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> Posted by Susy Cheston, Senior Advisor, CFI

Of the 700 million new accounts that the Global Findex reports were opened from 2011 to 2014:

  • Banks and other financial institutions accounted for 550 million;
  • Mobile network operators accounted for 100-240 million, depending on your source and methodology;
  • Microfinance institutions accounted for 50 million.

These numbers are rough and involve some overlap—but they point to the continued importance of commercial banks in financial inclusion. Put another way, of the 3.2 billion accounts reported in the 2014 Findex, 3.1 billion were accounts with a financial institution.

That’s why I was so interested in hearing what the commercial bankers had to say at an Institute of International Finance (IIF) roundtable held in Lima on October 9 alongside the International Monetary Fund (IMF) / World Bank meetings. The strategies they discussed for reaching the BoP were not new to those immersed in the financial inclusion world, but it was heartening to hear their commitment to putting those strategies into operation. Here are a few of the points from the discussion:

Use data to understand customers. Now more than ever, there is a wealth of available data to help us better understand customers at the base of the pyramid. These new customer insights are opening up new practices – from on-boarding, to cross-selling, to risk management. Data analytics can also enable cost reductions on credit and insurance. For example, ecommerce platforms for small manufacturers can facilitate credit offers and then arrange for automatic repayment from the ecommerce activity itself. This innovative use of data allows financing at half the cost.

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> Posted by Joy Kim, Financial Inclusion Analyst, MIX

What’s better than reading about data? Visualizing it! Pardon us, then, as we offer a few words on CFI and MIX’s new FI2020 Inclusion Visualizer, a powerful tool to manipulate, visualize, and download images of data related to financial inclusion.

The Inclusion Visualizer, harnessing publicly available data from the World Bank, International Monetary Fund, Economist Intelligence Unit, and others, allows users to explore financial inclusion topics across country, region, and income levels. For the adventurous, users are able to customize the range of visualized categories and sub-categories. For example, do you want to know what percent of women with a primary school education or less have their own account at a financial institution? The Visualizer also offers targeted navigation options that focus on key areas, like the financial inclusion infrastructure, the policy environment, and technology.

How to Get the Most Out of the FI2020 Inclusion Visualizer

To get a better understanding of the landscape of financial inclusion around the globe, we suggest you begin by exploring Sections 1A through 1F. One particularly interesting section is Account Ownership (IC) because this metric is, perhaps, the simplest method for measuring financial access. Financial Inclusion Over Time (1B) illustrates changes not only in account ownership, but also with financial activities related to credit, savings, withdrawals, and deposits. As you’ll see, the world has seen growth in all of these activities with the exceptions of withdrawals and deposits, which implies that greater effort is needed on a global scale to increase usage of accounts.

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> Posted by Jeffrey Riecke, Communications Associate, CFI

Embed from Getty Images

Last week global leaders across industries gathered in the tiny mountain town of Davos, Switzerland for the 2015 World Economic Forum (WEF). (Though you probably already knew that, given the annual event’s ever-swelling stature and press.) The WEF fosters strategic dialogues in the hopes of developing ideas, insights, and partnerships around the most pressing issues and transformations reshaping our world. This year’s WEF included sessions from Jack Ma of Alibaba on the future of commerce, German Chancellor Angela Merkel on global responsibilities in a digital age, IMF Director Christine Lagarde on global monetary policy, former Israeli President Shimon Peres on political affairs affecting the region, and Bill Gates on sustainable future development. Of course we were following the topic of financial inclusion, and the action that got underway made it a week worth noting. Here’s a snapshot of some of the financial inclusion happenings at Davos.

In the “Inclusive Growth in a Digital Age” session held on Wednesday, a panel, which included MasterCard CEO Ajay Banga, considered how our age of digitization can confront income and wealth inequality, support investments in education and work-based training, and address vulnerable employment. Among the points of discussion was mobile phone penetration leveraged for financial services access. A full video recording of the session is available, here.

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> Posted by Vikas Raj, Senior Investment Officer, Accion Venture Lab

Last week, Raghuram Rajan was officially inaugurated as the 23rd Governor of the Reserve Bank of India. Rajan’s appointment has been greeted by a near obscene amount of excitement and adulation here in India, even by the standards of an often excessive Indian press. The front page of The Economic Times on Thursday (image at right) has Rajan sliding across the page, James Bond-style, rupee-barreled gun in hand. I am very much looking forward to seeing Janet Yellen or Larry Summers do the same.

Rajan’s academic credentials and work experience are indeed impressive – his previous position was chief economic adviser to the Prime Minister, and before that he was chief economist for the International Monetary Fund – but his main claim to fame is correctly predicting in 2005 that risky credit markets in the U.S. could lead to a global financial crisis. That position brought him much derision at the time, including from the likes of Larry Summers, but have of course since proven to be prescient.

But regardless of the strength of his professional and academic background, Mr. Rajan faces a herculean task as the new RBI Governor of a nation facing some serious economic crosswinds. India’s economy is growing at its most tepid pace in four years, its stock market has tumbled in recent months, and inflation continues to rise unabated. Perhaps most strikingly, the rupee has devalued versus the dollar by nearly 20 percent over the last four months. In the meantime, a national election is coming in the spring, which has effectively made consensus and compromise in the always partisan Indian government nonexistent. It will take all of Rajan’s skill to right the ship.

For those of us in the financial inclusion industry here in India, expectations are doubly high. India’s broader travails as an economic laggard affect us deeply, and Rajan’s initial statements and actions as Governor imply, at least, that he is willing to make big changes to help solve short-term monetary ills. If the initial reaction is any indication, Rajan’s presence and changes could actually help – the rupee rose 2.1 percent against the dollar and the Sensex index jumped 2.5 percent on Thursday. Getting India back on track is crucial for the financial inclusion space – low economic growth and persistent inflation hurt low-income populations in many different ways, including leading to fewer construction and manufacturing jobs and higher food prices.

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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.