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> Posted by Elisabeth Rhyne, Managing Director, Center for Financial Inclusion at Accion

I recently browsed the website of CashNetUSA, a company that offers payday loans and related products in 38 states across the United States. The website was easy to read and presented the application process and the (very high) charges simply and clearly. But I wanted to know more. Is this company legitimate? Does it live up to its promises? Will I experience any problems along the way? More broadly, how can a consumer tell whether an online payday lender is trustworthy?

I had no peer or family member to ask about this, so I turned to online credit provider reviews and began a Google-based armchair investigation.

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For Telenor Group, the key to fostering inclusive digital finance is collaboration and open technologies.

By Johanna Stemberger, Telenor Financial Services

The digitization of the financial services industry is in full swing. Seamless in-app payments enable smartphone users to pay for rides, tickets, food, etc. with just one click.
Pay with Wave Money AdIn emerging markets, where most of the world’s 2 billion adults without bank accounts live, basic financial services have improved over the last decade: mobile operators and banks enable customers to store and transfer funds using their mobile phones. Still, developers and digital innovators struggle to reach users in these cash-based markets.
How can we foster innovation in financial technology for low-income consumers through products and services that promote digital financial inclusion? Telenor Group believes the answer to this question is to collaborate and open up. We’re going to discuss two examples below.
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> Posted by Center Staff

With Financial Inclusion Week 2017 less than two weeks away, we’re excited to share a full calendar of events and specifically, 11 webinars or online events that you can join from wherever you are. Topics include micro pensions, IndiaStack, interactive voice response technology, and more. Don’t pass up an opportunity to hear from organizations and experts from around the world – register today!

Monday, October 30

Digital Fireside Chat: How Are New Products and New Partnerships Unlocking Access to Insurance?
Hosting Organizations: AXA, Center for Financial Inclusion at Accion
To kick of Financial Inclusion Week 2017, Elisabeth Rhyne, Managing Director of the Center for Financial Inclusion at Accion will join Garance Wattez-Richard, Head of AXA Emerging Customers for a digital fireside chat. During the webinar, Rhyne and Wattez-Richard will discuss how new products and partnerships are opening up new potential in the inclusive insurance space. They will take a specific look at how AXA is working to reach emerging customers.

Technology-Enabled Financial Inclusion in Myanmar
Hosting Organizations: ThitsaWorks, Internet Journal
ThitsaWorks and Internet Journal will host a Facebook Live conversation on the impact of digital services on financial inclusion in Myanmar, where mobile phone ownership has grown rapidly from 5 to 90 percent between 2011 and 2017.

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> Posted by Jeremy Gray, Engagement Manager, Cenfri

Embed from Getty Images

Why is it that 80 percent of bank account holders in Madagascar only use their accounts once a month or less?

What makes the parents of a child requiring unforeseen medical treatment in the DRC choose to approach their mutualitée (a local form of informal mutual aid society) for a loan despite access to a microfinance institution or local bank?

If a Zimbabwean has a mobile money account, why does he ask a family member to send him money in the care of a bus driver rather than through that mobile account?

The gap between uptake and usage is well documented in financial inclusion. But while these insights are important evidence of the gap, they tell us very little about why this gap exists. The result is that we know there is a problem, but without understanding why, we can do very little to change the problem.

To help us better understand the why, we at insight2impact (i2i) have been exploring the factors that affect usage. In doing so we have incorporated insights from across multiple fields on human decision-making and applied the most relevant aspects of existing models and understanding to the field of financial inclusion.

Decision-making is important for both financial service providers (FSPs) and policymakers to understand, but it isn’t simple, and, typically, our decisions are not based on one single factor. Furthermore, psychology and behavioral economics have illustrated that in some cases we are not even cognitively aware of many of the important factors that influence our decisions.

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> Posted by Sonja E. Kelly, Center for Financial Inclusion at Accion, and Sergio Navajas, Multilateral Investment Fund, Inter-American Development Bank

A Spanish-language version of this post immediately follows the English-language version.

Financial institutions of all sizes around the world are joining the digital revolution. In our work and research at the Center for Financial Inclusion at Accion and the Inter-American Development Bank we have seen some best cases of institutions shifting toward digital as well as some failures. At the end of this month we’ll be discussing strategies to pursue digital innovation as part of the Foromic in Buenos Aires. (Join us for our session on Tuesday, October 31st at 11:15 am!) In the meantime, for institutions that want to start down the path of digital innovation, here are a few of our top strategy suggestions.

1. Make sure you actually want to digitize. Some institutions are digitizing because they have undertaken extensive research on what value digitization will bring to their institution. These analyses involve things like cost reduction, increased access, increased efficiency, better record-keeping, or all of the above. But others are digitizing, more or less, because they see their peers doing it. Remember when your mom told you not to jump off a bridge just because everyone else was? The same applies here. There are some institutions that will do just fine without pursuing a full digital strategy right now. And that is ok. A good rule of thumb here is you’re likely better off not digitizing at all if you are only going to “phone it in.”

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> Posted by Lizzy Bolze, Project Specialist, Investing in Inclusive Finance, CFI

Board members and CEOs of MFIs in the MENA region met at the MENA Governance and Strategic Leadership Seminar hosted by CFI, Calmeadow and the Sanabel Network, in Jordan this March

Over the past few years, the financial inclusion landscape in the Middle East and North Africa (MENA) region has rapidly evolved with new market entrants, changing regulations and increased financial risks. The industry aims to expand access to formal financial services and achieve much needed economic stability, and yet the financial inclusion ecosystem in MENA has experienced slower growth over the last 10 years compared to their peers in other parts of the developing world. According to reports by the World Bank and CGAP, microfinance institutions (MFIs) in MENA are currently reaching approximately 3 million borrowers, with a loan portfolio of over $2 billion — far below the market potential estimated at 56 million borrowers. The stakes are getting higher and MFIs need to reconsider their strategic directions in order to reach the unmet clients at the base of the economic pyramid.

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> Posted by Brigitta Nyawira, Program Manager, Grameen Foundation

Alice is a smallholder farmer in Machakos, a semi-arid town east of Nairobi, where subsistence farming is prevalent. Most farmers in Machakos grow maize and other drought-resistant crops for domestic consumption and sell whatever little surplus they have at the gates of their farms and in local markets. Until recently, Alice struggled to make a decent living from her small plot of land and small grocery. She did not have the inputs required to increase her productivity, and her farming skills were basic at best, learned through season after season of trial and error. Farming was frustrating because it barely gave her enough money to feed her three children, take them to school, and pay hospital bills. But without capital and the requisite skills to expand her income sources, it was the only thing she could do.

Alice’s story is not uncommon. Smallholder farmers across Africa still face obstacles accessing suitable, affordable financial services. This is especially acute for women.

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> Posted by Jason Loughnane, Special Projects Manager, DAWN Microfinance

The following post was originally published on the Accion blog.

The future of finance in Myanmar is digital. The population has rapidly adopted smartphones, while the economy continues to operate almost entirely in cash. The mobile money ecosystem, while still nascent, is attracting attention from investors and journalists alike. Accion believes that mobile money will enable microfinance providers to substantially increase financial inclusion in Myanmar, and we will continue supporting our partner, DAWN Microfinance, to realize the substantial benefits of this digital transformation.

DAWN’s Founding and Accion’s Involvement to Date

DAWN Microfinance was founded by Save the Children Myanmar in 2002 to provide loans to groups of pregnant women, enabling them to afford prenatal care. Over the next 12 years, DAWN grew to become the third-largest microfinance institution in Myanmar, one with a strong reputation for client service and social mission, providing group-guaranteed loans to low-income women running small businesses from their homes.

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> Posted by Lauren Hendricks, Executive Vice President, and Christian Loupeda, Senior Director Financial Inclusion, Grameen Foundation  

This is the second post in a three-part series that explores the role of digital financial services in expanding women’s control over their financial lives. You can read the first post here.

For poor, rural communities “field force” workers such as mobile money agents or government agricultural extension officers can be lifelines to services and information that bring rural residents greater control over their financial lives and help them increase their incomes and gain a connection to the larger world. But, for women, rather than a bridge, field force workers too often end up being one more hurdle on the way to access resources.

Across the developing world, almost all agricultural extension services lack female participation. Women, on average, comprise 43 percent of the agricultural labor force in developing countries and account for an estimated two-thirds of the world’s 600 million poor livestock keepers. Yet only 15 percent of the world’s agriculture extension agents are women, and only 5 percent of women farmers benefit from extension services–despite the fact that women play a significant role in farming activities from production all the way to commercialization. Similarly, for mobile money agents, GSMA reports that among its members that report on gender, only 23 percent of agents and 37 percent of customers are female.

As Lisa Kienzle mentioned in her post in this series on digital financial services for women, Grameen Foundation has found that a woman often benefits from being able to work with a trusted agent who can directly help her understand and use the services available. That’s why we have helped to develop women as banking agents in the Philippines. We created an independent network of female financial agents who work out of their neighborhood sari-sari (variety) shops. The all-female network now includes 862 trained agents, who bring digital financial services to more than 66,000 low-income clients. Recruiting female agents benefits the end clients, but also the female entreprenuers who become agents who typically see an increase in their own income of at least 20-to-30 percent.

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> Posted by Saborni Poddar and Brett Hudson Matthews, Associate at MicroSave and Executive Director at My Oral Village

The financial inclusion industry often asks the question of how can we best configure mobile money products and services to support increased adoption and usage. But how about when prospective users are illiterate and innumerate (unable to decode large written numbers), as is the case for many unbanked individuals at the base of the pyramid?

In search of insights into designing mobile wallets for such illiterate and innumerate (oral) populations, we traveled through the Indian states of Punjab, Uttar Pradesh and Bihar, interacting with potential users. As our conversations got underway, and we began to understand the implications of designing a mobile wallet that an oral individual can use with ease, we could visualize why a conventional mobile wallet design would not be as clear to a daily-wage unskilled laborer as it is to the readers of this blog.

To start with, almost everyone we talked to had a feature phone, but most used it only for voice calls and were unfamiliar with basic syntax and navigation rules. Most could not use an address book; each time they make a call, they dial numbers from scratch. This gave us a first-hand glimpse into the potential intimidation caused by technology.

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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.