schemes in Bangladesh, therefore, are involuntary – being provided alongside other services, such as telecommunications. In light of the seemingly low demand for microinsurance in the country, then, BRAC’s pilot experiment with credit shield insurance has been uniquely successful.
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> Posted by Larry Reed, Director, the Microcredit Summit Campaign, and Jesse Marsden, Research and Operations Manager, the Microcredit Summit Campaign

In collaboration with the CFI’s process to develop the Financial Inclusion 2020 Progress Report, the Microcredit Summit Campaign recently conducted interviews with microfinance leaders* around the world committed to reaching the most excluded. In this post, we share some of the insights from these conversations about how to ensure that the most invisible clients are financially included, directly drawn from the experiences of those who are doing it.

To set the stage, Luis Fernando Sanabria, General Manager of Fundación Paraguaya, made this central point: “Our clients need to be the protagonists of their own development stories. Our products should be the tools they use to meet their needs and empower their aspirations.” With that reminder of the purpose of financial inclusion, we begin the discussion by asking who are the most excluded.

In each country, people living in extreme poverty (below US$1.25 a day) make up the largest segment of those excluded from the financial system. We spoke with leaders from organizations that make intentional efforts to reach this large excluded market: Fundación Paraguaya; Pro Mujer; Fonkoze; Plan Paraguay; Equitas; Grama Vidiyal; and TMSS. These organizations not only address poverty, but also a host of other dimensions that lead to exclusion, including literacy, race, gender, physical disabilities, and age. Less frequently-discussed reasons for exclusion include sexual orientation, language barriers (especially among indigenous populations), and mental or emotional health issues. In India and Bangladesh, for example, those interviewed noted that the lack of personal identification often drove exclusion, especially among women, persons with disabilities, and the socially excluded, such as transgender individuals.

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> Posted by Grace P. Sengupta, Assistant Manager, BRAC Social Innovation Lab, and Maria A. May, Senior Program Manager, BRAC Social Innovation Lab and BRAC Microfinance Research and Development Unit

Bangladesh is a fast-growing mobile money market. With bKash, the second-largest mobile money provider in the world, industry growth in the country has reached impressive heights. Between January 2013 and February of this year, the number of mobile money clients in Bangladesh increased five-fold to 25 million users, with the number of monthly transactions increasing from 10 million to 77 million.

Yet many have found that much of the mobile money usage in Bangladesh is still over the counter – that is, many people who use mobile money rely on an agent to complete their transactions for them. There is strong speculation that the current mobile money interfaces are just too complicated for the average rural, low literacy user.

Last year, BRAC, our Bangladesh-based organization, decided to try going (nearly) cashless in a very rural, very remote branch run by our Integrated Development Programme (IDP). Many of the institution’s financial transactions, such as giving staff mobile allowances, paying extension workers, and collecting loan installments (for clients who opted-in), were digitized.

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> Posted by Alex Counts, Founder, Grameen Foundation

On Sunday, August 23, as I was enjoying some of the final days of summer visiting friends in New Hampshire, I noticed that I had been tagged in a tweet by Dean Karlan, the founder and president of Innovations for Poverty Action.  He provided a link to an article about FINCA that included extensive quotes from its CEO, Rupert Scofield.  He asked Rupert if he really believed microfinance could reduce terrorism, and asked me what I thought (“whatcha think?” was the precise formulation of his question).  He tweeted again on Monday, asking whether I was “still going to stand by [my] claim that no microcredit leaders make grandiose and overselling impact claims?”

First of all, I have never said that no microcredit leaders have ever exaggerated impact claims.  I believe that those exaggerated claims have been rare and atypical, especially in recent years.  In other words, the tendency for practitioners and advocates to make exaggerated claims not backed up by data has itself been quite exaggerated.

But I don’t think Twitter is the best medium for exploring such topics.  So I was grateful when the Center for Financial Inclusion agreed to publish this response to Dean’s public queries of me, in which I could address some related issues about microfinance advocacy and research.  (This post builds upon some of the observations I made in reviewing Dean Karlan and Jacob Appel’s impressive but flawed book, More Than Good Intentions.)

Regarding the article Dean tweeted about, I am supportive of Rupert’s statements and encourage others to read it and come to their own conclusions.  (Having been the public face of an international humanitarian organization for 18 years, I also realize that journalists sometimes focus on a very small part of what someone says in an interview, often on those things that are potentially the most controversial.)  For the most part, Rupert comments on specific microfinance clients he and the journalist met and on his past experiences and how they shaped his view of microfinance.  It’s impossible to challenge any of those observations and recollections.  They are statements of personal experience and opinion.

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> Posted by Alvina Zafar, Deputy Manager, Financial Education and Client Protection, BRAC Microfinance

Financial Inclusion 2020 Blog Series banner imageFinancial Inclusion 2020 (FI2020) is a global multi-stakeholder movement to achieve full financial inclusion, using the year 2020 as a focal point for action. This blog series will spotlight financial inclusion efforts around the globe and share insights from key thought leaders in financial inclusion, with a specific focus on quality beyond access.

“I am not sure if I can repay more loans, and I don’t want to be overburdened by debt.” That was how Noyon, a small grocery shop owner with a physical disability, replied when BRAC asked whether he would like to take a loan to expand his business. This is a common response we hear from clients with disabilities when they’re offered credit products. Many prefer to avoid taking loans unless absolutely necessary. They guard their reputations closely against a society that sees persons with disabilities as less capable, and defaulting on a loan is not a risk they are willing to take. This insight raises an important question with regard to the financial inclusion of persons with disabilities: Is access the biggest barrier?

In 2015, BRAC scaled up its Engaging People with Disabilities project with ADD International, an organization that focuses on campaigning for equal rights and ensuring social justice for people with disabilities. The objective of this partnership is to leverage the access and coverage that ADD International has with people with disabilities in Bangladesh and provide financial services (e.g. savings, loans, insurance, etc.) to interested beneficiaries. As of May of this year, the project has a client base of over 7,000 people with disabilities, with an average loan size of US$ 282 and a repayment rate of 100 percent. Clients are saving on a regular basis, with an average saving account balance of US$ 50. The majority of the clients are entrepreneurs—they own and operate grocery shops, tea stalls, small vending businesses, and the like. One objective of BRAC’s is to empower all clients by building their financial capabilities. A by-product we see in many of our clients from this pursuit is, on top of enhancing their knowledge about financial management, it raises their confidence and self-respect. Since the early days of BRAC’s disability inclusion work, we’ve been grateful to receive technical, advocacy, and other support from CFI. Read the rest of this entry »

> Posted by Elisabeth Rhyne, Managing Director, CFI

I recently attended the annual meeting of the Microfinance Network (MFN), which was hosted by the Alexandria Business Association in Alexandria, Egypt. MFN is a global network of some of the largest and leading microfinance institutions, and its annual meeting has long been known for candid and in-depth sharing of experience among the leaders of these institutions, as this post demonstrates.

Ask a microfinance CEO what’s making his or her life hard these days, and the answer is likely to be politics.

That’s hardly surprising when the speaker is Motaz Tabaa, CEO of the Alexandria Business Association (ABA), one of the largest microfinance institutions (MFIs) in Egypt. On January 28, 2011, when the occupation of Tahrir Square in Cairo held the world’s attention and led to the resignation of then-President Mubarak, it became impossible for ABA to operate. But before the week was over, staff were back on the streets, collecting and disbursing loans, and sleeping at the office to guard the cash that couldn’t be deposited in banks, which remained still closed.

Nearly every MFI in the group had a similar encounter with crisis – consider the political violence (and/or natural disaster) that has touched Uganda, Nigeria, Armenia, Mexico, Haiti, and Bangladesh in recent years. Today, Al Majmoua in Lebanon and Tamweelcom in Jordan are overwhelmed with the attempt to serve the Syrian refugees that have crossed their borders. The CEOs who have experienced such upheaval agreed about the role of MFIs in responding quickly to help clients obtain cash, keep their businesses open, and then rebuild. Given how prevalent political and natural crises are, organizations have developed protocols for responding quickly. Even while we met, Enrique Majos of Compartamos received news of a tornado in Mexico, and sent the Compartamos natural disaster team into action.

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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.