The Project will help mainstream financial institutions overcome barriers to reaching unserved and underserved populations with quality financial services. The Center for Financial Inclusion at Accion (CFI), the Institute of International Finance (IIF) and MetLife Foundation, together with the International Finance Corporation (IFC) as a technical partner, announced today a two-year initiative to help advance the financial services industry’s ability to reach unserved and underserved populations. The project, titled Mainstreaming Financial Inclusion: Best Practices, will facilitate learning and action on how financial institutions can respond to the specific challenges of reaching lower income market segments. Through research, knowledge exchange, best practices, real world examples and expert insights, the project will identify and transmit practical guidance that financial institutions can use to expand quality services to the poor.
Building on findings from CFI and IIF’s previous joint study, “The Business of Financial Inclusion: Insights from Banks in Emerging Markets,” the project will explore six topics that financial institutions identified as key challenges when serving customers at the base of the economic pyramid:
1) Partnering with fintech startups,
2) Building financial capability of low income populations,
3) Extending insurance coverage,
4) Improving agent banking models,
5) Opening bank accounts remotely, and
6) Utilizing data analytics.
Financial technologies and digital financial services are revolutionizing the way customers access and use financial services, opening the way for banks, insurance companies, payment providers and other financial institutions to serve millions of underserved customers. Yet globally, there are still 2 billion people who are completely “unbanked,” and even more who have an account, but use it only rarely or not at all. Financial institutions face hurdles achieving the long-term business viability and sustainability needed to expand and deepen their reach with this customer segment.
IFC will play a technical advisory role in collaboration with CFI and IIF. “This partnership will contribute to achieving the World Bank Group’s Universal Financial Access goals, and leverage IFC’s experience in investment and private sector development,” said Martin Holtmann, Manager of IFC’s Microfinance and Digital Financial Services.
IIF, the global association of the financial industry, will provide expertise, co-host events, and engage its membership—500 financial institutions from 70 countries—which constitutes the primary audience for this project. “Inclusion of the under and unbanked populations into the financial ecosystem has become an important piece of banks’ strategic plans. Many firms are harnessing new technologies and leveraging partners to create sustainable programs to reach these populations,” said Tim Adams, President and CEO of the IIF. “With more progress to be made, we look forward to working with the Center for Financial Inclusion at Accion on building best practices and developing practical solutions to the challenges firms face in bringing the financial system to the underserved.”
As an industry thought-leader, CFI lends its experience helping financial institutions serve low-income customers and its connection to fintech companies in emerging markets. “The partnership between CFI and IIF provides a unique opportunity to engage some of the most important financial institutions operating in developing countries in practical learning, and through this process, it will help accelerate and deepen financial inclusion,” said Elisabeth Rhyne, Managing Director, CFI. “Our approach is to build communities of knowledge and commitment and to hold the industry responsible for progress. Our intent with this project is to provide financial institutions with practical knowledge to overcome their business challenges and successfully serve the base of the pyramid, providing the poor with better products, service, reliability, and quality.”
In keeping with their commitment to financial inclusion, MetLife Foundation has provided nearly $400,000 over two years to support this project. “MetLife Foundation is pleased to support efforts that improve the availability of high-quality financial services for low-income people around the world,” said Dennis White, president & CEO, MetLife Foundation. “Mainstream financial institutions have many tools and services that help people manage their daily financial lives, grow their businesses and assets and save for the future. We look forward to seeing additional solutions that can help low-income people improve their financial health in the same way.” MetLife Foundation has made a $200 million dollar, five year commitment to improve financial inclusion worldwide.