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> Posted by Lauren Hendricks, Executive Vice President, and Christian Loupeda, Senior Director Financial Inclusion, Grameen Foundation  

This is the second post in a three-part series that explores the role of digital financial services in expanding women’s control over their financial lives. You can read the first post here.

For poor, rural communities “field force” workers such as mobile money agents or government agricultural extension officers can be lifelines to services and information that bring rural residents greater control over their financial lives and help them increase their incomes and gain a connection to the larger world. But, for women, rather than a bridge, field force workers too often end up being one more hurdle on the way to access resources.

Across the developing world, almost all agricultural extension services lack female participation. Women, on average, comprise 43 percent of the agricultural labor force in developing countries and account for an estimated two-thirds of the world’s 600 million poor livestock keepers. Yet only 15 percent of the world’s agriculture extension agents are women, and only 5 percent of women farmers benefit from extension services–despite the fact that women play a significant role in farming activities from production all the way to commercialization. Similarly, for mobile money agents, GSMA reports that among its members that report on gender, only 23 percent of agents and 37 percent of customers are female.

As Lisa Kienzle mentioned in her post in this series on digital financial services for women, Grameen Foundation has found that a woman often benefits from being able to work with a trusted agent who can directly help her understand and use the services available. That’s why we have helped to develop women as banking agents in the Philippines. We created an independent network of female financial agents who work out of their neighborhood sari-sari (variety) shops. The all-female network now includes 862 trained agents, who bring digital financial services to more than 66,000 low-income clients. Recruiting female agents benefits the end clients, but also the female entreprenuers who become agents who typically see an increase in their own income of at least 20-to-30 percent.

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> Posted by Lisa Kienzle and Gigi Gatti, Grameen Foundation

Nanays will use the Panalo system to conduct transactions for clients and provide them with receipts.

Women make great digital financial service (DFS) agents: they are often savvy at managing liquidity, effective at building trust, and perhaps most importantly, they are more effective at onboarding other women into DFS than men. This makes the recruitment and training of women agents an important strategy for closing the gender gaps in digital financial services and technology, and for ultimately ensuring universal financial inclusion.

Men in developing markets still outpace women in account ownership by 9 percent. The technology gap is even larger – women are 14 percent less likely to own a mobile phone than men. Given the growing emphasis on digital solutions to drive financial inclusion, this technology gap could further widen the financial services gender divide if not explicitly taken into account in the design of digital solutions. Women agents are a crucial element of that design.

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> Posted by Monica Brand Engel and Jackson Scher, Managing Director and Program Coordinator, Frontier Investments Group, Accion

Innovative payment solutions are proliferating globally. Enabled by the exponential expansion of mobile phones, social media, “big data”, and internet access, financial players throughout the world are inventing new ways to complete transactions. Disruptive innovations such as prepaid options, NFC-enabled payments, and cryptocurrencies are gaining significant adoption and are changing the payments space. These trends are especially pronounced in emerging markets where many new entrants have chosen to “leapfrog” traditional, resource-intensive systems and dive directly into the seamless and nimble world of digital financial services. Although these exciting innovations in digital payments have the potential to increase convenience for customers and dramatically reduce costs, some challenges remain. Read the rest of this entry »

> Posted by Rishabh Khosla, Tahira Dosani, and Vikas Raj, Accion Venture Lab

Small businesses are the engine of employment, contributing up to 85 percent of new full-time jobs in low-income countries, and two out of three new jobs in countries like the U.S. The IFC finds a strong correlation between the health of the small business community, economic growth, and poverty alleviation.

Despite these Herculean responsibilities, micro, small, and medium enterprises (MSMEs) the world over struggle to access the financing they need to maintain cash flow, hire new employees, purchase new inventory or equipment, and grow their businesses. The IFC estimates that the unmet demand for MSME finance in emerging markets is $2.1-2.6 trillion (around 1/3 of outstanding loan balances to this segment). Unlike larger firms that can access capital markets, MSMEs must seek financing from banks or non-bank finance companies (NBFCs). Yet traditional lending approaches often fail to address this “missing middle” because the cost of diligence and underwriting is too high relative to the potential revenues from the smaller loans that MSMEs need. This situation is worse in emerging markets because of a lack of reliable financial data and high levels of informality. According to the Harvard Business Review, the financial crisis only exacerbated the situation: borrower balance sheets are still recovering, and banks, faced with new regulatory requirements, have reduced the share of lending to MSMEs in 9 out of 13 OECD countries.

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> Posted by Guy Stuart and Eric Noggle, Executive Director and Research Officer, Microfinance Opportunities

pictureLast week’s post discussed how we implemented an embedded education program with VisionFund and Zoona in Zambia that leveraged touch points in an effort to improve clients’ financial capabilities. While we hope this blog series has begun to convince you that embedded education can help solve the financial capability gap, one important issue remains: where is the evidence of success? Does this approach really improve outcomes for clients and businesses?

Microfinance Opportunities (MFO) aimed to add to the knowledge base of “what works” in financial education with our evaluation of the Consumer Education for Branchless Banking (CEBB) project in Zambia. The evaluation applied a mixed-methods approach with multiple data sets. We analyzed information from in-depth interviews, focus groups, knowledge surveys, and transaction data from VisionFund and Zoona’s management information systems.

The data tell a compelling story. Qualitative interviews indicated that both clients and branch staff thought the education program was having a positive impact on how clients were interacting with the branchless banking service and on their overall financial capabilities.

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> Posted by Guy Stuart and Julie Lee, Executive Director and Senior Technical Advisor for Financial Education, Microfinance Opportunities

Last week we highlighted historic challenges to scaling financial education (FE) and offered the embedded education model as one viable solution. The embedded approach has the potential to benefit traditionally under- and unbanked populations and financial service providers (FSPs) alike. Of course, embedded education is about more than simply incorporating educational resources within providers’ existing delivery channels. In large part, the success of embedded education hinges on putting clients at the center of its design and implementation and understanding how financial capability is developed.

The first post in this series raised the importance of adult learning principles (relevance, dialogue, immediacy, and respect, to name a few) for the effective design of educational materials. These principles ensure that materials will reshape consumers’ attitudes and build their knowledge, skills, and self-confidence to act on their financial decisions. The approach is holistic and engaging, providing consumers with the opportunity to dialogue with others as they learn and to wrestle with their questions. The approach also provides the opportunity to apply new knowledge and skills, leveraging moments when consumers are positioned to act on what they are learning – for example, while transacting with the FSP. Finally, the approach ensures that the educational messages are reinforced, so that financial education is not a one-off event and clients are frequently exposed to key messages.

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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.