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Customer research offers insights into the drop in financial product usage in Mexico.
> Posted by Pablo Antón-Diaz, Research Manager, CFI
Fish market on San Gregario Street in Xochimilco, a southeastern municipality of Mexico City, one of the places we visited for our user research.
According to the Global Findex, the percentage of adults in Mexico who are saving money at a formal institution plunged from 15 percent to 10 percent in just the past three years—despite financial inclusion strategies enacted by the government. This steep decline in usage of savings accounts came as a surprise, and hit close to home for me as a Mexican. This trend is a cause for concern, and it’s also a call to action. At Accion, we took this as an opportunity to listen to the people we’d like to see benefit from financial services. With support of MetLife Foundation, we wanted to understand why fewer people were saving in banks, what products and services people were using, and who was providing those services if it wasn’t formal institutions.
To get answers about what people in Mexico want from their financial service providers, I recently traveled home to Mexico City as part of a team of researchers. We listened to small merchants map out their entire financial lives—their motivations, goals and aspirations, how they feel about various types of financial services, the strategies they use to stay financially healthy, and more.
Our biggest surprise? The individuals we talked with know about and can access a lot of financial products—they just aren’t using them.
This blog from Accion in the U.S. was originally posted on NextBillion and is re-published here with permission.
By Gina Harman, CEO, Accion in the U.S., and Liz Urrutia, CEO, Opportunity International
The field of microfinance arose to address a pressing problem in emerging markets: Billions of people around the globe were shut out of, or poorly served by, the financial sector. But while microfinance institutions grew rapidly around the globe, so too did economic inequality in developed countries. It was within this context that organizations like Accion in the U.S. and Opportunity Fund adapted the microlending model to the United States more than two decades ago, expanding access to economic opportunity for entrepreneurs who lacked the financing and resources they needed to start or grow their businesses. In the ensuing years, the mission-based lending industry has continued to expand its services across the country – even in times of economic recession.
Our research agenda is out! How would you tackle these big, unanswered questions in financial inclusion?
> Posted by Tess Johnson, Research Associate, CFI
It’s the most wonderful time of the year! We are thrilled to announce that we are now accepting proposals for the 2018 cohort of CFI Fellows.
Building upon the impact of the CFI Fellows Program over the past three years, we’re looking for proposals from researchers and practitioners with demonstrated experience executing high-quality research projects from start to finish. Successful proposals will articulate a thoughtful and feasible response to one of the questions in our research agenda. Read the rest of this entry »
The new Gallup Global Financial Health Study contributes significantly to our understanding of how to make financial inclusion work for customers. This dataset comes at the perfect time—right on the heels of the Global Findex—and with it, we can start to ask ourselves with humility if financial inclusion is leading to financial health.
> Posted by Sonja Kelly, CFI, and Evelyn Stark, MetLife Foundation
Editor’s Note: This post originally appeared on the NextBillion Blog and is re-posted here with permission.
Read the rest of this entry »
A look at why #FinHealthMatters in the region
> Posted by Allyse McGrath and Jeffrey Riecke, CFI
This year on Financial Health Matters Day, we at the Center for Financial Inclusion at Accion are taking a look at the new Global Findex data and what it says about the financial health of respondents around the world. Because of our recent work on financial health in Eastern Europe and Central Asia, we decided to take a closer look at the Findex numbers from the region.
The 2017 Global Findex shows a substantial increase in account ownership between 2014 and 2017, from 62 percent to 69 percent of adults. However, one indicator that has decreased across this same period is the Findex’s proxy for financial health – the resilience question. This metric measures a person’s ability to come up with emergency funds in the amount of 1/20 GNI per capita in the next month (for reference, this is a little less than $3,000 in the U.S. context, and a little less than 700 dinar in Serbia). Isolating Eastern Europe and Central Asia, the percentage of people who said they could come up with this amount actually decreased slightly from 64 percent in 2014 to 61 percent in 2017.
Which topics would you most want to see researched?
> Posted by Sonja E. Kelly, Director of Research, CFI
Hi there. I would love your help as we select topics for our 2018 CFI Fellows research.
CFI is getting ready to launch the request for proposals for our 2018 Fellows cohort (a lot of you have been asking when it’s coming out, and the answer is SOON!). The CFI Fellows Program is designed to respond to questions we think are critical to the future of financial inclusion. Fellows come from many perspectives, including both relatively junior and senior well-known researchers, and including researchers who have been in the financial inclusion community for a long time and some who are perceptive outsiders. We share a set of topics for study, and ask interested researchers to submit research proposals that address the topic of their interest.
Our semi-final list of questions is long, and we ask for your help refining or prioritizing them – or adding new ones. We’ve enabled comments at the bottom of this post for your feedback. Alternatively, feel free to email me at skelly@accion.org.
Here are the questions we are currently considering:
Read the rest of this entry »
How can an app help improve financial health? Spoiler alert: offering users sound financial advice isn’t enough!
CFI and the Microfinance Centre (MFC) in Warsaw are working together to build a smartphone-based tool to assist customers with gauging and improving their financial health.
As part of the project, we developed a simple financial health quiz that will serve as the foundation of the application, helping users not only assess their financial health, but also understand and decide on specific actions to improve it.
Last year MFC tested the quiz among the clients and staff of organizations partnering with its Borrow Wisely Campaign in Eastern Europe and Central Asia. Our lessons learned from this testing phase are informing our next steps as we continue to design and build the application.
We released a new brief, “Toward a Financial Health Tool for Consumers” that distills the results of the tests and shares our lessons learned up to this stage in the project. Here’s a quick overview of our findings.
> Posted by Sonja Kelly and Elisabeth Rhyne, Director of Research and Managing Director, CFI
The World Bank is just days from releasing the next version of its Global Financial Inclusion Index (Findex), the authoritative data source on global progress toward financial inclusion. The dataset, which tracks financial inclusion in 150 countries, is released once every three years, and we have been waiting eagerly to see how things have changed since 2014. We are confident that the numbers will show enormous progress on the World Bank’s goal of universal access to financial accounts. But we wonder whether the news will also indicate that people are actually using those accounts and whether financial services are helping them achieve financial health, gain resilience and pursue opportunity – the ultimate goals of financial inclusion.
After we high-five the World Bank team for a job well-done, here are a few things that we will be looking for when we examine the new Findex numbers:
Athletes at the 2018 Winter Olympics face barriers to financial health
The following post was originally published on the Accion blog.
Nearly 3,000 top athletes from 92 countries are converging on PyeongChang, South Korea to ski, skate, sled, and curl their way to Olympic gold and glory. In addition to medals, some athletes will walk away with lucrative sponsorships. But others will return to part-time jobs, unemployment, modest stipends, and other financial situations that don’t make it on the front of a Wheaties box.
Unfortunately, gold, silver, and bronze don’t always translate to enough green for athletes to stay solvent. While medals often come with cash prizes — a gold medal will net a U.S. competitor $37,500 — these awards are only for a handful of individuals in each sport, and they pale in comparison to the funds needed to become a world-class contender. The prices of training, equipment, travel, healthcare, and other expenses add up for those competing at a global level. The high costs become particularly pronounced when you consider the increased likelihood of injuries, the difficulty of holding a full-time job while on a rigorous training schedule, and the fact that most sports only have a narrow window of time when athletes can compete in their prime.
Insights from a global seed-stage investor in fintech for the underserved
> Posted by Amee Parbhoo, Director of Investments, Accion Venture Lab
The following post was originally published on the Accion blog.
We’re in the middle of a fintech boom that could change the world. As a seed-stage investor in fintech for the underserved, Accion Venture Lab continues to see innovative startups increasing access to, reducing the cost of, or improving the quality of financial services for underserved individuals and small businesses around the world.
As we kick off a new year, we’re particularly excited about seven areas of startup-led innovation.
Digital neobanks
SmartMEI is a digital neobank serving small businesses in Brazil
In the last few years, we’ve seen the emergence of a number of digital neobanks. Neobanks offer a user-friendly digital interface and a platform for financial services without maintaining their own banking licenses. With a focus on user experience and digital applications, neobanks stand to offer faster and better service to the underserved. Moving forward, neobanks will need to provide both a compelling product for a targeted customer segment and a suite of offerings that go beyond basic accounts or credit cards to retain customers and improve unit economics. Innovators in this space include NOW Money, which offers migrant workers in the UAE a platform to more efficiently transfer remittances and access to other products and services over time, and SmartMEI, which offers small businesses in Brazil a free tax tool and access to a broader set of financial services.
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