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> Posted by Joshua Goldstein aka Mr. Provocative
#185088551 / gettyimages.com
Today, in 2070, with advanced robotization of jobs in all sectors, “work” has become a minority pursuit and financial inclusion is mostly understood to mean government cash transfers. Other financial products like loans are anachronisms of a bygone era. The government knows that such transfer programs like “unemployment benefits” are the only way to keep the anemic engine of demand alive for the goods and services that are now produced by a smaller and smaller sliver of the population who live in Byzantine splendor far removed from the humdrum circumstances of the vast majority. (Indeed in 2070, “unemployment” is a forgotten term from an era when “work” was a defining feature of life.) And the lack of work extends to what is today called “knowledge economy” occupations as well as almost every other category of white and blue collar work. Now, all humans enjoy a pension plan that goes into effect at birth and is more than enough to meet basic consumption needs. The benefit ends only with death by lethal injection at the mandatory termination age of 120.
Am I painting a scenario that seems wildly implausible? Perhaps.
> Posted by Center Staff
This edition of top picks features posts on how to effectively deploy new technologies to the base of the pyramid, the increasing prominence of mobile savings and credit services, and the growing potential for impact investing in microinsurance.
How can innovative technologies be distributed and adopted at scale in the last mile? Tomohiro Hamakawa of Kopernik addresses this question in a new post on Next Billion. Drawing from a recent Kopernik report, Hamakawa expounds on five key factors to serve as guiding principles in the roll-out of empowering technologies to the BoP: activating a local network of trust; lowering financial barriers; riding the technology adoption wave; focusing on tangible benefits; and staying engaged, showing commitment.
> Posted by Jeffrey Riecke, Communications Associate, CFI
M-Pesa, the mobile money service success story that began in Kenya in 2007 is continuing its march, this time into the surprising location of Romania, raising the questions, what will the product look like in this new European market and how will it fare. At the end of last month Vodafone, the operator behind the new service and one of Romania’s largest telcos, began operations using the country’s 300 Vodafone Romania stores, participating retail outlets, and authorized agents.
M-Pesa operates via SMS phone messaging and offers the ability to make deposits and send and receive payments to people and businesses – potentially an attractive prospect to the third of Romanians who don’t have access to formal banking services. Across the country there are about 7 million people who transact mainly in cash. The just-launched mobile service is estimated to be accessible to about 6 million people, and Vodafone plans to increase its in-country distribution points to a total of 2,000 by the end of the year. Vodafone has 8.3 million clients out of Romania’s 21.3 million population, the vast majority being active mobile phone users. The mobile money market in Romania is currently underdeveloped.
Of course, just because M-Pesa has achieved significant uptake elsewhere doesn’t mean that will happen here, too. Since the service first launched in Kenya, new M-Pesa outfits have been established in a number of other countries including Tanzania, Afghanistan, and South Africa. Within the past twelve months, the service also launched in Egypt, India, Lesotho, and Mozambique. Across these markets results have been mixed, with operators struggling to emulate the immense success achieved in Kenya.
> Posted by Allison Ehrich Bernstein, Executive Communications Specialist, Accion
Quick: Pretend you’re a telecommunications operator in Africa. Which country would you choose for the launch of a new mobile money network?
Since the runaway success of Kenya’s M-Pesa system, banks and mobile service companies have been looking for the next big opportunity to bring cell phone-based financial services to a whole new client base. While we haven’t yet seen anything on the scale of M-Pesa, numerous companies (e.g. Easypasia in Pakistan, bKash in Bangladesh) have been chipping away at its number-one position.
So, what’s your pick?
You might say a fairly stable country that already has a reasonably strong banking sector, like Ghana. Or a high-population nation like Nigeria, or perhaps a place like Zimbabwe, where the financial system could use a jolt. And those wouldn’t be bad ideas.
Established African mobile-service providers Zain Group and MTN are taking a very different approach, however: they’re setting up mobile money networks in the world’s newest country, South Sudan.
Even if it weren’t a nation less than three years old, South Sudan might not strike the average observer as the next “it” spot for mobile money. Banking penetration in-country is negligible; there’s currently neither the central infrastructure nor leadership for it. And mobile penetration was somewhere around 13-15 percent in 2012, according to an International Finance Corporation study and other sources.
> Posted by Jeffrey Riecke, Communications Associate, CFI
How can governments best regulate to advance financial inclusion? Effective regulation is often brought up when discussing essential components for expanding banking services. Like all industries, the world of financial services requires rules to ensure protection and fair practices. However, when it comes to advancing financial inclusion, the most effective way to handle regulation is not unanimous or even widely defined.
In recent years, more governments have taken steps to advance financial inclusion. Many have developed national inclusion strategies. A number have enacted regulation pertaining to new products and services, like mobile money. For government payment systems, such as social welfare benefits, some have switched over to electronic methods. Though on the whole, regulation struggles to keep pace with the increasingly complex services landscape, and progress is limited.
In the following video, global leaders discuss the role of regulation in financial inclusion, and how coordination within governments and between sectors can lead to more informed and enabling regulation and services environments.
> Posted by Adriana Magdas, Specialist, CFI 
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. This blog series spotlights financial inclusion efforts around the globe, shares insights from the FI2020 consultative process and highlights findings from “Mapping the Invisible Market.”
Cryptocurrencies, especially Bitcoin, the most famous, are the hot topic of the moment. In light of the shutdown of the most popular Bitcoin exchange in the world, Mt. Gox, and a loss of an estimated US$ 400 million worth of Bitcoins, it’s important to take another look at digital currencies, their pitfalls, and their relevance for financial inclusion. Hailed by many as the greatest monetary innovation of our time and by others as nothing but “libertarian exuberance,” cryptocurrencies show the opportunity that exists for financial transactions, especially international transactions, to move from cash to digital form. As someone working in financial inclusion, I have been wondering whether cryptocurrencies have any role to play in the critical path toward greater inclusion, which ultimately requires lower dependency on cash for low-income consumers.
Other cryptocurrencies abound—Dodgecoin, Litecoin, and Ripple are a few of the others—but Bitcoin, which launched in 2009, is the first decentralized mainstream P2P payment network and digital currency. Independent from hard, government-backed fiat currencies, Bitcoin is an internet-based, software dependent, inflation immune currency that can be purchased with cash and exchanged for services or goods with merchants who accept it. The market supply of Bitcoin is fixed at 21 million, meaning that once 21 million “coins” are in existence, the cash value will be fully determined by demand. In the last four years, the popularity of Bitcoin in developed economies has increased considerably, not necessarily because it’s an easier medium of exchange but because it is new, interesting, a source of revenue for Bitcoin miners and speculators, and because it decreases the costs retailers incur from accepting credit card payments. For example, Overstock.com is the first large online retailer to accept Bitcoins, in an effort to minimize the costs incurred from credit card transactions.
Does Bitcoin have any relevance for low and middle-income countries? As in developed economies, for P2P and P2C payments, its greatest benefit is in significantly decreasing the cost of sending remittances to friends and family. Bitcoin transactions are free, meaning remittance senders do not incur significant money transmitter fees.
But what are the challenges?
The challenges to Bitcoin in particular, and cryptocurrencies in general, are substantial. It will be a while before Bitcoin and other cryptocurrencies will be able to substantially help advance financial inclusion in developing countries. In the short-term, Bitcoin might take a significant chunk out of the profits of money transmitters and will definitely underline the appetite for monetary and payments innovation.
> Posted by Siddhartha Chowdri, Program Manager, Disability Inclusion, India, CFI
While attending the recent Techshare disability inclusion conference in New Delhi I was invited to attend a “High-Level Meeting on Inclusive Financial Service.” This meeting aimed at starting an intensive national dialogue on the use of technology in making banks in India more accessible to persons with disabilities (PWDs). This unique summit was organized by G3ICT, the Indian Banks’ Association (IBA), Xavier’s Resource Centre for the Visually Challenged (XRCVC), IBM’s Human Ability and Accessibility division, and the Centre for Internet and Society in Mumbai.
Ambassador Luis Gallegos, Chairman of G3ICT, Mohan Tanksale, Chief Executive of IBA, Sam Taraporevala, Director of XRCVC
Through the course of the afternoon many dignitaries shared their views and strategies on financial inclusion for PWDs. Senior leaders of the IBA (Mr. Mohan Tanksale) and the Reserve Bank of India (Ms. Sadana Verma and Mr. KC Anand) discussed the advances in regulation that have made banking more accessible to the blind and were extremely passionate about making the case to all financial institutions in the country that there is a legitimate business case for using available technologies to become more accessible.
After hearing the perspective of the banks and regulators the discussion turned to the technology providers. Mr. Nagesh Nayak of NCR gave us all a great lesson on how not to be accessible. NCR had the mandate to develop talking ATMs to enable visually impaired persons to access their accounts. He showed us a video that let us understand how the first talking ATMs did not actually improve access. For example, the ATM would ask the blind user to choose an option but then not say the options out loud. Then Mr. P. Ramachandran who flew in from IBM’s research headquarters in Austin, Texas explained how IBM’s Human Ability and Accessibility group is using technology to empower employees with various disabilities to make significant contributions to their business. If the likes of NCR and IBM can be so proactive in promoting accessibility and provide tools and case studies, then hopefully the financial service providers of the world will not be too far behind.
> Posted by Jeffrey Riecke, Communications Associate, CFI
Corporate social responsibility or profitability? Why are more and more financial services providers expanding their focus to include banking the unbanked? After all, many of those without formal financial services don’t have incomes to support big or frequently-used products, and their circumstances often present challenges for access, risk, and other services dimensions.
Industry activity in recent years, organizational objectives aside, has demonstrated the potential for sustainable and profitable investment in financial inclusion. Advancements in product design, technology, and risk management, and trends in demographics and incomes are making it increasingly possible for commercial financial services providers, as well as stakeholders in adjacent industries like telcos and technology providers, to support inclusion.
In the following video, global leaders discuss how financial inclusion is not only good for individuals, markets, and countries, but also good business.
> Posted by Pina D’Intino, Senior Manager, Scotiabank
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
This post is the second in a series of two posts from Pina on financial inclusion for persons with disabilities. Pina’s first post can be found here.
A study by the Martin Prosperity Institute in Canada estimates the buying power influenced by persons with disabilities (PWDs) is in excess of $US 26 billion in Canada. The same market is estimated to exceed $1 trillion in the United States by 2021. It is clear that PWDs represent a significant market in North America, but I believe they hold similar if not equal potential around the world. The World Health Organization estimates that 15 percent of the world’s population, over 1 billion people worldwide, live with a disability. This number is largely concentrated in developing economies, and is projected to increase considerably as the global population ages – a trend that has been highlighted in CFI’s demographic research. Engaging PWDs is essential when developing policies, standards, or products, or when selecting technologies for providing access to financial services. Otherwise, we risk excluding a population that can be viable consumers of financial products. Most importantly, culture needs to be shifted to embrace and recognize that PWDs have the ability to positively impact economic prosperity and that, along with the rest of society, must have equal access to education, employment, and financial independence.
How can financial services providers make a difference? It’s not rocket science. From including PWDs in the development of products and services, to the selection of technologies that are accessible to PWDs, financial services providers have a diversity of options for taking action and resources for understanding how to do so.
Engaging PWDs in Product Development
Financial services providers would not develop a product without getting input from their consumers. So why not include PWDs in the research conducted for product development or improvement? In Britain, Lloyds Banking Group convened a cross financial services sector focus group comprised of over 25 customer facing organizations and industry/regulatory bodies to discuss how to better respond to the needs of their customers suffering from dementia. After surveying caretakers and consumers, the consensus of the focus group, which included Business Disability Forum Partners: Allianz; Barclays; RBS; Santander; and Members: Aviva; HSBC; Legal and General; and Zurich, resulted in the creation of a charter on dementia-friendly financial services. This charter is intended to help financial services institutions recognize, understand, and respond to the needs of customers living with dementia and their caretakers and is an example of an institution that identified an obstacle in access by current and potential clients, conducted research within that client segment, and found a way to address it.
> Posted by Fernando Botelho, Founder, F123 Consulting
Microfinance institutions (MFIs) may not be aware of tools and resources at their disposal that can make it easier for them to work with persons with disabilities (PWDs) as clients or staff. A new tool launched a few weeks ago attempts to close this gap, “Inclusion of Persons with Disabilities in Microfinance through Organizational Learning and the Strategic Use of Low-Cost Technologies.” This tool is part of the Framework for Disability Inclusion toolkit produced by CFI through work with Fundación Paraguaya and others.
Need help? (Braille translation)
The new tool provides concrete guidance for selecting appropriate technologies, forming partnerships with disability-related organizations, and incorporating disability inclusion throughout an organization. It was developed by myself and my organization, F123 Consulting, inspired by our work with the staff of Fundación Paraguaya, to make their organization more disability inclusive.
For example, free and open source assistive technologies can be used by organizations that have an interest in ensuring that operational and financial viability are maintained. In that regard, it’s important to take advantage of the many available low-cost, high performing technologies, and to adapt instead of replace existing processes whenever possible. Managers don’t have to roll their eyes and fret about cost. Small modifications to already existing systems can often make MFIs accessible to staff and clients with disabilities. And the best part is that some of these modifications are free!
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