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> Posted by Beth Porter, Financial Inclusion Policy Advisor for the United Nations Capital Development Fund (UNCDF) and the Better Than Cash Alliance
The following post was originally published on the Better Than Cash Alliance blog and has been re-published with permission.
Did you ever wonder why there is not International Men’s Day? There actually is such a day, by the way—it’s on November 19th, but there aren’t too many people marking it with a night off from cooking or cleaning or childcare for the guys!
The reason we celebrate International Women’s Day on March 8th each year is that the other 364 days look quite a bit like men’s days. In fact, globally, women spend an average of 4.5 hours a day on unpaid work, while men spend less than half that much time—and the unpaid labor gap is particularly large in developing countries. We are a long way from Planet 50:50 or gender parity. Indeed, the World Economic Forum predicts that the gender gap will not be closed until 2133.
This lack of parity manifests itself in many ways, including gaps in education, employment, and wages, and in the board room and public high office. And access to finance is no different.
While globally ownership of accounts is on the rise, the gender gap persists in developing countries, with the majority of the 2 billion globally without access to finance being women. We should not simply conclude that women do not want accounts—just as we cannot suppose that they do not want more education, the opportunity for gainful employment, or equal wages for equal work. We know that women living in a cash-only economy do not have adequate control over their finances, do not have the confidentiality they need to save and borrow and can only make or receive payments at others’ convenience, not their own. Wouldn’t a more plausible conclusion regarding the gender gap in financial inclusion be that women face barriers that men do not encounter in accessing financial services? Let’s explore this idea a bit further.
> Posted by Center Staff
Today, around the world individuals, governments, and organizations are celebrating women and calling for increased action towards gender parity, including in the financial services arena. And for good reason. Research indicates that when women control finances, they’re more likely to be spent on household necessities, like food, water, and children’s education and healthcare. In recognition of International Women’s Day, we compiled some of our favorite recent industry efforts to further financial inclusion for women. But first, here’s a quick run-down of where inclusion for women stands.
The Global Findex tells us that there is a gender gap in access to accounts at seven percentage points globally (65 percent vs. 58 percent), and across developing countries it’s nine percentage points. In some regions, this gap is significantly more severe – 18 percent in South Asia, for example. Gender gaps exist in other areas, too. GSMA estimates that in developing countries there are 200 million fewer women than men who own a mobile phone. And as one example of the gap in financial capability, in the World Bank Group’s 2014 Financial Capability Survey in Morocco women scored significantly lower than men.
Prioritizing financial inclusion for women is not only the right thing to do, it benefits everyone. In addition to benefitting women and women’s households, financial inclusion of women augments economies writ large. About half of women worldwide are missing from the workforce. In Egypt, for example, the IMF estimates that achieving equal labor participation among men and women would increase GDP by 34 percent. The IFC estimates that women-owned businesses have an unmet financing need of $320 billion worldwide.
Many organizations are working to close the gap:
> Posted by Carol Caruso, Senior Vice President, Channels & Technology, Accion
Isidro Medina Zapana, weaver, client of Accion partner Credinka in Peru
Peru’s pursuit of financial inclusion has set a standard, helping Peru capture the top ranking in the Economist Intelligence Unit’s Microscope for the last eight years. Accion’s Channels & Technology team, an advisory practice within Accion focused on digital financial services (DFS), recently returned from Lima, where we saw firsthand the exciting promise of digital payments in Peru.
Enabling Legislation
Innovations in financial technology are important to promoting financial inclusion, and the Peruvian government has passed critical legislation and regulations that enable developers to design and launch new products.
With almost 80 percent of Peruvians lacking access to a bank account, it’s clear why Peru’s government has committed so many resources to advancing financial inclusion. The government has launched diverse interventions in the past five years, and in August 2015 published a National Strategy for Financial Inclusion that outlines a more coordinated and cohesive approach to an issue that affects millions of Peruvians. The new strategy aims to provide access and responsible usage of a transaction account to at least 75 percent of adults by 2021.
The National Strategy’s focus on digital payments could bring about even greater impact, particularly in the harder to reach areas of Peru. Despite the fact that 80 percent of Peruvians are financially excluded, roughly 65 percent have mobile phones. Recognizing this, the National Strategy focuses on connecting those who have phones to financial services through digital payments adapted to the needs of the population. Even as recent as last month, the Bank Superintendent provided new electronic money issuer licenses to three service providers: G-Money, Servitebca, and Jupiter. This type of market stimulation is great news for Peruvian consumers and the payments ecosystem.
> Posted by Center Staff
2015 was a year full of great reads (and listens). As we enter 2016, we wanted to take a look back at last year and what we were most excited to explore. Through our work writing the FI2020 Progress Report, which assesses global progress in five key areas of financial inclusion, we benefited from important research from many in the financial inclusion field. As part of this effort, we were eager to update our FI2020 Resource Library with the most informative reports and research outputs. We encourage you to check it out – and in the meantime to review the highlights listed below. The organizations responsible for these reports cover a wide array of stakeholder types, from support organizations, to telecommunication companies, to financial service providers – proof that progress in financial inclusion is being driven by many.
What Happens to Microfinance Clients Who Default? (January)
The Smart Campaign
Author: Jami Solli
This report looks in-depth at the enabling environment, the practices of providers, and customer experiences in Peru, India, and Uganda, to understand what happens when microfinance clients default on their loans. We were especially interested in the paper’s findings that demonstrate that effective credit bureaus give financial service providers the confidence to treat customers who default more humanely.
Money Resolutions: A Sketchbook (January)
CGAP
Author: Ignacio Mas
This working paper explores the underlying logic for how people make money resolutions, including how people organize their money and make decisions about financial goals and spending. The paper focuses on peoples’ approaches to making financial decisions – rather than evaluating the decisions themselves – identifying the inner conflicts they face in the process.
> Posted by Mark Pickens, Senior Director, Visa
The future doesn’t come with an owner’s manual saying how to set up, operate, or troubleshoot it. When we launched mVisa in Rwanda in 2013, it was the first interoperable mobile phone-based payment ecosystem in any emerging market. We didn’t know what was possible. But we knew what we were aiming at. We wanted to make mobile money work better.
Nearly all mobile money schemes are “closed loops”. They do not permit funds to be shared with users of any other scheme. Since consumers cannot transact with everyone they want or spend everywhere they go, they see mobile accounts as less useful than cash. Fewer make the switch from cash, the net financial inclusion impact is stunted, and commercial returns are blunted. The idea of mVisa is to connect the closed loops by routing mobile money transactions via VisaNet, the global software and data centers that process transactions by more than 2 billion account holders and sustain more than 30 million points of access in the Visa network.
We chose Rwanda to pilot the mVisa concept. A smaller market makes it easier to know and be known by key stakeholders. That is an important consideration when starting a multiparty ecosystem that requires all players to move in a similar direction in a similar timeframe. Rwanda fit the bill well.
> 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
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.
> 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.
We’re two days in! FI2020 Week thus far has been a whirlwind few days, with events all over the world, a handful of public webinars, and robust social media conversations. We hope you’ve had the opportunity to take part in the action!
To get you up to speed, though certainly not comprehensive, here’s a snapshot of what’s been happening.
In Bangladesh, BRAC conducted an internal debate about the impact and benefits of its own microfinance program. Answering tough questions like “Does BRAC risk doing more harm than good by using microfinance in its model of fighting poverty?” staff shared their perspectives, providing insights into how to improve the program. Check out some of the presented arguments on BRAC’s Twitter feed.
In Nigeria, Accion and Accion Microfinance Bank discussed financial inclusion strategies for the country. The three biggest industry gaps identified were the lack of mobile and agent banking infrastructure, human capital in the microfinance banking sector, and a spirit of collaboration and partnership among the various players. Moving forward, the discussion participants will apply greater focus on savings as a necessary service offering that can be improved.
The World Savings and Retail Banking Institute (WSBI) conducted a webinar on the lessons drawn from a six year project (2009 – 2015) carried out with 12 WSBI member banks aimed at creating usable savings services in the hands of the poor. One call to action from the webinar was the need for greater connectivity to combat the challenge of reaching clients in rural communities. As WSBI aims to add 400 million customers to its network by 2020, it will need to partner with more organizations in order to reach very remote village groups.
> 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 upon us! Around the world, interactive and participatory events are underway to explore the most important steps to achieving financial inclusion. The range of events features representatives from banks, insurance companies, payment companies, telecommunication companies, policymakers, regulators, NGOs, microfinance institutions, investors, financial inclusion support organizations, financial capability experts, and fintech companies. Across events and participants, FI2020 Week’s focus is the calls to action generated from the guiding prompt: What is an important action needed in your country (or industry segment) to advance financial inclusion?
Below are some of the first comments by financial inclusion leaders. But first, here are some ways you can participate.
Join one of the 12 webinars hosted by Accion’s Channels and Technology team, Andares, AVAL, GSMA, the Helix Institute, IFMR LEAD, Innovations for Poverty Action, LeapFrog Investments, MicroSave, MIX, and the World Savings and Retail Banking Institute.
Check out the findings from the web-based FI2020 Progress Report—and see our high-level summary of messages in this new 8-minute video.
> Posted by Center Staff
Next week, CFI will launch the first-ever FI2020 Week. From November 2-6, 2015, over 25 partners across the globe will organize conversations exploring the most important steps to achieving financial inclusion.
FI2020 Week will bring together diverse stakeholders to conduct interactive and participatory events, each of which will produce calls to action. The range of participants will include banks, insurance companies, payment companies, telecommunication companies, policymakers, regulators, NGOs, microfinance institutions, investors, financial inclusion support organizations, financial capability experts, and fintech companies, from around the world. All of these participants will focus on the question, “What is an important action needed in your country (or industry segment) to advance financial inclusion?”
We want YOU to join us! Throughout the week, many FI2020 Week partners will hold webinars – an opportunity for those who will not be attending in-person FI2020 Week events to participate in a variety of interesting conversations. The webinars cover a full range of topics, from client protection in mobile money use, to incorporating financial capability into product design. Check them out below and register now to join hundreds of people around the world in FI2020 Week.
And for more information, check out our Storify feed of social media and blog postings on the FI2020 Week website here and follow #FI2020 on Twitter for the latest updates.
Client Protection and Technology: The GSMA Code of Conduct for Mobile Money Providers
Hosted by: GSMA
Date: November 4, 2015
Time: 9:00 am – 10:00 am EST
This session will discuss how the GSMA – the global association for mobile network operators – is working with its members to ensure that mobile money services are safe, reliable, and secure, and that customers are treated fairly. The Code of Conduct for Mobile Money Providers includes eight high-level principles addressing topics such as safeguarding customer funds, AML/CFT, training and monitoring of staff and agents, reliable service provision, security, and fair treatment of customers. This session will provide a brief background to the Code of Conduct initiative and outline the plan for implementation of the Code. It will be useful for regulators, financial inclusion specialists, consumer protection advocates, and any other stakeholders who are interested in understanding what mobile operators are doing to ensure the safety, reliability, and fairness of mobile money services.
Register now!
> Posted by David Tuesta, BBVA, and Sonja E. Kelly, CFI
A Spanish-language version of this post follows the English-language version.
YOU are a beneficiary of data. The materials in those shoes you are wearing were chosen over other materials because of data on cost, durability, and consumer opinion. When you go to the supermarket, you can easily find the chocolate bars because data told company marketers that if the chocolate bars are at the front of the store, consumers will be more likely to buy them. When you use public transportation, the fare you pay is based on data on the cost of the system and estimates of how many riders there will be.
Some people think data is boring. For those people, we say “tough luck.” Data is inevitable. Data provides the information on which economic decisions are based. More data provides more knowledge, information and transparency, helping all economic agents make better decisions, and through this, increasing society`s welfare.
It is no wonder, therefore, that data is critical for financial inclusion, as the financial services industry expands its focus toward harder to reach and lower income populations. The data we have on consumers helps to better understand how quickly financial inclusion is catching on and to tool financial services products appropriately to different market segments. Data at higher levels helps too: information about financial services providers is essential for regulators to monitor the market. Data matters, and it will shape the path of financial inclusion.
Last month at the invitation and of the Inter-American Development Bank we met at the IDB’s Washington, D.C. headquarters with a group of people from many institutions across the financial services industry from large international organizations to small research institutions to global banks to take stock of what data is out there, how much information could be available, how it can best be used, and how data efforts can be improved. There have been strong efforts to improve data from the demand side (customers), such as the Global Findex. Despite many data collection initiatives on the supply side (providers), there are still gaps that could be important for improving and evaluating convenience and
accessibility of potential financial services for those who are unbanked.
Read the rest of this entry »
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