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> 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.

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> Posted by Sarah Rotman Parker, Director, the Center for Financial Services Innovation, and Sonja Kelly, Director, the Center for Financial Inclusion

The following post was originally published on the CGAP blog. 

Over the past year, the Center for Financial Services Innovation (CFSI) and the Center for Financial Inclusion (CFI) have explored financial health in emerging markets. We wanted to understand whether the concept of financial health, promoted widely in the United States by CFSI, could be used as a relevant framework to understand consumers. Financial health is defined as coming about when your daily systems help you build resilience and pursue opportunities. Our working hypothesis was that financial health could serve as a method of tracking progress in emerging markets since it is what people strive to attain, and therefore is one of the core aims of financial inclusion.

Our work took us to rural and urban areas in Kenya and India. With the help of the Dalberg Design Impact Group and funding from the Bill & Melinda Gates Foundation, we asked consumers in these markets questions about their financial lives. These questions ranged from how much money they could come up with if they liquidated all of their assets to whether their friends would help them financially in the case of an emergency (and about a hundred other questions in between these two ends of the spectrum).

The aim of the research was to identify the key indicators of financial health in a developing world context, similar to the eight key indicators that CFSI had identified for the U.S. market. We found that while financial health as a concept holds in countries like India and Kenya, the indicators to define and measure financial health look somewhat different from those in the United States. The resulting framework can be summed up as follows (and the full report is here).

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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.