You are currently browsing the tag archive for the ‘MSME Finance’ tag.

Our research agenda is out! How would you tackle these big, unanswered questions in financial inclusion?

> Posted by Tess Johnson, Research Associate, CFI

It’s the most wonderful time of the year! We are thrilled to announce that we are now accepting proposals for the 2018 cohort of CFI Fellows.

Building upon the impact of the CFI Fellows Program over the past three years, we’re looking for proposals from researchers and practitioners with demonstrated experience executing high-quality research projects from start to finish. Successful proposals will articulate a thoughtful and feasible response to one of the questions in our research agenda. Read the rest of this entry »

> 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 Iftin Fatah, Investment Officer, Overseas Private Investment Corporation (OPIC)

sewingLimited access to credit in the developing world is often exacerbated by conflict, which presents a strong demand for microfinance. In Iraq, for example, only 11 percent of adults hold an account at a formal financial institution, according to the 2014 Global Findex. The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, is helping to build a more inclusive financial sector in Iraq through its partnership with Vitas Iraq, a subsidiary of Global Communities, which is a non-profit development organization that partners with local stakeholders across a range of topic areas. Vitas Iraq established Al Tamweel Al Saree LLC (ATAS) as the financing vehicle to support expansion of its operations. In 2012, OPIC provided ATAS with a direct loan to enable the expansion of Vitas Iraq’s portfolio of loans to individuals and to micro, small and medium-sized enterprises (MSME), thereby expanding financial access in Iraq.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Communications Specialist, CFI

Embed from Getty Images

A few weeks ago we saw the launch of a Sharia-compliant mobile phone-based loan service. The new service, called Trust Network Finance (TNF), was rolled out by Allianz in Indonesia. TNF reflects the big opportunities in Indonesia for mobile money and for Sharia-compliant services.

Although roughly 60 percent of Indonesians have a mobile phone, only 3 percent of the population is reportedly aware of mobile money. Indonesia has the world’s largest Muslim population, and Sharia-compliant finance has grown over the past few decades in the country; however by the end of 2016 Islamic financial institutions in Indonesia are only expected to hold 5 percent of the nation’s total banking assets.

Read the rest of this entry »

> Posted by Katherine Knotts, Freelance Writer and Editor

Rarely has a discussion on small business within the EU been had without wheeling out the stock phrase “engine of growth”. I’ve done it; you’ve done it. We’ve all done it. Policymakers do it too. Based on the commonly-held view that small businesses are both 1) job-creation powerhouses, and 2) centres of innovation, EU policymakers have designed national and regional strategies to tackle persistently high unemployment through supporting and expanding small businesses. A major part of this policy package is access to finance for small businesses, following the logic that addressing credit bottlenecks will unleash their potential. Here, “small business” is defined based on the size of the enterprise. However, mounting evidence points to a troubling conclusion: small may be beautiful, but it also may be the wrong policy medicine for the economic malaise in question. This has serious implications, especially when it comes to those financial service providers across Europe rushing to deliver ever-increasing amounts of credit to small businesses.

Consider the following home truths: most new businesses actually start small, remain small and die small, without ever realising their “job creation” potential. Half of the jobs created by micro, small and medium enterprises (MSME) in the EU are thanks to less than 5 percent of those firms (predominantly medium enterprises). In terms of growth potential, it’s far easier to “graduate” from a small to a medium enterprise than it is for micro enterprises to achieve “small enterprise” status. When you apply these trends to real-life scenarios – namely the number of firms that would need to be created to bring unemployment down to reasonable levels – the maths begin to look impossible. In some countries, the number of micro and small enterprises would actually need to double to generate a sufficient number of jobs. Given all of this, a more nuanced policy approach towards leveraging the MSME sector for job creation is clearly overdue.

Read the rest of this entry »

> Posted by Tyler Aveni, Positive Planet China

Embed from Getty Images

In an industry that is constantly evolving due to new technology and abundant knowledge-sharing opportunities, practitioners of socially-driven microfinance and inclusive financial services are also helping to drive new innovation. Accompanying research critically assists this process, especially in evaluating the impact of these new methods and initiatives. This presents a problem for countries like China where a dearth of credible (or existing) data resources makes a critical review of practices far harder to manage. As such, researchers interested in the world’s second-largest economy often must settle with statistics that may suffice but rarely meet higher standards found elsewhere.

The work of Li Gan, a Texas A&M professor who also heads the Survey and Research Center for Household Finance at Southwestern University of Finance & Economics (SWUFE) in Chengdu, China, is helping to address the problem. Professor Li has spent much of the last four years spearheading an effort to gather more data on the financial condition of Chinese households and businesses. Through generous funding by SWUFE and support from the PBOC, China’s central bank, Professor Li has set into motion two key multi-year surveys: The China Household Finance Survey (CHFS) and the “ChinaPnR-SWUFE SME Index” which looks at small enterprises.

Read the rest of this entry »

> Posted by Andrew Fixler, Freelance Journalist

Embed from Getty Images

Atikus, a new financial inclusion-focused enterprise, is gearing up to launch an underwriting platform and a credit insurance product in Rwanda for micro, small, and medium enterprise (MSME) credit. The insurance product is designed and brokered by Atikus, and ultimately backed by a local insurance company. I recently sat down with Kate Woska, co-founder and CEO of Atikus, to discuss financial innovation and her company’s work.

Microfinance has long benefited from careful experimentation and innovation. Initiatives that are targeting the base of the pyramid tend to be consumer-focused (e.g. micro health insurance or mobile payments development); however, according to Woska, these initiatives may be populating an industry that also suffers from institutional and market-level inefficiencies.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Senior Communications Associate, CFI

Embed from Getty Images

In most countries, you don’t hear much buzz about business-to-business (B2B) eCommerce. In the United States, for example, our eCommerce goliaths of the moment are Amazon and eBay, which focus on the business-to-consumer (B2C) segment. But this isn’t the case in China, where the B2B eCommerce industry is ballooning and drawing the rest of the world in. It grew by 32 percent to US$ 3.76 billion in revenue in 2014, and in the coming years the revenue growth rate is expected to stay over 20 percent. China’s B2B break-out market leader is Alibaba, which brought in about US$1 billion in B2B eCommerce revenue in 2014, comprising roughly 34 percent of the country market. Alibaba has been busy with B2B this spring, partnering with alternative lending startups in the United Kingdom to facilitate B2B trade between the two countries, hosting a B2B eCommerce competition in Hong Kong to support Chinese SMEs, and, as of this coming Monday, launching a new cross-border service on its 1668.com platform to facilitate foreign imports for Chinese SMEs.  

Read the rest of this entry »

> Posted by Center Staff

What are the most important questions that need to be researched in the financial inclusion arena?

The Center for Financial Inclusion at Accion will soon launch a fellows program to support research and thought leadership in financial inclusion – and we are calling on you to help! The purpose of this program will be to encourage independent researchers and analysts to examine some of the most important challenges in the financial inclusion arena. We plan to select a few priority research topics for fellows to examine.

Here’s where you come in. Below is a list of research topics that members of our Financial Inclusion 2020 team believe need answering. We’re checking in with you – our blog audience – to find out which topics you think are the most important to investigate. Please consider this list a starting point. Give us thumbs up or down on the topics listed, and propose topics of your own. Once we select the top priority questions, we will issue a call for proposals. Meanwhile, we offer this list to provoke a broader conversation about research needed in the financial inclusion field.

You can respond either in the comment block below, or by email to erhyne@accion.org.

Technology-related topics

  1. Impact of ubiquitous internet access on the business models for financial inclusion. By 2020, the vast majority of the world’s people will have access to internet through smart phones and tablets. Internet access could transform the way financial service providers and customers interact and facilitate a richer interface with customers. What scenarios are possible and are providers ready to respond?
  1. Under what conditions do “on-ramps” lead to deeper inclusion? With the World Bank’s commitment to Universal Financial Access focused on connecting people to transaction accounts, the next question is how (and whether) such connections lead to active account usage or access to additional products. What are the cases of successful access expansion that have led to deeper inclusion and why did they succeed?

Read the rest of this entry »

> Posted by Rishabh Khosla, Senior Investment Analyst, Accion Venture Lab

The following post was originally published on SocialStory.

Embed from Getty Images

The Indian financial services landscape is undergoing a tectonic shift. The last few years have seen a renewed public focus on expanding financial inclusion. Building off prior programs, the government has invested in regulatory reform, improvements to the banking system, payments, and ID infrastructure. They have also announced a series of programs targeting the bottom of the pyramid (BoP) and micro, small, and medium enterprises (MSMEs). Simultaneously, we are beginning to see real shifts in the adoption of digital technologies and banking services (such as basic savings accounts and smartphones), driven by compelling use-cases, such as government subsidies, delivered directly into bank accounts, and rickshaw-hailing apps that use mobile wallets. Together these trends are unleashing tremendous innovation with the potential to speed financial inclusion for millions.

As investors in early and growth stage “social” enterprises that are speeding financial inclusion around the world, we believe startups are uniquely positioned to navigate this shifting technological, regulatory, and competitive environment. Indeed, financial sector reform in India has had many false starts, and there are still many regulatory and structural hurdles to be overcome. However, we believe India is nearing an inflection point with changes playing out in three areas that are giving birth to exciting startup financial services models: MSME finance, digital payments, and consumer services.

Read the rest of this entry »

Enter your email

Join 2,355 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.