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> Posted by Eric Zuehlke, Web and Communications Director, CFI
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“I took today off because the stress is too high. I was going to borrow $200 from a friend and it fell through. I truly need it. I want to cry and can’t. I need it before the month is out. I had it and lent it to my family and I’m catching hell getting it back.”
— Tammy, age 60, U.S. Financial Diaries participant
According to the U.S. Census Bureau, the U.S. supplemental poverty rate is 15.5 percent, meaning that 48.7 million Americans live below the poverty line.¹ While poorer households face higher difficulties to make ends meet, households across the lower and middle-income spectrum in the U.S. struggle with income volatility, unplanned expenses, and finding ways to save and invest. But they also use creative ways to manage their budgets and money.
> Posted by Center Staff
This edition of Top Picks features posts highlighting findings from new research on the global mobile money industry and on remittances in Africa and Asia, as well as a post on how innovation can encourage savings at the base of the pyramid.
A new post on GSMA’s Mobile Money for the Unbanked Blog shares preliminary findings from the MMU 2013 Global Mobile Money Adoption Survey. The Adoption Survey, which offers insights on the development of mobile money services and how they’re enabling the expansion of financial inclusion, will be published at the 2014 GSMA Mobile World Congress, February 24-27 in Barcelona. These preliminary findings included a few industry milestones. A few weeks ago the global industry surpassed 200 mobile money service deployments to total 208 services spread across 83 developing countries. Mobile money services are become a mainstay among mobile network operators, rather than a differentiator. In Sub-Saharan Africa, for example, mobile money is available in 36 out of the 47 countries in the region.
In Africa and Asia, domestic remittances may far surpass international remittances in both frequency and magnitude, two recent joint-reports from the Gates Foundation and Gallup found. That’s the subject of a new post on the Financial Access Initiative Blog, which details the reports’ key results and provides a brief overview of domestic remittances, internal migration, and how they relate. The reports revealed that across the 11 surveyed countries, 14 percent of people had sent money to family or friends within the country within the previous 30 days, and that 32 percent of these respondents had been on the receiving end of such a money transfer. In contrast, one to two percent of people reported sending an international remittance, and about three percent reported receiving an international remittance, in the previous 30 days.
> Posted by Center Staff
This edition of Top Picks features three posts that each bring attention to a type of financial service: cash transfers both unconditional and conditional, mobile money, and gold savings and loans in India.
- In “The Life and Death of Cash”, a new post on the Financial Access Initiative Blog, Timothy Ogden discusses recent developments in the area of cash transfer programs. After offering an introductory overview on common perceptions of physical cash in the development and financial inclusion contexts, Ogden contends that the advent in recent years of conditional cash transfer programs as well as program evaluations have increased support for cash transfers on the whole. The post cites two recently published cash transfer studies, and includes a Q&A with Chris Blattman, who is an author on both.
- “I believe in the inevitability of mobile money, but I don’t believe we’re getting there very fast,” Ignacio Mas states in a recent CGAP Blog post. In this post on mobile money and why its successes are disappointingly slow and isolated, Ignacio tables the limitedly optimistic popular mobile money dialogue to examine barriers to industry growth, on both the demand and supply sides. Among the points made, Ignacio posits that mobile money programs don’t fit within telcos’ long-established decision models, that the services run counter to banks’ traditional attitudes and approaches to client touch-points, and that users largely do not see their mobiles as a store of value or as an expense management tool, but just as one payment instrument. Read the rest of this entry »
> Posted by Ignacio Mas, Independent Consultant
The following post was originally published on the Financial Access Initiative (FAI) Blog.
The fastest growing part of the financial inclusion movement isn’t a product or even a standard, it’s data and measurement. And if there’s something experts are increasingly agreeing on, it’s that it is illusory to try to define financial inclusion in any precise, universal way. John Gitau says he’s confused, and so am I. How do you measure financial inclusion?
It’s true that you might not be able to measure financial inclusion itself, but you can still measure things that indicate either actual, or the potential for, progress. Such indicators are what we can measure, and they are very useful as long we don’t confuse them with actual measurement of financial inclusion.
There are two broad types of indicators which can be applied to fuzzy concepts like our cherished financial inclusion, and let me illustrate each with an example of an equally fuzzy concept from outside our field.
The first set of indicators measure concrete things that enable the desired, fuzzier outcome. Think of it as pieces of the puzzle that we know are important even though we never get to see the full image of the puzzle. We can call these antecedent indicators.
If we want to know how to measure the state of democracy in the world, for example, we would start by listing the specific set of ideas that we expect would form part of democratic governance. Just looking at which countries run regular elections would be seriously misleading. We’d also want to know whether there’s freedom of the press so that people have a chance to make informed decisions; how easy it is to vote, as that ensures representativeness; how parties and campaigns are financed; how transparently votes actually translate into who holds power; the levels of government at which there is democratic election; the list goes on. And then there’s of course another pile of important considerations of democratic interplay during the time between elections, like mechanisms to protect minority rights or handling recalls.
> Posted by Center Staff
Financial inclusion efforts often emerge in places you wouldn’t expect. For this edition of Top Picks, we spotlight a few of these unsuspecting areas – financial services to support farmer migration, early stage impact investing – and share research on one of the inclusion community’s hottest topics: mobile money.
- Subsistence farmers in regions with long off-seasons face an essential question: Do you stay put and stretch incomes to withstand unproductive periods, or do you migrate during off-seasons to find temporary labor? A new post on the Financial Access Initiative (FAI) Blog highlights recent research from the Centre for Economic Policy Research on the potential for financial services to help farmers overcome the risks associated with migrating and attain supplemented incomes. The researchers found that offering a conditional cash or credit incentive for farmers to migrate nearly doubled their likelihood of migration, and that a large portion of these migraters continued doing so after the incentive was removed. Many of the surveyed reported forming relationships with their temporary employers and returning to work for them in subsequent off-seasons.
- The perception that there is a lack of investable opportunities is hampering the growth of the impact investing industry, according to Paul Breloff in a new Next Billion post. Managing Director of Accion Venture Lab, Breloff brings attention to recent reports from JP Morgan and Village Capital revealing this sentiment, and shares the investing approach of Venture Lab, which has yielded a strong pipeline of investable companies. Venture Lab’s three-prong strategy is invest earlier, tolerate more uncertainty, and concentrate on big-picture priorities over returns. Read the rest of this entry »
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