Identifying use cases for emerging technologies to reach financially excluded smallholders means looking beyond the hype to develop a clear understanding of these technologies’ unique features, costs, and benefits.
... See More + And because few innovations have generated as much hype as distributed ledger technologies (DLT), more commonly referred to as blockchain, Consultative Group to Assist the Poor (CGAP) set out to understand how this emerging technology could enable broader and more inclusive markets for agricultural finance. This Brief summarizes CGAP’s approach and offers insights into the applicability of DLT to agricultural finance in a developing country context. Importantly, this Brief does not attempt to provide comprehensive background on the technology itself while additional resources are provided for readers who would like a deeper understanding of this evolving space.
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Financial inclusion of smallholder families is considered one of several key conditions needed tospark sustainable agricultural development and food security.
... See More + However, an analysis of national smallholder surveys in Tanzania and Mozambique with a gender lens reveals female smallholdersremain financially excluded relative to men, despite women’s significant demand for financial services. This gender gap in financial inclusion is greatest in the wealthier smallholder households and suggests that even when wealth conditions improve only the male members overcome financial inclusion constraints. This highlights the importance of making sure that more adequate choices of formal financial products are available for female smallholders.
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Chinese information technology conglomerates Alibaba and Tencent own or operate dozens of competing online businesses, and yet, their affiliate mobile wallets stand out for how they have fundamentally influenced everyday living in China’s cities.
... See More + Alibaba through its dominance in e-commerce and Tencent through its mobile social media and messaging platforms (WeChat and QQ) connect mass-market audiences with their respective wallet products of Alipay and WeChat Pay. Although these services are the product of unique market conditions, they offer many learning opportunities. Perhaps most extraordinary has been the companies’ ability to build trust with users. Tencent and Ant Financial, Alibaba’s financial affiliate, are redefining the relationship users have with finance. Finance is becoming simpler, and it is also remarkably more social in nature. This holds great promise for advancing rural financial inclusion in China. However, challenges in serving last-mile clients remain.
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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 2016.1 Financial inclusion, which is broadly perceived as an enabler of Sustainable Development Goals (SDGs), remains an important focus for funders.
... See More + 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).
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Chinese information technology conglomerates Alibaba and Tencent own or operate dozens of competing online businesses, and yet, their affiliate mobile wallets stand out for how they have fundamentally influenced everyday living in China’s cities.
... See More + Alibaba through its dominance in e-commerce and Tencent through its mobile social media and messaging platforms (WeChat and QQ) connect mass-market audiences with their respective wallet products of Alipay and WeChat Pay. Although these services are the product of unique market conditions, they offer many learning opportunities. Perhaps most extraordinary has been the companies’ ability to build trust with users. Tencent and Ant Financial, Alibaba’s financial affiliate, are redefining the relationship users have with finance. Finance is becoming simpler, and it is also remarkably more social in nature. This holds great promise for advancing rural financial inclusion in China. However, challenges in serving last-mile clients remain.
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Chinese information technology conglomerates Alibaba and Tencent own or operate dozens of competing online businesses, and yet, their affiliate mobile wallets stand out for how they have fundamentally influenced everyday living in China’s cities.
... See More + Alibaba through its dominance in e-commerce and Tencent through its mobile social media and messaging platforms (WeChat and QQ) connect mass-market audiences with their respective wallet products of Alipay and WeChat Pay. Although these services are the product of unique market conditions, they offer many learning opportunities. Perhaps most extraordinary has been the companies’ ability to build trust with users. Tencent and Ant Financial, Alibaba’s financial affiliate, are redefining the relationship users have with finance. Finance is becoming simpler, and it is also remarkably more social in nature. This holds great promise for advancing rural financial inclusion in China. However, challenges in serving last-mile clients remain.
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Chinese information technology conglomerates Alibaba and Tencent own or operate dozens of competing online businesses, and yet, their affiliate mobile wallets stand out for how they have fundamentally influenced everyday living in China’s cities.
... See More + Alibaba through its dominance in e-commerce and Tencent through its mobile social media and messaging platforms (WeChat and QQ) connect mass-market audiences with their respective wallet products of Alipay and WeChat Pay. Although these services are the product of unique market conditions, they offer many learning opportunities. Perhaps most extraordinary has been the companies’ ability to build trust with users. Tencent and Ant Financial, Alibaba’s financial affiliate, are redefining the relationship users have with finance. Finance is becoming simpler, and it is also remarkably more social in nature. This holds great promise for advancing rural financial inclusion in China. However, challenges in serving last-mile clients remain.
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As the range and scope of data-related initiatives expand, funders in financial inclusion increasingly need a clear strategy and framework for reviewing the merits of the project proposals they receive.
... See More + Not only do they need to decide which has the potential to fill market gaps in a sustainable way, they also need to evaluate how their investments in data ultimately can benefit underserved populations.
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When crowdfunding emerged in the United Kingdom around 2007, few can imagine that 10 years later China will be the largest crowdfunding market in the world.
... See More + Peer-to-peer (P2P) lending in China started picking up in 2011 to reach a market volume of United States (U.S.) 52.44 billion dollars in 2015. It surpassed the U.S. 100 billion dollars threshold a year later, thus leaving North America far behind as the second largest global market with a modest U.S. 36.16 billion dollars in crowdfunded loans. Led by well-known platforms, such as CreditEase, Renrendai, ppdai.com, Yooli.com, and others, China’s P2P industry continues to grow.
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When crowdfunding emerged in the United Kingdom around 2007, few can imagine that 10 years later China will be the largest crowdfunding market in the world.
... See More + Peer-to-peer (P2P) lending in China started picking up in 2011 to reach a market volume of United States (U.S.) 52.44 billion dollars in 2015. It surpassed the U.S. 100 billion dollars threshold a year later, thus leaving North America far behind as the second largest global market with a modest U.S. 36.16 billion dollars in crowdfunded loans. Led by well-known platforms, such as CreditEase, Renrendai, ppdai.com, Yooli.com, and others, China’s P2P industry continues to grow.
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The rapid growth of mobile financial services (MFS) is arguably the single most significant contributor to increased financial inclusion in emerging markets today.
... See More + It has facilitated access to cheap and reliable financial services to an ever increasing formerly unbanked population segment. Innovative mobile money services like M-Pesa in Kenya and Tanzania have grown into major payments services that move billions of dollars annually. Unfortunately, MFS have also rapidly become a conduit for fraud and other criminal activity.
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Customer centricity is, at its core, about understanding and meeting the needs of customers. From a business perspective, this means that generating greater value for customers is good for business because it increases product use, satisfaction, and loyalty while reducing costs.
... See More + Research from a developed market context has found that a 2 percent increase in customer retention leads to a 10 percent decrease in cost. Other research has shown that a 1 percent increase in customer satisfaction leads to a 2.37 percent increase in return on investment (ROI), while a 1 percent decrease in satisfaction leads to a 5.08 percent decrease in ROI.
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This brief highlights findings from CGAP’s annual cross-border funder survey. The 2016 survey reports funding commitments from the largest international funders of financial inclusion, as of 31 December 2015.
... See More + CGAP has conducted the survey since 2008, and in partnership with MIX since 2012. The data from this year’s report come from 54 funders who report to the survey biannually.
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Brief 119213 DEC 01, 2016
Soursourian,Matthew Jacob Klein; Dashi,Edlira; Dokle, EdaEnglish,
FrenchDisclosed
This brief highlights findings from CGAP’s annual cross-border funder survey. The 2016 survey reports funding commitments from the largest international funders of financial inclusion, as of 31 December 2015.
... See More + CGAP has conducted the survey since 2008, and in partnership with MIX since 2012. The data from this year’s report come from 54 funders who report to the survey biannually.
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Brief 119213 DEC 01, 2016
Soursourian,Matthew Jacob Klein; Dashi,Edlira; Dokle, EdaEnglish,
SpanishDisclosed
This brief highlights findings from CGAP’s annual cross-border funder survey. The 2016 survey reports funding commitments from the largest international funders of financial inclusion, as of 31 December 2015.
... See More + CGAP has conducted the survey since 2008, and in partnership with MIX since 2012. The data from this year’s report come from 54 funders who report to the survey biannually.
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Brief 119213 DEC 01, 2016
Soursourian,Matthew Jacob Klein; Dashi,Edlira; Dokle, EdaFrench,
SpanishDisclosed
Many financial service providers struggle with high levels of account dormancy and customer dropouts, limited service usage, and loss of their best clients to other providers.
... See More + Negative customer experiences that erode customer trust are at the root of many of these challenges. Many of these negative experiences are the result of poorly designed products that do not respond to clients’ needs, are difficult for customers to activate and use, do not deliver on promised features, or are costly relative to their benefits.
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Policy makers worldwide are increasingly appreciating the expanding role that digital financial services play in reaching financially excluded and underserved customers.
... See More + Though models vary widely, all have at their heart a low-cost digital financial product such as e-money issued by a mobile network operator (MNO) or financial institution that permits customers to make payments, to transfer money, and to store value in small amounts. This value-storage functionality enables the offering of additional services such as digital credit and off-grid electricity on a pay as one go basis - services better tailored to the unpredictable cash flow of poor households and microenterprises.
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The evidence on demand for sharia-compliant financial services is mixed. On the one hand, IFC-funded studies showed relatively high demand, while results from Findex showed that financial exclusion due to religious reasons was minimal (Demirguc-Kunt, Klapper, and Randall 2013).
... See More + One of the reasons behind these contradictory messages could be the survey instruments themselves: perhaps the issue is not so much what people want but how they were asked. For example, if you ask participants why they do not use borrowing or savings products, their responses may include ‘they are too expensive’ or ‘they are too far away’ even if the real reason is something more nuanced, such as intra-household bargaining issues. Similarly, if you ask Muslims if they prefer an interest-bearing loan or a noninterest-bearing loan, it might not be surprising that they would choose the noninterest-bearing loan, perhaps because they want to demonstrate piety, or maybe because they assume it means a no-cost loan.
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Digital Social Payments (DSPs) offer a variety of potential benefits over traditional cash, voucher, or in-kind methods. Proponents most often cite increased efficiency, reduced leakage, and faster, more convenient and more secure payments to recipients.
... See More + When linked to bank accounts or mobile wallets that offer store-of-value opportunities or access to additional financial services, DSPs to the bottom of the pyramid could pave a way to fuller financial inclusion. However, evidence shows that the financial inclusion benefits of DSPs have thus far been limited: most recipients withdraw 100 percent of their payment at once and by and large do not use the account again until the next transfer takes place, let alone take advantage of additional financial services that may be available to them. This lackluster use has led some to question the promise of DSPs as a financial inclusion gateway.
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This brief provides an introduction to the fast-evolving landscape of digital credit and illustrates common features of this new digital finance offering.
... See More + The focus is on digital credit services that leverage customers’ existing access to a mobile phone, though there are also digital credit models building on a person’s connection to the internet. This brief uses 10 case examples to describe the digital credit trend, recognizing that there are many more pilots and products under design than are covered. Many of the case examples are new and have not reached scale yet, while a few already have portfolios reaching 800,000 to 1.8 million active borrowers.
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