Mobile Technologies And Digitized Data To Promote Access To Finance For Women In Agriculture

28 Feb 2018

Smallholder farmers, male and female, face a persistent and well-documented finance gap; they are often invisible to or deemed too risky by banks to serve and their financial needs do not align with the terms of most microfinance lending. They lack access to other relevant products and services as well: agricultural insurance is notoriously difficult to provide, savings accounts are often accessible only in distant urban bank branches and extension agents are unable to reach many rural areas to provide needed training and capacity building. Recently, digital financial services (DFS) have greatly expanded access to many of these products, largely through the mobile device channel, and implementers of agricultural development programs and funds are enthused about their potential to create change along whole agricultural value chains. Yet, women have less access to these innovations than men do, which means they are consistently losing out on the potential to grow their incomes and build secure agricultural livelihoods for themselves and their families. Female smallholder farmers are key contributors to agricultural and rural economies and livelihood systems. They hold important roles in all parts of agricultural value chains, from production and management of crops and livestock to harvesting and processing to selling and trading products in markets. Women not only expand the productivity of agricultural value chains, they also pass on more benefits of income related to farming to their households (including children) than men do. Women, in turn, rely heavily on agriculture as a source of employment in most developing countries.

Global Financial Inclusion and Consumer Protection Survey

30 Jan 2018

Financial sector authorities increasingly prioritize financial inclusion and financial consumer protection, alongside existing priorities of stability and integrity. An enabling environment that facilitates competition, promotes innovation and the use of technology, addresses risks in a proportionate manner, and empowers financial consumers to make informed choices is critical to improving financial inclusion and consumer protection. Financial sector authorities have pursued a range of enabling environment reforms but progress has been uneven: in more than 65 economies, the majority of adults remain excluded from the formal financial system (DemirgucKunt et al. 2015).

The objective of the 2017 Global Financial Inclusion and Consumer Protection (FICP) Survey is to provide a timely source of global data to benchmark efforts by financial sector authorities to improve the enabling environment for financial inclusion and consumer protection.

The 2017 Global FICP Survey (“Survey”) questionnaire covers key topics related to financial inclusion and financial consumer protection and aligns with international guidance to financial sector authorities in these areas, including the 2017 World Bank Group (WBG) Good Practices for Financial Consumer Protection, the 2016 G-20 High-Level Principles for Digital Financial Inclusion, the 2016 WBG–CPMI Payment Aspects of Financial Inclusion, and the 2016 Guidance on the Application of the Core Principles for Effective Banking Supervision to the Regulation and Supervision of Institutions Relevant to Financial Inclusion published by the Basel Committee on Banking Supervision at the Bank for International Settlements. The Survey covers regulated retail institutions that provide standard loan, deposit, or payment services.

This report presents main findings from financial sector authorities in 124 jurisdictions, representing 141 economies and more than 90 percent of the world’s unbanked adult population. The main findings include the following.

Inclusive Insurance: Closing the Protection Gap for Emerging Customers

30 Jan 2018

Emerging consumers present a promising market for insurance, and creative insurance companies have been developing promising models to reach this market for years. Since the 1990s, the microinsurance movement has demonstrated the benefits of insurance for low-income people, as well as exploring new business models to serve these customers profitably in frontier and emerging markets. Microinsurance pioneers, as well as social insurance programs, targeted customers in the informal economy who were underserved by mainstream commercial insurance. Microinsurance models matched their premiums and benefits to the needs of these groups. Today, inclusive insurance expands this market and product-development work to all those who have not been served by traditional insurance, including the lower middle class, while retaining a particular emphasis on vulnerable and low-income populations. A number of terms related to inclusive insurance are in circulation. Market leaders such as Allianz and AXA refer to emerging consumers or emerging customers. Others refer to mass insurance or popular insurance, a term often used in Latin America. Mexican mobile payments platform focuses not on the market itself but on changes to the claims process and the claims adjuster in order to serve this market, with the term nonadjustable insurance. The International Labour Organization (ILO) has championed what it terms impact insurance. In this paper, we use the term inclusive insurance to encompass all of the above. We define inclusive insurance as access to and use of appropriate and affordable insurance products for the unserved and underserved, with a particular emphasis on vulnerable and low-income populations. Whatever the language or specific target, it is clear that both traditional and new insurers are breaking open new markets through new business models, technologies, product design, and partnerships, all made possible by enabling regulatory environments. This report is based on written submissions and in-depth interviews with thirty insurers and insurance experts who are making inclusive insurance work as a profitable business model. Their optimism about inclusive insurance stems from both the sheer size of the potential market and the fact that rising incomes equip a large segment of the global population with the incomes needed to benefit from insurance services and afford the relevant premiums. Increasingly, realworld experience backs up the notion that inclusive insurance is commercially viable, as Part 3 of this paper discusses. Yet most of our interviewees maintained a high degree of commitment to social impact, recognizing both the social value of insurance and the special attention needed when working with vulnerable groups.

International Funding for Financial Inclusion

30 Jan 2018

The 2017 edition of CGAP’s annual Cross-Border Funder Survey reports funding commitments from the 23 largest international funders of financial inclusion, representing 80 percent of the full set of over 54 international funders and 73 percent of the global estimated funding commitments for financial inclusion in 2016. Financial inclusion, which is broadly perceived as an enabler of Sustainable Development Goals (SDGs), remains an important focus for funders. Survey results indicate that funding commitments continue to grow steadily, especially in Sub-Saharan Africa (SSA). International funders are increasingly targeting capacity building for financial services providers (FSPs) and financial inclusion policy and regulation, and at this point, every funder supports the development of digital financial services (DFS).

Digital Financial Services in Nigeria: State of the Market Report 2017

21 Dec 2017

The notion supporting digital financial services (DFS), mainly through ubiquitous mobile devices as a magic bullet for enhancing access and utility of financial services is still in its nascent stages. Through research engagements, the various dimensions of Nigeria’s financial inclusion conundrum are the primary focus of the Sustainable and Inclusive Digital Financial Services (SIDFS) Initiative hosted at the Lagos Business School. By generating an evidence base, we aim to provide thought leadership and insights to address the financial inclusion phenomenon across all dimensions of the ecosystem. In 2016, the Initiative published the first DFS State of the Market Report which focused on two pivotal pillars of financial inclusion development and growth – the demand and supply perspectives. By profiling under-banked and unbanked consumers, we identified characteristics of the underserved from the community, through household and individual lenses. The customer segments were profiled using demographic parameters as well as assets (identity, phone ownership/access) and capabilities (language, digital). These profiles are intended to enhance supplier know-how and aid product development capabilities. The in-depth analysis of the supply-side identified three (3) business models for delivering sustainable DFS, namely: focused, specialist or a hybrid. The study went further to describe the portfolio of organisational assets, resources and capabilities to efficiently deliver DFS to under-banked and unbanked consumers. The themes presented in this edition expand the discussion beyond the core ecosystem and provides insights into the institutional frameworks necessary for financial inclusion.

The report addresses the third ecosystem pillar – the institutional/regulatory component, with specific focus on the legislation, policies and regulations. The policy analysis unearthed critical policy constraints and guided by the doctrinal interpretations of existing laws, market-enabling policy solutions evolved. Our presentation focuses on material financial inclusion issues, the guiding laws and solution proposals. This report does not contain legislative bills but forms a premise for the drafting of new laws, policies and regulations. Finally, these market-enabling policies or solutions for creating an ecosystem for delivering DFS to the unbanked require the cooperation and collaboration of public institutions, the private sector and civil society. Financial inclusion for all is a reality when it is a national priority.

Agent Network Accelerator Research: Nigeria Country Report

21 Dec 2017

With the financial support of the Bill & Melinda Gates Foundation, the United Nations Capital Development Fund (UNCDF) and other regional stakeholders, MicroSave is conducting a four-year research project in eleven focus countries as part of the Agent Network Accelerator (ANA) Project.

The Helix Institute of Digital Finance, which manages the ANA project, provides financial sector stakeholders with capacity building trainings to develop sustainable digital finance programmes and operations, through market analytics, operational training and advisory services. This report focuses on the findings from the second wave of ANA research conducted in Nigeria in 2016. The first wave of the study was previously completed in 2014.

Global Partnership for Financial Inclusion Forum

28 Nov 2017

The Global Partnership for Inclusion (GPFI) Forum has become an annual cornerstone of the GPFI’s activities. At the Forum, the GPFI presents its work to a broader audience, going beyond its members. Usually taking place back-to-back to the GPFI’s plenary meeting, the forum offers a unique opportunity for reaching out and networking. In 2017, the GPFI Forum was hosted on 2-3 May in Berlin by the German G20 Presidency, paving the way to the G20 summit on 7-8 July 2017 in Hamburg, Germany.
The meeting provided a space for exchange and dialogue and attracted around 270 participants from more than 60 countries. In 12 sessions, experts from many different backgrounds reflected on the GPFI’s current priorities. Important stakeholders from G20 and non-G20 countries, from the private sector, from financial service providers and Fintechs, from government agencies and central banks, regulators and development experts gave important inputs that already have affected and will continue to influence GPFI’s scope of work.
The GPFI was created by G20 leaders at the Seoul Summit in 2010. The Partnership is committed to advancing financial inclusion globally by increasing access to and usage of sustainable formal financial services, thereby expanding opportunities to underserved and excluded households and enterprises. Despite a 20 percent increase 2011-2014 in the number of adults with access to formal financial services worldwide, there are still two billion people – more than half of the adult population – and 300 million businesses that are excluded from the formal financial system.
In 2017, the GPFI reviewed and updated its strategy. The 2017 G20 Financial Inclusion Action Plan (FIAP) aligns the work of the GPFI with the 2030 Agenda and the Addis Ababa Action Agenda and addresses the opportunities and challenges for financial inclusion through advances in digitization. These two central themes guided us through the two-day GPFI Forum. Financial Inclusion is a prerequisite for achieving many of the Sustainable Development Goals (SDGs) outlined in the 2030 Agenda. It is about “leaving no one behind”, it contributes to eradication of poverty and inequality, to gender equality and many other SDGs. The new FIAP puts a special emphasis on vulnerable and underserved groups, a focus we reflected on in the sessions dedicated to financial inclusion of youth, people in rural areas, and forcibly displaced persons – gender being a crosscutting theme in several of the discussions. We further wanted to show how financial inclusion contributes to the G20 Partnership with Africa. We were overwhelmed and humbled by the huge interest and great response and by the positive feedback we received from many participants at the forum. Our intention with this brochure is to summarize the main takeaways from the official panel sessions so that subsequent presidencies can refer to and build on the event.

Cashless Cities: Realizing the Benefits of Digital Payments

31 Oct 2017

Cities account for a large proportion of the global population and its economic activity. Today, over half of the world population lives in cities. By 2050, this number will increase to two-thirds. Currently, over 80% of global economic activity takes place in cities and it is expected that the vast majority of future economic growth will come from cities, largely spurred by digital payments.

This study is unique in that for the first time it looks at the net benefits associated with adopting digital payments and does so at the city-level. The assessment is carried out for 100 cities across 80 countries, segmented by stage of digital maturity, with these cities modelled to an “achievable cashless scenario”. This scenario is defined as the entire population moving to digital payment usage equal to the top 10% of the users in that city today. The findings provide compelling support for greater adoption of digital payments.

This study estimates that increasing digital payments across the 100 cities could result in total direct net benefits of US$470 billion per year. On average, these net benefits represent slightly over 3% of a city’s current GDP. Greater economic activity spurred by digital payments also supports higher employment as well as improvements in wages and workers’ productivity. This study also finds that on average, across the 100 cities, increased usage of digital payments could add 19 basis points to a city’s GDP and support over 45,000 additional jobs per year per city, while worker productivity and wages could increase by 14 and 16 basis points per year per city, respectively. To put the GDP growth number in perspective, the 19 basis points increase in economic growth per year across the 100 cities translates to nearly $12 trillion of total additional economic activity over the next 15 years – an amount exceeding China’s 2016 GDP.

2017 UNSGSA Report: Financial Inclusion Transforming Lives

31 Oct 2017

Financial inclusion is now firmly established as a powerful tool to improve lives and strengthen development. Each year, the Secretary-General’s Special Advocate for Inclusive Finance—Queen Máxima of the Netherlands—publishes a report that looks at what financial inclusion has achieved and where it is going.

The report discusses the contribution SMEs have on the economy – half of total employment and a third of the GDP. However, their opportunity for growth is severely limited due to inequities in credit and financing. Suggestions include having a national strategy for inclusive finance and building stronger credit reporting and reforms.

This year’s report lays out three priorities for action that could accelerate our momentum: ensuring development impact, promoting supportive policies for digital financial inclusion, and reaching neglected populations such as farmers, women, and small business people.