You are currently browsing the tag archive for the ‘Mobile Banking’ tag.

For Telenor Group, the key to fostering inclusive digital finance is collaboration and open technologies.

By Johanna Stemberger, Telenor Financial Services

The digitization of the financial services industry is in full swing. Seamless in-app payments enable smartphone users to pay for rides, tickets, food, etc. with just one click.
Pay with Wave Money AdIn emerging markets, where most of the world’s 2 billion adults without bank accounts live, basic financial services have improved over the last decade: mobile operators and banks enable customers to store and transfer funds using their mobile phones. Still, developers and digital innovators struggle to reach users in these cash-based markets.
How can we foster innovation in financial technology for low-income consumers through products and services that promote digital financial inclusion? Telenor Group believes the answer to this question is to collaborate and open up. We’re going to discuss two examples below.
Read the rest of this entry »

> Posted by Carol Caruso, Senior Vice President, Channels & Technology, Accion

Providing micro financial services is often a costly endeavor. As practiced in most places today, it involves many manual processes which limit the potential for scaling up and expose vulnerability to poor service, errors, and fraud. Furthermore, as telco operators and fintech companies bring services to customers through new distribution mechanisms, microfinance banks (MFBs) need to explore innovative ways to competitively deliver their services. Hence, it is promising to see a rise in the use of tablets, smartphones, and other devices housing applications that digitize field operations. Digital field applications (DFAs) offer MFBs a way to take advantage of technology to solve some of these challenges. Globally MFBs have deployed DFAs in a wide variety of ways. For example, loan officers equipped with DFAs can process loan applications and answer client inquiries in the field, eliminating paper forms, digitizing data, and saving time and money for organizations and their clients. Bringing financial services out to clients can achieve a much-needed personal touch and can even increase the richness of the client interaction. For example, client education and consumer protection awareness can be more effective when digital messages are delivered by a field staff member. DFAs can also improve credit operations. When assessing loan applications and risks, field officers can operate more efficiently if digitally equipped.

In order for MFBs to successfully leverage these tools, both for their and their clients’ benefit, they must understand their business case, and incorporate best practices for implementation that have been derived from lessons learned by others. There is no shortage of pilots that have been halted due to challenges arising from lack of experience and understanding – despite hardware availability or subsidies.

With this in mind, Accion’s Channels & Technology group have published a case study aiming to provide some clarity on the impact of DFA use by examining the business case, implementation process, and effects for three MFBs: Ujjivan Financial Services in India, Musoni Kenya, and Opportunity Bank Serbia (OBS). Our case study presents a consolidated review of the findings from the three MFBs, with an accompanying Excel-based business case toolkit, available for MFBs to examine the potential impact a DFA might have on their business. Individual cases presenting the findings from each institution are also available – here, here, and here.

Read the rest of this entry »

> Posted by Stuart Rutherford and Paul Vander Meer

ROSCAs, or rotating savings and credit associations¹, have enjoyed good press lately in the United States. The New York Times just ran a story about ROSCA users in some states earning themselves formal credit scores; Kim Wilson at Tufts University tells of a New York banker who awarded an immigrant family a mortgage after reviewing their success in making ROSCA payments²; and the U.S. Financial Diaries research project notes that ROSCAs can be the “preferred” financial tool even for people using formal banks. eMoneyPool, based in Arizona, offers Americans the chance to join simplified online ROSCAs. There are online ROSCAs in India, too, and researchers from Ithaca College note that in India “ROSCAs remain strong despite greater financial inclusion.” Similar studies find the same in other developing countries and in this post we introduce the ROSCAs of Chulin, some of the best-structured ROSCAs on the planet.

The renewed interest in ROSCAs is welcome. They are arguably the world’s most elegant, most efficient, and most reliable informal financial device, capable, at their best, of transforming the economies of whole communities, as we show in this blog. After years of relative neglect from proponents of “financial inclusion,” why are they now getting the attention they deserve?

Read the rest of this entry »

> Posted by Center Staff

A new micro-pension platform targeting those working as domestic laborers, appropriately named Gift a Pension, launched in India last month. The platform is run by the Micro Pension Foundation (MPF) nonprofit and gives employers of domestic laborers a convenient way to support their workers in enrolling for the National Pension Scheme (NPS) Lite government product, a smaller version of the NPS offering. Across the country an estimated 40 million work for households in roles including maids, guards, cooks, and drivers. In the weeks since the program opened, over 1,000 domestic employers have registered themselves and gifted pensions to their workers. The platform offers more than its name suggests, as gifting workers five-year term life insurance is also available.

Here’s how the service works. First, MPF encourages employers ensure that their workers understand the structure and benefits of any accounts before enrollment happens. The Gift a Pension site includes a collection of educational tools and videos for employers to use to aid their workers’ familiarity with products and with the importance of managing finances for the long-term. Once this initial learning phase is complete, the employer registers themselves with the Gift a Pension site and enrolls their worker using information from the various documents that satisfy the necessary know-your-customer requirements. To open the account, the employer pays a one-time servicing fee (Rs 300) as well as the first contribution into the account. The worker then receives in the mail a guide to go along with their new account and their personal prepaid pension card. In a few weeks’ time the worker will also receive a government-issued Permanent Retirement Account Number (PRAN).

Read the rest of this entry »

> 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.”

Read the rest of this entry »

> Posted by Eric Zuehlke, Web and Communications Director, CFI

Since launching microfinance activities in 1974, BRAC has grown to become one of the world’s largest financial services providers to the poor. BRAC’s microfinance operations, which include loans and savings, serve more than 5 million clients in eight countries. In 2012, BRAC started a financial education and client protection project that aims to help clients adopt financial behaviors that facilitate their well-being. Shameran Abed, Director of the BRAC Microfinance program, recently spoke with me to discuss BRAC’s work. Prior to joining BRAC, Abed served as an editorial writer at one of Bangladesh’s main English-language daily newspapers where he wrote primarily on politics. He also serves on the Board of Directors of bKash, a mobile financial services platform in Bangladesh.   

Eric: Can you talk about BRAC’s client protection work and what you learned from your project pilots in 2012 and 2013?

Shameran: We wanted to make sure that any clients coming into the BRAC microfinance program could be very well catered to. They should understand what our products are, what our terms are, what our rates are, and they should make an educated decision on whether they want to take our products. And if they do become our members then they should be treated well, treated with respect, and have access to information. I’m not saying that BRAC didn’t have all these things before two or three years ago, but we really wanted to double-down our efforts on these fronts. So that’s why we decided to do more work around client protection, client customer service, and financial education.

Eric: What do you think are the biggest risks facing microfinance clients?

Shameran: From a financial point of view, there are two or three risks that we’re particularly concerned about. One, of course, is something that’s been talked about a lot, the risk of overindebtedness. Bangladesh, although quite a mature microfinance market, is, in terms of overindebtedness, thankfully still quite low. But still I think overindebtedness is something that you always guard against because there is a lot of demand for credit and if microfinance institutions are not careful they can always have issues around overindebtedness of borrowers.

There are a lot of financial institutions nowadays that are kind of fly-by-night institutions that set up shop… Institutions that are typically unregulated. They come in, they offer products, they lure in clients, and then they disappear. I think around these issues the clients need more awareness, and these are some of the things our financial education components try to address.

Read the rest of this entry »

> Posted by Eric Zuehlke, Web and Communications Director, CFI 

Budding entrepreneurs, vendors, and everyday people in emerging economies are creating new ways of benefiting from the internet, using their own ingenuity in ways that go beyond the original intended use of many web-based platforms. A recent slideshow from Yiibu, a Scotland-based design and consulting firm, offers a dizzying array of examples of how people use the mobile web to sell and pay for anything you can think of, mostly in Asia along with the Middle East, Africa, and Russia.

The growth in traffic from growing economies is a familiar story (Yiibu mentions that Chinese, Indian, and Russian sites now make up almost half of the Alexa “top 20”). What’s new is how the mobile internet has opened up new ways of doing business for anyone with a smart phone. Individuals, small businesses, and major corporations are selling a jumbled mix of products and services, from cars and iPhones to handmade crafts to travel visa services.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Communications Assistant, CFI

Peru ranks as the developing country with the best environment for microfinance, followed by Bolivia, Pakistan, the Philippines, and Kenya, in that order. Latin America and the Caribbean is ranked as the best region in the world for microfinance, followed by Sub-Saharan Africa, Asia, Eastern Europe and Central Asia, and lastly the Middle East and North Africa. Globally, the microfinance industry is improving, fueled largely by an increase in credit bureaus, improving client protection, and the spread of regulatory frameworks for mobile banking.

These are a few of the big takeaways from the Global Microscope on the Microfinance Business Environment 2013, which was launched yesterday in Guadalajara at the IDB’s 2013 Foromic conference. Now in its seventh year, the Global Microscope annual series examines the environment for microfinance – and increasingly financial inclusion – by considering the national regulatory environment and the corresponding institutional framework.

Originally developed by the Economist Intelligence Unit in collaboration with the Multilateral Investment Fund and CAF, this year’s study is also sponsored by Citi Microfinance and CFI. This year’s report scores 55 countries, and in general, the global picture is promising. Since last year, 30 countries improved their scores, 19 fell back, and the scores of six countries remained the same. The majority of improvements this year came from advancements in institutional frameworks. The scores for regulatory framework and practices mostly declined.

As a region, Latin America and the Caribbean countries claimed half the slots in the global top ten, with Peru maintaining its previous ranking as the top country in part through improvements in regulation for mobile banking. Unlike the rising score for Peru, Bolivia’s score fell, due to restrictive new legislation, although not far enough to dislodge Bolivia from its number 2 ranking.

Read the rest of this entry »

> Posted by Megan Oxman, Innovative Finance Program Officer, Bill & Melinda Gates Foundation

The following post was originally published on Mobile Payments Today.

Imagine a global economy based entirely on cash. You receive your weekly pay in cash; you pay your rent in cash; you pay your monthly electric and water bills in cash; you apply for a loan and receive the money in cash; and you save cash under the mattress in case of an emergency. It seems almost unimaginable in the United States and Europe, but the fact is, of the 2.6 billion people who live on less than $2 per day, nearly 80 percent do not have access to a bank account.

Despite being disconnected from the banking system, many of the world’s poorest actively use informal financial tools. This means that they use cash, physical assets (e.g., jewelry and livestock), or informal providers (e.g., money lenders and payment couriers) to meet their financial needs — which can include receiving remittances, saving to buy fertilizer, and insuring against illness. Unfortunately, these informal tools are often unreliable, hard to use and expensive. And when large problems arise, such as a major illness in the family, the tools often break down, leaving the households exposed.

One of the great myths of the developing world is that the poor are in a static state of chronic poverty. In reality, many are constantly transitioning into and out of poverty due to cycles of fortune (getting a new job) or misfortune (health shock). The right financial tools can help a poor household capture an opportunity to move out of poverty, or weather a shock without being pushed deeper into poverty.

At the Bill & Melinda Gates Foundation, the Financial Services for the Poor team believes that better, more formal financial tools can substantially lower the cost of shocks to the poor. At present, banking services are prohibitively expensive for the poor to utilize, mainly due to the cost of distributing banking services through traditional channels such as bank branches and ATMs, high run-rates for opening and maintaining an account, and the lack of adjacent revenue pools like earning interest off large balances or providing mortgages. Innovative and sustainable methods are needed to provide affordable financial services to those who earn under $2 per day. One bright spot seems to be in the growing mobile industry. Thus far, we have seen a large drop in costs and increased access when mobile channels are used.

Read the rest of this entry »

> Posted by Hannah Henderson, Principal Director, Communications, Accion

The Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion explores the practices of investors in inclusive finance. Across areas including risk, governance, stakeholder alignment, and fund management, this blog series highlights what’s being done to help the industry better utilize private capital to develop financial institutions that incorporate social aims.

In the United States, online banking has become the norm for many, with over 63 percent of U.S. households now using online financial services.* I recall ING Direct putting branchless banking on my personal finance radar back in September 2000 with its do-it-yourself, low overhead, higher interest bearing online savings account. Just the other day, I read about a new online banking platform called Simple, which bills itself as a “worry-free alternative to traditional banking.” Simple is a purely transactional web-based platform that partners with The Bancorp Bank where customer funds are held.

The concept that banking could be simple, or better yet, worry-free, seemed a remote possibility not so long ago. In my own experience, I’ve found relative simplicity in online banking but my personal finances are far from worry-free. These days, I can easily move funds between my savings and checking accounts—even though they are with different banks. I can pay all of my bills online and keep an eye on my balance in real time. My mobile phone allows me to stay on top of my bills even when I am traveling. And my credit score only stands to gain as my auto-paid recurring bills no longer rely on my memory to be processed on time. What do I worry about? Cash flow, fees, and trying to get to the bank or ATM when I need to deposit or withdraw cash. I am fortunate to rarely worry about safety—but I live in a virtually crime-free neighborhood.

Read the rest of this entry »

Enter your email

Join 2,204 other followers

Visit the CFI Website

Twitter Updates

Archives

Founding Sponsor


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.

Note

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.