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> Posted by Virginia Moore, Communications Director, CFI
Last week, the Center for Financial Inclusion at Accion (CFI) participated in LendIt USA, an annual conference that brings together leaders and startups in fintech, lending, and venture capital to discuss trends, innovations, and the future of the industry.
So, what were we doing there? We attended to help introduce what we do to this audience of over 5,000 people, partnering with LendIt organizers to launch its very first financial inclusion track. CFI managing director Elisabeth Rhyne spoke on a panel about responsible credit along with representatives from the Consumer Financial Protection Bureau, the Marketplace Lending Association, LendStreet, and AEO. Championing the Smart Campaign and consumer protections, Beth brought a global perspective on what responsible credit looks like in practice. She also debated the elephant in the room—or as she put it, “the dead cat on the table:” interest rates. Our director of research Sonja Kelly also moderated a lively session on how smartphones in emerging markets are expanding access to credit with executives from Branch, Cignifi, Juvo, and PayJoy. We’ll have more on these sessions soon.
It was exciting and satisfying to see so much interest in financial inclusion from conference attendees who may not readily know the definition of financial inclusion, appreciate its value, or recognize how they’re contributing to it.
What Is the Value of Financial Inclusion to Fintech and Investor Communities?
> Posted by Shaheen Hasan, Manager, FI2020 at CFI
The “customer centricity” mantra has become a common refrain among donors, policymakers, practitioners, and providers working on financial inclusion. Indeed we would be hard-pressed to find anyone working in the sector who wouldn’t identify him or herself as focused on customer needs. In the Addressing Customer Needs section of the Financial Inclusion 2020 Progress Report, however, we report that the number of financial service providers who are actually investing in and implementing these ideas at a scalable level are still few and far between. Although the truly customer-centric organizations are in the minority, we found a host of good examples, and we highlight some examples we like in the report.
A critical element of addressing customer needs is building the right consumer insights infrastructure to gather and translate data into better product offerings and the targeting of new market segments. Organizations use a multitude of methods to assemble insights. Some players, such as Equity Bank in Kenya and Tigo in multiple countries have built up in-house research capabilities. Banco Azteca in Mexico, for example, has one of the most sophisticated market research systems to amass and analyze information on customers. It has used that information to build up a clientele of millions of savers, borrowers, remittance receivers (and some senders), and insurance policy holders. Janalakshmi, an Indian microfinance institution, with the support of CGAP, developed a tool, Kaleido, which utilizes its front-line staff to get a “360 degree” view of a household, providing a rich source of data for developing new products as well as assessing the financial progress of a household.
With increasing availability of data on client behavior and new techniques to analyze that data, there is a rich wellspring to mine for insights relevant to market segmentation, product design, and delivery improvements.
> Posted by Andrew Fixler, Freelance Journalist
Atikus, a new financial inclusion-focused enterprise, is gearing up to launch an underwriting platform and a credit insurance product in Rwanda for micro, small, and medium enterprise (MSME) credit. The insurance product is designed and brokered by Atikus, and ultimately backed by a local insurance company. I recently sat down with Kate Woska, co-founder and CEO of Atikus, to discuss financial innovation and her company’s work.
Microfinance has long benefited from careful experimentation and innovation. Initiatives that are targeting the base of the pyramid tend to be consumer-focused (e.g. micro health insurance or mobile payments development); however, according to Woska, these initiatives may be populating an industry that also suffers from institutional and market-level inefficiencies.