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> Posted by Virginia Moore, Communications Director, CFI
Last week, the Center for Financial Inclusion at Accion (CFI) participated in LendIt USA, an annual conference that brings together leaders and startups in fintech, lending, and venture capital to discuss trends, innovations, and the future of the industry.
So, what were we doing there? We attended to help introduce what we do to this audience of over 5,000 people, partnering with LendIt organizers to launch its very first financial inclusion track. CFI managing director Elisabeth Rhyne spoke on a panel about responsible credit along with representatives from the Consumer Financial Protection Bureau, the Marketplace Lending Association, LendStreet, and AEO. Championing the Smart Campaign and consumer protections, Beth brought a global perspective on what responsible credit looks like in practice. She also debated the elephant in the room—or as she put it, “the dead cat on the table:” interest rates. Our director of research Sonja Kelly also moderated a lively session on how smartphones in emerging markets are expanding access to credit with executives from Branch, Cignifi, Juvo, and PayJoy. We’ll have more on these sessions soon.
It was exciting and satisfying to see so much interest in financial inclusion from conference attendees who may not readily know the definition of financial inclusion, appreciate its value, or recognize how they’re contributing to it.
What Is the Value of Financial Inclusion to Fintech and Investor Communities?
One of the most surprising unveilings at the recent Mobile World Congress was the Nokia 3310, a reboot of a 17 year-old feature phone that stands out as intentionally basic amidst a dizzying world of smartphone bells and whistles. This phone boasts no cinema-quality camera, no super-fast internet, and no Candy Crush. In exchange, it offers a month-long battery life, a simplified user interface, and a price point of $49.
To me, this phone is a signal to emerging markets that the mobile industry has not forgotten that much of the world—about 37 percent of people in developing markets and 24 percent of people in developed markets, according to GSMA—will still not be using a smartphone by 2020. These populations are not making the shift for reasons like cost, battery life, and connectivity limitations. For them, the Nokia 3310 is a promising announcement.
In his research on the technology infrastructure surrounding digital financial services, CFI Fellow Leon Perlman points out that while feature phones are not disappearing any time soon, the choices for feature phones and options for people who need them repaired are shrinking. Perlman’s research, which will come out later this spring, underscores the need for the mobile industry to continue to provide valuable infrastructure to people who have not switched to smartphones. He cites the continued prevalence of USSD-based mobile money interfaces, which feature phones can utilize and which do not require internet connection, as a major incentive for continued investment in technology infrastructure for feature phones. If people cannot safely and effectively access their mobile wallets without switching to shiny new smartphones, mobile money will cease to be as inclusive as it claims to be.
> Posted by Pablo Anton-Diaz, Research Manager, CFI, and Sergio Navajas, Senior Specialist, Inter-American Development Bank
Financial institutions in the Latin American and Caribbean (LAC) region are not investing in fintechs. Over the years the financial institutions in the region have demonstrated their willingness to adopt creative new solutions, such as microcredit and agent banking in the quest to advance financial inclusion. But with fintech solutions, compared to institutions in other regions, Latin American financers have been reluctant to invest. Why?
> Posted by Jason Loughnane, Special Projects Manager, DAWN
In 2011, a SIM card in Myanmar cost $1,500 and mobile phones were used by less than 5 percent of the population. Following the entry of two foreign mobile operators in 2011, the price of a SIM card dropped to $1.50. Today, over 90 percent of the country’s population has a cell phone, and over 80 percent of those users have smartphones. And yet, only 6 percent of the population uses a formal financial institution, making the country ripe for adoption of mobile financial services.
> Posted by Sonja Kelly, Director of Research, CFI
We’ve been running the CFI Fellows Program for almost two years, with generous funding this year from the Rockefeller Foundation. The program has been a terrific experiment for many reasons. Now, while our current cohort of fellows is hard at work conducting their research, is a great time to stop and share some lessons we’ve learned along the way. The findings emerging from the program have also quickly become part of the continued learning and development of our expertise as an organization. Our staff engage closely with the fellows as they work, drawing from and contributing to their expert-level knowledge. And, on a personal level, I have come to understand financial inclusion in new ways.
As we’ve sourced topics, selected fellows, and engaged with knowledge communities, we have learned a great deal about people, organizations, technology and global trends. (You can see some of the specific findings coming out of the program here.) We also have gleaned observations about the nature of inquiry in financial inclusion, who cares about deeply understanding financial inclusion, and why financial inclusion matters.
Here are the top 10 things that I’ve learned thus far in the process of working on the CFI Fellows Program.
Read the rest of this entry »
> Posted by Center Staff
Last week the Kenyan government officially kicked-off Huduma cards, a fintech initiative aimed at bolstering government services in the country and digital financial inclusion. The program leverages partnerships with Mastercard and a handful of prominent banks. If successful, the new cards will simultaneously improve the government’s functioning, enroll more citizens in key government services like health insurance and social security, and provide digital financial services to many unbanked Kenyans.
> Posted by Jeffrey Riecke, Communications Specialist, CFI
If you had to embark on a journey similar to that of the 65 million people who are currently forcibly displaced, what would you bring? Most likely among your provisions would be a smartphone. Phones are the contemporary map and compass, a gateway to critical information, a means for keeping in touch with loved ones, and a financial toolkit. More and more, aid workers are witnessing refugees arriving at camps with smartphones. For both the refugee journey and the post-journey settlement process, a phone can be vital. With this in mind, you might not be surprised to learn that mobile money usage among refugees, including for cash transfers from governments and NGOs, is on the rise.
> Posted by Center Staff
(The following post is the second in a two-part series on Modelo Perú. You can find part one here.)
On February 16, 2017, Modelo Perú, a first-of-its kind payments initiative in Peru, will mark its one year anniversary. The initiative established an interoperable nationwide payments platform, Bim, with a particular focus on expanding access to underserved customer segments. Thirty three institutions, including microfinance organizations, commercial banks, and telecos, are participating in the platform, which was spearheaded by the Bankers’ Association of Peru (ASBANC). The interoperable mobile money platform is already a financial services feat. But we’re likely to see big changes between now and its second birthday.
CFI, in partnership with the Institute of International Finance (IIF), produced an issue brief exploring the progress and challenges the program has faced thus far, based on interviews with stakeholders. Last week, in part one of this blog series, we presented the challenges that have hindered the platform’s implementation to this point. This week, we look ahead to promising solutions to these challenges. Pagos Digitales Peruanos (PDP), the company running the platform, is currently recalibrating its goals while developing tailored solutions to each of the issues that have emerged. Below, we share an overview of four solutions PDP is exploring.