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>Posted by Center Staff
Peter Kasprowicz of Credit Suisse and CFI’s Elisabeth Rhyne have recently completed an examination of global demographic trends and their implications for financial inclusion. What they found could change how we think about financial inclusion. Elisabeth Rhyne will launch the publication, “Financial Inclusion and the Demographic Window,” at the 2012 Global Youth Economic Opportunities Conference hosted by Making Cents International. The Microlinks blog has posted some key findings from the publication in advance of its release. The post begins:
1. The youth bulge is ending for much of the developing world. It is axiomatic to think that in the developing world the population is very young and birthrates high. However, things have already changed for many of the world’s middle income countries. In Mexico, South Africa, and many other countries there will actually be fewer children by the end of the decade than there are today, while the number of elderly people, though still small, will grow rapidly. Only in the poorest countries, particularly in Africa, are children and youth still the fastest growing segments. For those countries with changing demographics, now is the time to begin focusing on the financial needs of older adults.
2. The “demographic window” challenges countries to use financial inclusion to make the most of a unique economic opportunity…
Read the rest of the article on the Microlinks blog.
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> Posted by Elisabeth Rhyne
According to the Financial Trust Index, a quarterly survey of public opinion, only 21 percent of Americans trust the financial system and only 23 percent trust large national banks.
On the other hand, nearly 63 percent, according to the same survey, trust credit unions. Hmm…impressive.
What’s more, in a survey rating the reputation of 34 different industries, credit unions had the most positive rankings, higher than all other segments of the financial system and also higher than non-financial industries including retail stores, schools, technology and communications companies, automobile companies, health care companies and the federal government. That’s right — numero uno.
Read the rest of this entry »
> Posted by Center Staff
The recent release of the Global Findex marked a crucial step towards global full financial inclusion. In a post on the CGAP Microfinance Blog, CFI’s Managing Director, Elisabeth Rhyne, discusses the importance of this financial inclusion database for providing demand-side data and allowing service providers to better understand client needs.
The post begins:
With the release by Gallup and the World Bank of the Global Findex (Financial Inclusion Index), the path to financial inclusion has just been made a little easier to travel.
Last year we (the Center for Financial Inclusion) asked practitioners, investors and others to tell us about the biggest “Opportunities and Obstacles to Financial Inclusion”. They identified “Limited understanding of client needs” as the fourth-ranked obstacle and “Improved demand-side information” the tenth-rated opportunity. The availability of data from the Global Findex will go a long way to satisfy those needs, and if data is as important as our respondents believe, it means that a significant constraint to inclusion is starting to give way. Read the rest of this entry »
> Posted by Center Staff
In their inaugural newsletter for Winter 2012, About Microfinance features a compelling interview with Elisabeth Rhyne. The interview highlights several topics, including the resiliency of microfinance institutions and some outlooks for the microfinance industry and for the Center for Financial Inclusion.
The interview begins:
About Microfinance: In your 2009 book, “Microfinance for Bankers and Investors,” you discuss the recent financial crisis’ impact on microfinance institutions. The book states that historically, in countries such as Indonesia and Bolivia, microfinance institutions have proven to be more resilient than traditional banks. Two years later, I’m wondering how the microfinance institutions are doing. Has the industry been resilient, has there been a sharp increase in participants in the last 3 years due to the financial crisis? Read the rest of this entry »
> Posted by Elisabeth Rhyne
As part of an effort to Map the Invisible Market, I’ve been looking at data from the World Bank [1] on population and financial inclusion, seeking to answer this question: how many of the world’s people are financially excluded, and where are they? It’s not hard to rough out a basic picture.
To start, let’s focus on people of working age, because data on their use of banks is readily available. In the world today there are approximately 4.2 billion working age people (between the ages of 15 and 65). That’s out of a world population that has just crossed the 7 billion mark. Of those, about 1.9 billion have a bank account in some kind of formal financial institution. They are, to use a word I dislike, “banked”. That leaves 2.3 billion “unbanked” who do not have an account. While having a bank account is not a definitive indicator of financial inclusion, it’s a useful proxy for creating a global big picture. We can consider people with bank accounts at least partially included. Of course there are also many other services that are widely used, like remittances or microloans. But bank accounts are the most widely distributed services in the world, providing a rough proxy for financial inclusion. Read the rest of this entry »
> Posted by Beth Rhyne
I had the opportunity last week to inform the philanthropic community about the Smart Campaign through a piece in the Philanthropy News Digest. For those of you who follow the Campaign, the piece may sound familiar. Nevertheless, it’s exciting to be able to get the Smart Campaign message in front of the broad range of people who work in philanthropy.
To read the article, please click here.
> Posted by Center Staff
While visiting India earlier this month, Beth Rhyne participated in an interview with the Indian newspaper, The Financial Express. The interview focused on the importance and state of client protection within the microfinance industry in India.
The interview begins as follows:
Financial Express: Why do we need a code for client protection in microfinance?
Rhyne: One of the starting points of the problems facing the industry was its rapid growth, leading to slippage in some of the standards. When you grow very fast, you can’t keep training staff fast enough to maintain the level of quality needed. Read the rest of this entry »
> Posted by Center Staff
Elisabeth Rhyne recently contributed a blog to the Huffington Post that explores the state of the microfinance industry in Bangladesh. The piece begins:
Ask a casual observer to describe microfinance, and most likely he or she will mention Bangladesh and tiny group-guaranteed loans for women. But on a recent trip to Bangladesh, I learned that the Bangladeshi microfinance sector has moved on. Way on.
The model of microfinance in Bangladesh, as it originated at Grameen Bank, involved tiny loans to women with fixed terms and amounts, group liability, weekly meetings, forced payments into a group savings account, and a set of 16 social pledges chanted each week while standing at attention. The Grameen model spawned imitators around the world, involving a large share of microfinance clients in India, the Philippines and East Africa, among other places. Read the rest of this entry »
> Posted by Beth Rhyne
With 2012 now here, the Center for Financial Inclusion’s target year for full financial inclusion – 2020 – is not very far away. If we peer carefully out into the horizon, we can already start to see the outlines of the world at that time. Demographers may disagree about projections far into the century, but the path to 2020 is pretty clear.
Of course, because the time is short, we know that in many or even most ways the world will be quite similar to today’s world. But changes have a way of sneaking up on us. Here are five important demographic trends that we need to consider as we chart a path toward full financial inclusion.
- Half a billion more people. World population is just now at 7 billion, and by 2020 it will reach 7.5 billion. All but a billion people will live in what were once known as developing countries, (but that designation will seem quaint and hopefully we’ll have some new language in use). India and China will account for 3 billion. As birth rates fall, population growth will begin to slow. The population of Eastern Europe is already starting to shrink, while that of Africa will continue to grow after all other regions have leveled off. Read the rest of this entry »
> Posted by Beth Rhyne
The microfinance community pursues a double bottom line: both social and financial. Originally, the social bottom line dominated, while the financial bottom line was seen as a means (not an end) of achieving social ends, particularly through scale and permanence. But as microfinance became more commercial, financial returns began to hog the attention. Not only are financial returns a great motivator, they are much more easily communicated, monitored and understood than social returns.
To correct this imbalance and put the social bottom line in its proper place, over 900 microfinance professionals joined the Social Performance Task Force (SPTF), a sector-wide group that has met for several years to develop social performance measurement, management and reporting. The enthusiasm of microfinance practitioners for the SPTF shows how serious the field is about the social bottom line. But although the SPTF has made very important strides, it has not yet cracked the nut.
What is the social bottom line?
The SPFT defines social performance as “the effective translation of an institution’s mission into practice in line with accepted social values.” This definition has two distinct parts – “mission translation into practice” and “accepted social values”. Read the rest of this entry »
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