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> Posted by Rupert Scofield, Chair of the Partnership for Responsible Financial Inclusion (PRFI)

A meeting of the Partnership for Responsible Financial Inclusion in September 2017 (pictured from left to right: Shameran Abed, Jesse Fripp, Steve Hollingworth, Maria Cavalcanti, Michael Schlein, Sharlene Brown, Rupert Scofield, and Robert Dunn. Not pictured: Christian Pennotti, Mary Ellen Iskenderian, and Michael Mithika)

In 2011, I joined the inaugural meeting of CEOs that led to the formation of the Microfinance CEO Working Group. Nearly seven years later, my colleagues and I have continued to enjoy the trust and collaboration made possible by sitting together and sharing our strategies, challenges, and opportunities. We have encouraged the sharing of information among key senior staff in seven departments such as risk management, social performance, and digital financial services, across our networks. This collective of senior managers, which we refer to as peer groups, find the conversations at their levels insightful and that they allow for greater efficiency at solving common problems. In some cases, members benefit from non-proprietary work and processes developed by another. In other cases, we are creating the solutions together. Today, we truly recognize that we are no longer a working group, but a strong partnership committed to advancing financial inclusion in a responsible manner. It is my pleasure to share our new name: Partnership for Responsible Financial Inclusion (PRFI).

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> Posted by the Microfinance CEO Working Group

(click to enlarge)

What’s been happening with the Microfinance CEO Working Group (MCWG)? We’re glad you asked. Fresh-off-the-press is a new annual report from the MCWG, detailing the Working Group’s key accomplishments and activities of the past year. Consumer protection is among the standout areas for the MCWG for 2016. Over the course of the year, 14 local partners belonging to the MCWG network achieved Smart Certification, including BRAC Bangladesh, the first microfinance provider in the country and the largest in the world to reach the consumer protection milestone. In total, 21.9 million clients are served by 39 MCWG network Smart Certified institutions.

The MCWG is comprised of the leaders of 10 global microfinance organizations: Accion; Aga Khan Agency for Microfinance; BRAC; CARE; FINCA; Grameen Foundation; Opportunity International; Pro Mujer; VisionFund International; and Women’s World Banking. The newest member, added in 2016, is the Aga Khan Agency for Microfinance and its General Manager Jesse Fripp. The MCWG also harnesses the expertise of more than 40 senior staffers across the member organizations, who meet regularly across seven Peer Groups focused on specific areas of microfinance, from digital financial services, to social performance, to communications, taxation, and others. Members and local partners work with more than 89 million clients in 87 countries, providing them with financial services as well as other support to help them succeed and lift their families out of poverty.

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> Posted by Kettianne Cadet, Lead Analyst, Investing in Inclusive Finance, CFI

“Evolve or die, it is that simple!” remarked Kelvin Twissa, Board Member of FINCA Tanzania. His comments came during a session on Disruption at the recent Africa Board Fellowship (ABF) seminar in Cape Town.  In an era where business is definitely not usual, many incumbent financial institutions and their operating models are being threatened by disruptors, and the ability to continuously innovate and evolve has become an increasingly important ingredient for survival.

Graphic harvesting image from May 2017 Africa Board Fellowship Seminar

Graphic harvesting image from May 2017 Africa Board Fellowship Seminar

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> Posted by Pablo Antón Díaz, Research Manager, CFI

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Scott Graham, Daniel Rozas, and Pablo Anton-Diaz at the “Preventing Overindebtedness in the Microfinance Sector in Mexico” panel, XV National Microfinance Summit, Mexico City, Mexico, November 2016

For the past decade, in part fueled by regulatory changes in the financial sector, there has been an explosion in the availability of credit to low-income individuals in Mexico. The Mexican microfinance sector has become increasingly concentrated and highly competitive. In 2015, the 10 largest microfinance institutions (MFIs) in the country represented 81 percent of the total market size, with more than 1,500 smaller MFIs sharing the remaining 19 percent.

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> Posted by Center Staff

Last week, FI2020 Week created a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched FI2020 Progress Report. From November 2-6, 2015, stakeholders around the world participated in more than 30 events and shared their voices over social media, with #FI2020. As part of the week, global financial inclusion leaders offered calls to action. We started to provide highlights, but found that every single contributor had an important perspective to add, so this post includes all of their voices.

If there were any doubts about the potential to achieve global financial inclusion, it would be dispelled by the passion and sense of opportunity in the calls to action that were posted last week as part of FI2020 Week. A visionary tone was set by the inaugural posting by Ajay Banga of MasterCard, who declared that “financial inclusion is both economic and social inclusion and necessary for the future well-being of our planet.” Jean-Claude Masangu Mulongo, former Governor of the Central Bank of the Democratic Republic of the Congo, draws the link between financial inclusion, economic growth, and poverty reduction, while also—appropriately, given his role–noting the link to financial stability. Yves Moury of Fundación Capital heightens the urgency by stating that “poverty is the greatest scandal of our times,” and Martin Burt of Fundación Paraguaya adds that “poverty elimination must be the endgame of all financial inclusion strategies.”

This strong sense of social mission comes out in a call from Dr. William Derban of Fidelity Bank Ghana to “leave no one behind” in the march toward inclusion. Michael Miebach of MasterCard also talks about meeting the needs of all members of society, including women, and Bindu Ananth of IFMR Trust mentions smallholder farmers as another group that is often excluded. In light of breakthroughs in technology, Sonja Kelly of the Center for Financial Inclusion urges us to reach out to those who are traditionally excluded from technology, and not just early adopters. As Larry Reed of the Microcredit Summit Campaign puts it, “We need to approach the challenge with the end in mind, designing a system that can sustainably reach clients in the most remote areas and who transact in the smallest sums.”

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> Posted by Center Staff

FI2020 Week is a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched FI2020 Progress Report. From November 2-6, 2015, stakeholders around the world are participating in more than 30 events and sharing their voices over social media, with #FI2020.

FI2020 Week is nearing its end! Today is the final day. We’re sad too, but there are still lots of opportunities to get involved, and it’s been a lively four days. Also, we’ll continue to report out on all that happened, so there’s more to come! Along with the in-person events, there are a handful of webinars today, you can submit a call to action, or take part in the far-reaching social media conversations, which we’re capturing on the FI2020 Week site, here.

Since our last recap there have been dozens of events around the world bringing together stakeholders passionate about advancing financial inclusion. Here is a quick look at a few of those events:

Nkosilathi Moyo, CEO, VisionFund Zambia

Nkosilathi Moyo, CEO, VisionFund Zambia

In Lusaka, Zambia, representatives from a variety of organizations, including the Bank of Zambia, came together at an event hosted by VisionFund Zambia to discuss promoting financial inclusion by leveraging savings groups and microfinance institutions. Participating stakeholders identified three major gaps for achieving financial inclusion in the country: lack of a conducive regulatory framework; poor infrastructure; and information asymmetry between different players in the market. Moving forward, the participants agreed on the importance of convening and decided that an FI2020 event should be held each year until 2020. Additionally, the participants agreed, there needs to be a stronger focus on establishing strategic partnerships between mobile network operators, financial service providers, NGOs, and government to develop cost-effective delivery channels that reach people in rural areas.

Forty-five leaders in financial capability, financial literacy, and financial health came together at a roundtable in Washington, D.C. to review a draft paper on innovations in financial capability written by the Center for Financial Inclusion in partnership with the JPMorgan Chase Foundation. The event was hosted by the Institute of International Finance. The draft paper focuses on seven principles to re-orient financial capability building toward customer needs and behaviors, with a call to action to all stakeholders—providers, governments, social sector organizations, financial capability providers, and donors—to make this shift.

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> Posted by Alex Counts, Founder, Grameen Foundation

On Sunday, August 23, as I was enjoying some of the final days of summer visiting friends in New Hampshire, I noticed that I had been tagged in a tweet by Dean Karlan, the founder and president of Innovations for Poverty Action.  He provided a link to an article about FINCA that included extensive quotes from its CEO, Rupert Scofield.  He asked Rupert if he really believed microfinance could reduce terrorism, and asked me what I thought (“whatcha think?” was the precise formulation of his question).  He tweeted again on Monday, asking whether I was “still going to stand by [my] claim that no microcredit leaders make grandiose and overselling impact claims?”

First of all, I have never said that no microcredit leaders have ever exaggerated impact claims.  I believe that those exaggerated claims have been rare and atypical, especially in recent years.  In other words, the tendency for practitioners and advocates to make exaggerated claims not backed up by data has itself been quite exaggerated.

But I don’t think Twitter is the best medium for exploring such topics.  So I was grateful when the Center for Financial Inclusion agreed to publish this response to Dean’s public queries of me, in which I could address some related issues about microfinance advocacy and research.  (This post builds upon some of the observations I made in reviewing Dean Karlan and Jacob Appel’s impressive but flawed book, More Than Good Intentions.)

Regarding the article Dean tweeted about, I am supportive of Rupert’s statements and encourage others to read it and come to their own conclusions.  (Having been the public face of an international humanitarian organization for 18 years, I also realize that journalists sometimes focus on a very small part of what someone says in an interview, often on those things that are potentially the most controversial.)  For the most part, Rupert comments on specific microfinance clients he and the journalist met and on his past experiences and how they shaped his view of microfinance.  It’s impossible to challenge any of those observations and recollections.  They are statements of personal experience and opinion.

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> Posted by Bobbi Gray, Research and Evaluation Specialist, and Kathleen Stack, Vice President, Programs, Freedom from Hunger

Embed from Getty Images

Recently, Dean Karlan published an article in the Stanford Social Innovation Review titled “The Next Stage of Financial Inclusion.” The key points of his article are that while non-profits led the way in developing microcredit for the poor and started the movement for financial inclusion, for-profit companies have increasingly found it worth their while to offer financial services for the base of the pyramid. The entrance of new players to the market, Karlan offers, is a testament to the success of the early microfinance-focused non-profits. However, Karlan suggests that non-profits still have an important role in continuing to innovate in the financial services space. We agree. This is particularly true for extending financial services to people that banks still consider unprofitable: “the too rural, the too poor and the too young.” We would add disabled populations and the “too old.”

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> Posted by Madeleine Dy, International Programs Manager, Water.org

More than 100 leaders from the water, sanitation, and finance sectors came together October 21-22, 2014 for the second East Africa WaterCredit Forum in Nairobi to share progress made and to brainstorm lasting solutions to the water and sanitation crisis affecting East Africa. In Kenya, for example, access to safe water supplies is 59 percent and access to improved sanitation is 32 percent.

Water.org, in partnership with The MasterCard Foundation, convened the Forum, part of Water.org’s five-year collaboration with the Foundation to bring safe water and sanitation to economically challenged communities in East Africa through the WaterCredit approach. Since 2010, the WaterCredit initiative in Kenya and Uganda has empowered almost 115,000 people to obtain financing from seven financial institutions (FIs) for long‐term, sustainable water and sanitation solutions.

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> Posted by Sonja E. Kelly, Fellow, CFI

Embed from Getty Images

In most places around the world the subject of pensions is a sore one. In 2012, for example, in looking at arguably the crème of private employers, Fortune 100 companies, only 30 offered their U.S. new hires pension plans, down from 47 in 2008. For public sector employees in the U.S. in the same year, the pension plans of 26 states were less than 70 percent funded. In lower and middle-income countries where financial security is weaker, the situation is even worse. In India, the pension system only covers roughly 12 percent of the population.

The severity of these figures is amplified when we look at demographic trends. Between 2010 and 2020, the population of older adults will almost double in middle-income countries. Worldwide over the decade, it will increase by 40 percent. By 2050, there will be roughly 1.5 billion older adults, 315 million of whom will be in India.

Aging presents unique challenges and opportunities to the financial inclusion industry. During a session at the Microcredit Summit in Merida, Mexico a few weeks ago, five panelists met to discuss this topic. John Hatch (FINCA), Pilar Contreras (HelpAge), Caroline van Dullemen (World Granny), Reynold Walter (REDCAMIF), and myself all acknowledged the demographic reality—as populations age, if countries have not helped their societies and economies to prepare, they will face a global train wreck in the form of older people without adequate means of support and support systems that are overwhelmed. Financial inclusion can and should play a unique role in helping both individuals and whole countries mitigate risks.

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Credit Suisse is a founding sponsor of the Center for Financial Inclusion. The Credit Suisse Group Foundation looks to its philanthropic partners to foster research, innovation and constructive dialogue in order to spread best practices and develop new solutions for financial inclusion.

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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.