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> Posted by Center Staff
Remember the first time you tried to cook? Chances are you were nervous or at least apprehensive about how the food would turn out. If friends or family were in attendance, or, worse, were to eat what you were preparing, you were probably even less confident. Remember the second time you cooked? Or the third? Probably not. The more you actually got into the kitchen, the more your skills sharpened, and the more routine it became.
Using formal financial services for the first time, like cooking, can be intimidating – especially for people not used to interacting with formal institutions. Banks are big and complicated. A person of moderate means might feel that the bank will treat her as a low priority customer. And the notion of entrusting one’s livelihood to an unfamiliar entity is scary.
As part of CFI’s new financial capability project, we scanned the globe for the top innovations to help clients build their capability and make sound financial decisions. One of the behaviorally-informed practices we identified among these innovations as having great promise to affect changes in behavior is learning by doing, a strategy closely connected to effective, practical learning. Think of how much quicker your capability grew by actually cooking, than by reading a cook book.
Learning by doing, whether through technology-enabled simulations, or in real life with the supervision of front-line staff, enables customers to overcome the initial barriers to use that come with unfamiliarity and lack of confidence. Learning by doing offers customers the space to learn and get comfortable with financial products. This can be especially valuable for customer activation.
> 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 the Smart Campaign
The Smart Campaign is pleased to announce the release of a new tool to be used during the “Compulsory Group Training” portion of many group lending methodologies.
The tool – available for download on the Smart Campaign website – is designed to help microfinance institutions incorporate the Client Protection Principles into their compulsory group trainings (CGT). These trainings are group-level customer education programs MFIs use to interact with and screen prospective clients. CGTs are conducted by institutions practicing village banking methodology, and Grameen-style Joint Liability Group methodology, prior to the client group’s obtaining credit. The trainings are often the first formal interaction between the prospective clients and the MFI.
> Posted by Center Staff
As an industry, how do we ensure that clients are treated with dignity, even when they fail to meet their contractual commitments?
The Smart Campaign recently tried to crowdsource the answer from its more than 1,700 endorsers.
The Campaign’s fourth “Call for Tools” collected and sifted through MFIs’ best practices as embodied in documents about appropriate collections practices. Swadhaar FinServe Pvt. Ltd. (SFPL) won with their submission “Code of Conduct for Collections and Collections Practices for Group Loans.”
“SFPL won our Call for Tools because their policies and procedures for collections are a good example of how MFIs can provide staff with clear expectations for dignified treatment of clients during collections,” said Smart Campaign Tool Development Specialist Leah Wardle. “From their general code of conduct for collections, to their specifics on ethical loan recovery procedures, SFPL’s policies clearly embody elements of our Client Protection Principles.” Read the rest of this entry »
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