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, EdaSpanish,
EnglishDisclosed
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, EdaSpanish,
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, EdaFrench,
EnglishDisclosed
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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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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The expansion of digital finance systems in the developing world has altered this financial context and enabled new business models that rely on small, regular payments.
... See More + In the off-grid energy sector a group of solar companies, primarily in East Africa and South Asia, are leveraging digital finance to offer pay-as-you-go (PAYG) energy. This brief explains how digital finance is enabling PAYG energy expansion, which in turn provides a gateway to a range of financial products for the financially excluded.
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Brief 106034 MAR 01, 2016
Waldron,Daniel Peter; Faz De Los Santos,Pedro XavierDisclosed
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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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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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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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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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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This actual case highlights the importance of an efficient customer recourse system. Recourse systems can help consumers overcome the challenges related to product adoption and continued use by helping resolve initial problems or challenges quickly, which can build trust in providers and their products, and increase uptake and customer retention.
... See More + Effective recourse, and the key principles of awareness, access, timeliness, and fairness associated with effective recourse systems, becomes all the more relevant in the case of digital financial services (DFS), which still face trust deficits among some consumers.
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The 2015 cross-border funder survey reports commitments from the largest international funders of financial inclusion, as of 31 December 2014. Consultative group to assist the poor (CGAP) has conducted the survey annually since 2008 and in partnership with MIX since 2012.
... See More + Funding for financial inclusion was stable in 2014, although the weaker euro caused a slight decrease in dollar terms. To a greater degree than in previous surveys, funders this year emphasized that due to other global priorities it was difficult to promote financial inclusion internally. Nevertheless, their commitments generally followed the same patterns as in years past, with the majority of funding directed at retail-level financial service providers (FSPs) through debt, which accounts for half of all commitments. There was an increasing interest in digital financial services and a rapid and sustained growth in funding to the Middle East and North Africa (MENA). Going forward, funders report that they will increase their funding to sub-Saharan Africa (SSA) and continue to focus on supporting FSPs, as well as payment systems and consumer protection programs.
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Brief 103209 DEC 01, 2015
Soursourian,Matthew Jacob Klein; Dashi, Edlira; Dokle, EdaDisclosed
The term shadow banking came into widespread usage with the onset of the global financial crisis to refer to a broad array of entities and activities operating outside the regular banking system that were being used to perform bank-like functions.
... See More + With progress on financial inclusion - and ongoing innovation, sometimes reaching vast scale quickly - it is worth remembering that the very concept of shadow banking emanated from fast-changing market practices and a corresponding failure of financial regulation and supervision to keep pace. This brief explains why approaches to inclusive finance that are currently widespread do not share the potentially destabilizing attributes of other types of shadow banking, concluding by identifying some risks worth monitoring as the picture continues to evolve.
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The term shadow banking came into widespread usage with the onset of the global financial crisis to refer to a broad array of entities and activities operating outside the regular banking system that were being used to perform bank-like functions.
... See More + With progress on financial inclusion - and ongoing innovation, sometimes reaching vast scale quickly - it is worth remembering that the very concept of shadow banking emanated from fast-changing market practices and a corresponding failure of financial regulation and supervision to keep pace. This brief explains why approaches to inclusive finance that are currently widespread do not share the potentially destabilizing attributes of other types of shadow banking, concluding by identifying some risks worth monitoring as the picture continues to evolve.
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