China Archives - Responsible Finance Forum

Toward Universal Financial Inclusion in China: Models, Challenges, and Global Lessons

18 Apr 2018

Learning from China’s financial inclusion experience over the past 15 years.

This report examines in detail China’s approach to financial inclusion over the past 15 years. It benchmarks China’s progress against peer economies and analyzes key developments and factors in China’s financial inclusion experience.

The report also outlines remaining challenges to achieving further advances in financial inclusion in China, and distills key lessons for policymakers in other countries to develop and refine their own pathways toward sustainable and long-term financial inclusion.

This was originally posted on the Microfinance Gateway.

Digital Financial Services: Challenges and Opportunities for Emerging Market Banks

25 Sep 2017

The digital transformation that has upended industries from retail and media to transport and business-to-business commerce is now sweeping the financial services industry, through the wide dissemination of digital financial services. This was inevitable, as ubiquitous computing power, pervasive connectivity, mass data storage, and advanced analytical tools can easily and efficiently be applied to financial services. After all, money was already extensively (though not exclusively) created, used, stored, processed, and delivered electronically.

Immediacy and personalization have become the norm for consumer goods and services. Consumers have rapidly become accustomed to making purchases with a touch of their finger wherever they may be, receiving tailored recommendations, choosing customized products, and enjoying delivery of almost any item directly to their front door. Businesses failing to adapt quickly to these technological developments can fail dramatically, and many have already done so, including Tower Records, Borders Books, Blockbuster Video, and countless travel agents and brick-and-mortar retailers. Consumers’ new
expectations apply to digital financial services as well.

Technology has transformed business-to-business and within business interactions, too, enabling reconfiguration of design, production, marketing, delivery, and service functions through distributed supply chains, freelance design, outsourced manufacturing, and contract warehousing and delivery. These reconfigurations are mediated by online marketplaces and distributors, and assisted by back-end support operations and data analysis that together drive better risk assessment, faster fulfillment and more efficient customer service.

The same types of disruptive market innovations and reconstituted value chains are now emerging in the form of digital financial services. This poses distinct challenges for incumbent providers such as banks, finance companies, microfinance institutions, and insurance companies, as financial technology—or FinTech—innovators enter their markets. Incumbents, too, can benefit from these developments, which will enable them to broaden financial access, introduce new products and services, and serve customers more efficiently by deploying new technologies internally or in partnership with external innovators.

Serving China’s Frontier Regions through Sustainable, Prudent Financial Inclusion

28 Oct 2015

Small Beginnings for Great Opportunities

18 Mar 2015

Lessons Learned from 20 Years of Microfinance Projects in IFC

IFC is the World Bank Group’s main investor in microfinance, working with around 300 microfinance institutions (MFIs) and SME-focused financial institutions, which provide financial services in 91 countries. IFC is also one of the leading global investors in terms of volume. In fiscal year 2014, we committed $519 million in 43 projects with MFIs. Our cumulative investment portfolio in microfinance exceeded $3.5 billion, with outstanding commitments of $2.0 billion. In fiscal year 2014, IFC advisory services comprised $74.2 million, representing advisory assistance for 86 projects. We have taken an active role in advising microfinance institutions and building or strengthening comprehensive and robust credit reporting systems such as credit bureaus, which are critical to avoiding over-indebtedness and supporting responsible lending practices. In addition, IFC’s work has been critical in post conflict countries: we have engaged in 32 IDA and 10 post-conflict countries, including Bosnia and Afghanistan, and with a particular emphasis on Sub- Saharan Africa, where we supported the creation of greenfield microfinance institutions in 33 countries. This SmartBook, titled From Small Beginnings to Great Opportunities, presents practical lessons learned from the work that we have been doing on microfinance projects over the last twenty years. From launching the Microfinance Enhancement Facility to help the industry stay afloat during the time of crisis, to working on a project to support microfinance clients to fulfill their housing dreams, these narratives are both engaging and insightful and we hope you will learn from them. We would also like to acknowledge the efforts made by IFC staff in not only working on microfinance, but also documenting some of these lessons for others to learn.

Serving China’s Frontier Regions through Sustainable, Prudent Financial Inclusion
Responsible finance—the pragmatic way forward in the global microfinance community today—is helping IFC have an impact on its clients’ operations and bottom lines, as well as influence on the markets where they operate. Responsible finance brings the focus back to clients and encourages financial institutions to build client-centric operating practices that support prudent and sustainable financial growth over the long term. This Smart Lesson uses recent projects in China to show how responsible finance is breaking new ground for IFC in microfinance, enhancing IFC’s relationships with its existing partners, and providing demonstration results to share with potential new partners, within the microfinance sector and beyond.