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> 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!
> Posted by Adam Brown, International Development Discourse Group (IDDG) Member
The following post was originally published on the IDDG Blog.
Since 2008, the Afghan mobile phone provider, Roshan, has worked to bring mobile money services to Afghanistan. With the support of USAID, all four of Afghanistan’s major mobile phone providers are currently developing mobile money capabilities. The highly successful rollout of Kenya’s mobile money and banking service, M-Pesa, has spurred a flurry of similar startup efforts – over 72 in 42 countries. Many countries, however, have failed to experience the kind of success that M-Pesa achieved, and Afghanistan is no exception.
While the mobile money program in Afghanistan is in its nascent stages, the factors that helped M-Pesa to succeed are generally lacking. The most important of these are, 1) a dominant mobile carrier; 2) an economy that depends on long distance money transfers; and 3) customer trust in the system. The Afghan mobile phone market is too divided to create the kind of widespread network required to attain the critical mass necessary for a sustainable customer base. Further complicating the issue is the fact that Afghans generally do not rely on remittances, limiting the utility that could draw future users. To fix that, mobile money providers should include banking mechanisms early in their programs instead of tacked on only once a money transfer system is in place. However, trust in banks, especially since the Kabul Bank scandal, may be too low for Afghans to put their money into another bank-like mechanism. While mobile money is not destined to fail in Afghanistan, proponents of mobile banking and USAID should adjust their expectations for success, or at least be ready to address the above issues.
> 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.”
In 1998, I unexpectedly lost my sight as a result of a medical complication. One of the first things that struck me was the impact this disability had on my day-to-day living, including my ability to independently and confidentially access and conduct my banking. Thankfully, I was still employed and could continue to save and invest towards the purchase of a home and ultimately plan for retirement. However, this proved to be much more difficult than I imagined.
Today, 15 years later, and after acquiring sufficient skills to use a screen reader, I am able to access my retail accounts for basic banking but am still unable to effectively use tools with my screen reader that will allow me to estimate the cost of purchasing a home or what my mortgage would be, nor am I able to independently use simple investment or trade tools that would allow my savings to grow. All this despite the evolving technical enablers and my digital literacy increasing.
As more and more branches are moving towards self-service tools, it has become harder to meet in person with a financial advisor. And yet, I cannot independently access information that would allow me to make informed decisions, cannot independently conduct or monitor my investments, and need someone to read to me the complex and lengthy application forms that I need to complete. Furthermore, if I go to a branch with someone else, at times, the staff will not allow me to include the person in the conversation unless a proxy or power of attorney is on file for them to disclose any personal information. At other times, they will speak to the person who comes with me, rather than speaking to me directly. Read the rest of this entry »
> Posted by Center Staff
You’d be forgiven for not noticing, but last week, the CFI Blog published its 1,000th blog post. We started this blog in September 2008 in conjunction with the Center’s launch, as a forum for discussion, analysis, and even debate on the many issues facing financial inclusion. A lot has changed since 2008. The past few years have seen a shift in focus toward wider financial inclusion, moving beyond microcredit to include services such as savings and insurance. Technology, through mobile banking, big data, and other developments has made greatly expanded access to financial services. Client protection has become more firmly embedded into the microfinance industry. And yet, the quality of services and effective regulation continue to be as important as ever before. Going through our archives, you can see these shifts before your eyes. As this blog goes on, in addition to being a platform for sharing the latest developments and insight, it has become a historical record of how the microfinance industry has developed and changed.
This blog couldn’t be successful without the input of our many guest bloggers over the years who have leant their insight and expertise. If you ask us, it’s this range of outside expertise that makes this blog successful. We thank all of you who have written for us over the years and all of you who have shared your thoughts by commenting on our posts (5,557 comments and counting!).
Feel free to browse through our posts throughout the years via the “Archives” drop-down menu on the left-hand side. Here’s to the next 1,000!…
All-time most-read blog posts:
5 Great Books About Microfinance and How the Poor Use Money (August 23, 2011) by Yvonne Chen
5 Countries Where Microfinance Works (February 18, 2011)
Nicaraguan Microfinance in Crisis (November 5, 2009) by Sergio Guzmán
Interest Rates 101: APR vs. EIR (June 8, 2010) by Courtney Piper
Microfinance vs. Financial Inclusion: What’s the Difference? (February 27, 2013) by Susy Cheston and Larry Reed
> Posted by Danielle Piskadlo and Jeffrey Riecke, Senior Program Specialist and Communications Assistant, CFI
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.
Thanks to social media, we are in a new era of sharing. Everything from major life events to fleeting thoughts like “I’m hungry” get posted, tweeted, and shared within social circles these days. And the provision of financial service – once a private affair – is not immune.
Sites such as Prosper and Kickstarter are among the many new crowdsourcing websites that allow people to share – in fact, advertise – their status of “I need a loan.” And these sites are revolutionizing what it means to be an entrepreneur or artist today by smashing the barriers to entry for funding a new idea, skill, or product.
In a big way, the days of trying to explain the market potential of your business plan for a trendy new app to a banker are disappearing as are the days of playing your music in the subway or selling your art on the sidewalk, hoping to get discovered. Now, almost anyone with a product or craft can simply post it on one of many sites to crowdsource the funding.
One of the beauties of crowdsourced financing is that it allows an entrepreneur or artist to assess market demand. The crowd tells you if your idea or art has potential by funding it. And distributed funding requests allow entrepreneurs or artist to tap into social networks for support in a meaningful way and without any real risk.
There are many crowdsourced financing platforms out there, and lots of different business models, so let’s take a closer look at one of the more prominent outfits: Kickstarter. Since the service began in mid-2010, more than 4.9 million people have backed a Kickstarter project, pledging over $800 million across 49,000 projects.
> Posted by Loretta Michaels, Partner, HMS Wireless Consulting
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.”
A good webinar yields more questions than there is time to answer, and the Financial Inclusion 2020 launch webinar was a case in point. Participants asked some excellent questions we couldn’t address during the webinar, so we are now following up on some of the questions about technology. For answers, we turned to Loretta Michaels, who facilitates our FI2020 Technology Working Group.
Q: Andrew Pospielovsky (Egypt): Clearly technology will dramatically increase access to financial services, and this process of technological development is self-sustaining even without funder intervention. I believe the real challenge for development agencies and regulators is protecting the bottom of the pyramid from technology being exploited by predatory practitioners (such as payday lenders charging four and five digit effective interest rates). How can we tackle this challenge?
A: You bring up an important point that connects to FI2020’s focus on quality, not just access. CFI believes that advances in financial inclusion need to go hand-in-hand with adequate protections. In my experience, while there will always be “predatory practitioners,” new technologies help reduce the opportunity for fraud and exploitation by providing an electronic record of all transactions, automatic rather than arbitrary calculations of interest rates and charges, and greater overall accountability compared to manual operations today.
Technology per se will not solve all problems out there, but it does provide tools that make it easier to prevent and resolve the issues that come up. Many of the broader responses to predatory practices remain the same whether there’s technology involved or not: user literacy and education, training, proper oversight and regulation, and greater transparency.
> Posted by Paul Breloff, Managing Director, Accion Venture Lab
The following post was originally published on the CGAP Blog.
In my last post, we talked about the potential for start-ups to shake things up in the financial inclusion space. But where’s the real opportunity today? At Venture Lab, we’ve got our eye on a number of trends for 2013.
First, mobile. There’s no denying the increasing ubiquity of mobile phones – over 4 billion in the developing world and counting – and we’re excited to explore the ways that mobile phones provide a channel to reach people with financial services. Our financial inclusion community has long focused on the growth of Kenya’s M-PESA, and no doubt, with over 16 million customers and 80 percent of the nation’s population having used it last year, it’s an iconic story in a sector thirsty for scaled success stories. Hopefully, markets like Pakistan, Tanzania, and Mexico won’t be far behind.
But there are other ways mobile can enable more widespread access to financial services. Take Coda Payments, for example, one of our first investments working in Southeast Asia. Coda operates a payments processing platform that connects with mobile network operators’ (MNO) billing systems and enables customers to purchase digital goods with a straightforward deduction against prepaid airtime. Think apps, e-content, information services, insurance premiums, and more.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
Those of us living in higher-income countries rarely think about something that dominates our financial services: everything’s digital. From checking balances, to transferring money, to making payments, nearly everything’s digitized and accessible with an internet connection. However, for the 2.5 billion people who don’t have an account at a formal financial institution, making a payment or receiving money isn’t as simple as a few computer mouse clicks or a few seconds at an ATM machine. Managing finances the old fashioned way, with cash for transaction and jewelry, livestock, etc. for savings, creates numerous challenges and limitations. In A Digital Pathway to Financial Inclusion, a new report from Dan Radcliffe and Rodger Voorhies of the Bill & Melinda Gates Foundation, the divide between cash and digital is examined, and a portrait of digital financial inclusion, and how we might reach it, is presented.
Compared to those using digital financial services, those using physical methods incur storage risks, transport costs, and psychological barriers to saving, Digital Pathway claims. On top of these, handling finances physically effectively drives a wedge between unbanked individuals and the formal economy as it’s more costly for the organizations and institutions of the formal economy to transact with people who are not “hooked in.”
> Posted by Anita Gardeva, Senior Analyst, CFI
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.”
“Big data.” This is the buzzword for the use of the unprecedented amounts of information about individuals, their actions, and their preferences that is now becoming available through electronic transactions. This information has the potential to unlock powerful transformations in both the business and policy worlds.
At the Center, many members of our Financial Inclusion 2020 campaign point to the potential of “big data” throughout our consultative process to build a roadmap to inclusion. There is a general consensus that data analytics will change the face of financial inclusion in far-reaching ways. Analysis of big data can improve the operations of financial services providers to expand access, decrease costs, and improve products. It can also result in smarter policies. Below we break out four ways data analytics can play a role in advancing financial inclusion:
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