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> Posted by Lisa Kienzle, Director, Mobile Financial Services, Grameen Foundation
The following post was originally published on the ImpactX blog of the Huffington Post.
Women participating in paper prototyping for new mobile app in Uganda
Women are the backbone of the household in Africa — they manage the home, care for the children, are responsible for education and healthcare, and contribute to the household’s livelihood. Helping women helps the entire family. However, women continue to lag men in participating in the formal economy, including accessing financial services.
The Problem: The Poor — Especially Women — Are Excluded From Financial Services.
For the rural poor — especially women — accessing formal financial services is nearly impossible. Few have formal identification needed to open an account; others lack a stable job or collateral needed for a loan. Often bank branches are far from a rural village, making the trip to deposit or borrow funds too expensive and time-consuming.
Many of the rural poor have taken up an approach to support saving and borrowing by forming Village Savings and Loan Associations (VSLAs). Under this approach, 25-30 members of a community form a group. This group meets weekly and saves a fixed amount — at times, as little as 20 cents a week. The savings are lent out to members as loans. All money not lent out is stored by the group treasurer in a metal box secured with three locks and three keys, which are held by three separate key holders. It is, as some group members call it, the “Village Bank.”
> Posted by Elisabeth Rhyne, Managing Director, CFI
The following post was originally published on the Huffington Post World Blog.
The High-Level Panel of Eminent Persons on the Post-2015 Development Agenda, led by David Cameron, Ellen Johnson Sirleaf, and Susilo Bambang Yudhoyono, has released its recommendations for the next round of world development goals. This document launches what is sure to be a lively debate that will take place in the coming months, as the United Nations considers this report and prepares for the Secretary General to announce the official U.N. recommendations later this fall.
The Eminent Persons panel put forward twelve illustrative goals, ranging from 1) End Poverty to 12) Create a Global Enabling Environment, and touching in between on health, education, water, energy, and other priorities.
For those in my line of work, the immediate question is: How does the report position financial inclusion?
In recent months, when the subject of financial inclusion and the Post -2015 Global Development Goals (GDGs) comes up, someone is sure to say, “Financial services aren’t development goals; they’re enablers.” And this is the crux of a dilemma. The importance of financial inclusion is increasingly recognized. But if financial services are seen through an “enabler” lens, they would not appear in the top tier of GDGs, which revolve around outcomes of intrinsic value to people and nations. What is the role of an enabler like financial inclusion in a development framework that focuses on outcomes?
It looks like the Eminent Persons recognized this dilemma, and as a result, they had a hard time finding the right place for financial inclusion. They did address it, finally, by tucking it under proposed goal 8) Create Jobs, Sustainable Livelihoods, and Equitable Growth. Specifically, sub-goal 8c says, “Strengthen productive capacity by providing universal access to financial services and infrastructure such as transportation and ICT.” They put it into a section that is mainly about job creation, and then linked it to physical and communications infrastructure. Another sub-goal (2c) calls for equal rights for women to open bank accounts (along with the right to own property and sign contracts), implying that financial services are a necessary part of an economic identity.
The following post, written by Tilman Ehrbeck, CEO of CGAP, was originally published on the Huffington Post Business Blog, with the title Behavioral Insights to Advance Financial Inclusion — or Why Swedes Are Not Necessarily Better Human Beings Than Danes.
In Sweden, all new drivers start out registered to be organ donors in the event of their passing. They have the freedom to opt out without negative consequences. Fourteen percent decide to do so and 86 percent remain organ donors. Across the Oresund, less than 10 miles away, Danes have to proactively decide whether they want to become organ donors. Less than 5 percent do, and more than 95 percent don’t. On the global scale of things, Sweden and Denmark are culturally quite similar: generally credited with being open-minded, socially responsible, common-sense Scandinavians.
The vast difference between Swedish and Danish organ donor participation rates (technically “presumed consent”) despite all the cultural similarities is one of the most dramatic examples of the power of policy design that takes into account pervasive human cognitive and behavioral biases to help us do what we generally think is a good thing, but often have a hard time following through with. One such bias is that, when decisions are tough, we tend to prefer the status quo; and relatedly, it’s much harder to proactively opt for something, rather than to simply stick with the offered default choice. (The approach, popularized by the term ‘nudging,’ even led the UK Prime Minister to set up a ‘nudge’ policy advisory unit.)
> Posted by Center Staff
What is “money management”? And how is it significant for low income individuals? In a recent blog post on Huffington Post, CFI’s Managing Director, Elisabeth Rhyne, tackles these important questions and discusses their implications for providing effective financial tools and services to the poor.
The post begins:
It’s traditional for bankers and their customers to think about banking as centered on the bank account. Even policy makers talk about “banking the unbanked” as if opening a bank account immediately changes a person from financially excluded to included. The bank account is the top line indicator examined by the Global Findex, the new survey of financial access by 150,000 adults from over 148 countries. The finding that 43 percent of adults in the developing world have bank accounts has quickly become the reference point for financial inclusion. Read the rest of this entry »
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