Between April 28- May 3, 2019, a World Bank Group (WBG) mission consisting of Ahmed Faragallah, Senior Financial Sector Specialist (GFCFI) and Ghada Ismail, Financial Sector Specialist (GFCMW) visited Abu Dhabi, UAE to: (i) deliver with the Arab Monetary Fund (AMF) a joint a capacity building workshop to the Central Bank of Yemen (CBY); (ii) discuss with CBY representatives’ potential areas of technical assistance to transform payment system development recommendations listed in the IMF CBY needs Diagnostic into technical assistance tasks to address the gaps in payments systems; and (iii) strengthen and steer coordination with AMF through exploring with the AMF representatives’ potential areas of joint support to implement the TA agenda for CBY Yemen.
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This paper studies the effect of rolling out mobile money agents in rural Northern Uganda. In a randomized experiment, 168 areas were randomly selected to receive an agent in 2017, with another 163 areas serving as a control group.
... See More + Administrative data on mobile money transactions suggest that the agent rollout increased the probability of sending and receiving peer-to-peer transfers. Data from a 2018 survey of more than 4,500 households show that the agent rollout led to cost-savings for remittance transactions. It also doubled the nonfarm self-employment rate, from 3.4 to 6.4 percent, and reduced the fraction of households with very low food security from 62.9 to 47.2 percent, in areas far from a bank branch. The analysis finds no effect on savings, agricultural outcomes, or poverty. Overall, the findings add new evidence that mobile money can improve livelihoods even in poor and remote settings.
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Policy Research Working Paper WPS8913 JUN 25, 2019
South Sudan’s recent conflict and ongoing insecurity have eroded the country’s development potential, increased vulnerability, and exacerbated the need for humanitarian assistance.
... See More + While a revitalized peace agreement was signed in September 2018, the long-term prospects for a peaceful resolution to the ongoing conflict are tenuous. In this setting, cash assistance could provide a flexible and cost-efficient means of providing effective and dignified assistance to poor and vulnerable households. However, scale up of cash assistance comes with a host of operational risks in fragility, conflict and violence (FCV) affected contexts. Mobile money could offer a promising means of mitigating risks of cash assistance and improving the delivery of cash assistance in South Sudan, while increasing financial inclusion. This report presents findings from the supply-side and demand-side research undertaken. The purpose of this report is to provide a snapshot of the current mobile money ecosystem in South Sudan, and to shed light on the demand for mobile money, as well as on the benefits, barriers, and risks associated with future adoption. It therefore focuses on the potential of using mobile money as a transfer mechanism for cash assistance in South Sudan’s current political, economic, and regulatory environment.
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The IMF and the World Bank Group launched at the 2018 Annual Meetings the Bali Fintech Agenda (BFA), a framework of high-level issues that countries should consider in their own domestic fintech policy discussions.
... See More + The BFA is organized around a set of twelve elements aimed at helping member countries to harness the benefits and opportunities of rapid advances in financial technology that are transforming the provision of financial services, while, at the same time, managing its risks. This paper is a follow up to the BFA and takes stock of country fintech experiences and identifies key emerging trends and policy issues confronting member countries and the international community, in light of the rapid transformation brought about by fintech and the rising engagements of the IMF and the World Bank regarding fintech-related issues and within their respective mandates.
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Financial inclusion can help promote development. Inclusive financial systems allow people to invest in their education and health, save for retirement, capitalize on business opportunities, and confront shocks.
... See More + In the Europe and Central Asia region, there is great variation in financial inclusion. In the euro area, most adults already own an account. Account ownership -- which is the first step of entry into the formal financial system has increased in the developing countries in the region, to 65 percent of the adult population from 45 percent in 2011. Tajikistan, Armenia, Moldova, the Kyrgyz Republic, and Georgia are among the countries that have seen the greatest increases globally, despite starting from a very low base. These experiences underline the potential role of digital payments in driving financial inclusion. Nevertheless, almost 30 percent of unbanked adults report lack of trust in banks as a barrier, which is nearly double the developing country average. And in some countries, gender and income gaps in account ownership remain significant. For example, the gender gap is close to 30 percentage points in Turkey, which is three times the average gap in developing countries. And in Romania, the gap between richest 60 percent of the population and poorest 40 percent is 33 percentage points, which is more than twice the average gap in developing countries. But there are many opportunities to increase account ownership. Over 80 percent of the unbanked have a mobile phone, and simply moving public sector pension payments into accounts would reduce the number of unbanked adults in the region by up to 20 million, including 8 million in the Russian Federation alone. Given the heterogeneity of experiences, there are ample opportunities for countries in the region to learn from each other, which lays out a rich research and operational agenda going forward.
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Policy Research Working Paper WPS8830 APR 24, 2019
The development objective of Financial Inclusion Support Project in Burkina Faso is to increase access to digital financial services and facilitate access to credit for targeted beneficiaries.
... See More + This project has four components. 1) The first component, Increasing usage of transaction accounts, aims to increase the usage of transaction accounts. It has the following two subcomponents: (i) Digitization of government payments; and (ii) Digital transformation of Microfinance Institutions (MFIs). 2) The second component, Strengthening institutional capacity for enhanced financial inclusion, aims to strengthen the institutional capacity of both the national supervisory authority and institutions in the microfinance sector, as well as strengthen the Women Entrepreneurial Activities Support Fund's (FAARF) capacity to facilitate the graduation of their beneficiaries to the formal financial sector and enhance consumer protection in the financial sector. It has the following three subcomponents: (i) Strengthen the soundness and sustainability of the microfinance sector; (ii) Enhancing FAARF’s capacity to facilitate client graduation to the formal financial sector; and (iii) Strengthen consumer protection and financial education. 3) The third component, Increasing farmers’ and Small and Medium Enterprises' (SMEs) access to credit, aims to increase farmers’ and SMEs’ access to credit. It has the following two subcomponents: (i) Strengthening credit supply for farmers and SMEs; and (ii) Strengthening SME business development services. 4) The fourth component, Project Management, aims to finance the costs related to project management and monitoring and evaluation (M and E).
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Micro, Small, and Medium-Sized Enterprises are the backbone of vibrant and dynamic economies. But they are sometimes hard for financial institutions to identify because of the methods they use to conduct their transactions.
... See More + As a result, many MSMEs do not get access to financing and financial products that are designed specifically to support businesses. Identifying these MSMEs and addressing their needs can be very advantageous for digital financial service providers. This report discusses predictive data models to help a mobile network operator in Sub-Saharan Africa, identify MSMEs in its market and better understand how to serve them. The MNO has a large market share in the country and tens of millions of transactions pass its digital financial services channel each month. This report examines those transactions to determine how many are made by individual consumers and how many are made by entrepreneurs and business owners who use personal accounts to conduct business. The report postulates that a significant number of MSME owners conduct commercial transactions through their personal accounts and are therefore not being identified as business customers and are not being afforded the benefits of business customers. The research shows that MSMEs can be accurately identified with a high degree of statistical confidence. Moreover, the analytic method can be used to segment those MSMEs into more granular business profiles. The segmentation algorithm is driven by patterns of how MSMEs use mobile money. The emerging segments differ in their business characteristics and their financial needs. Multiple research components generated comprehensive insights into the MSME segment in the study country. Apart from analyzing mobile money usage patterns, the team also conducted a survey with 1,275 MSMEs. The survey data was used to inform the development of an MSME identification model and to study and profile businesses.
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Working Paper 137301 APR 01, 2019
Buri,Sinja; Van Der Westhuizen,Morne; Heitmann,SorenDisclosed
By successfully reaching historically underserved and vulnerable populations such as women, the poor, and people living in rural communities, Digital Financial Services have contributed to unprecedented growth in financial inclusion in Sub-Saharan Africa during the past decade.
... See More + The adoption and usage of DFS -- and the subsequent financial inclusion that has resulted -- has helped reduce poverty and increase prosperity throughout the region. Still, service providers and development practitioners often lack reliable, detailed, and low-cost poverty data that could help them accurately identify additional communities and individuals who would benefit the most from access to financial services. The lack of data hinders the deployment of services throughout the region and complicates efforts to monitor and evaluate the impact that interventions have on poverty. Relying on traditional household surveys for poverty data is time consuming and expensive. What’s more, by the time the data are collected and analyzed, it is often out of date. But there are alternatives for estimating and mapping poverty with the goal of accelerating and expanding financial inclusion and helping DFS providers target the poorest. Machine learning algorithms can, for example, be trained to predict poverty based on imagery captured by satellites and from call detail records, which document mobile phone usage. For this research study, the IFC Mastercard Foundation Partnership for Financial Inclusion collaborated with the Stanford University Sustainability and Artificial Intelligence Lab to advance existing poverty prediction models to generate poverty estimates at neighborhood-level resolution, which is much more refined than macro-level estimates produced by research to date. Satellite Imagery and call detail records (CDR), validated by ground-truth surveys, were used to develop models that can predict poverty in Ghana and Uganda.
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The ongoing Fourth Industrial Revolution is a technological transformation that is changing the way we live, work and communicate. It is altering every aspect of our society and economy, including the financial sector.
... See More + In Sub-Saharan Africa, 44 percent of the population subscribed to mobile services in 2017. By 2025, the number of subscribers is expected to grow to 52 percent, and 87 percent of those subscribers are expected to have mobile broadband access. Results of the 2017 Global Findex survey reveal significant progress in financial inclusion driven by a new generation of financial services accessed through mobile phones and the internet. Still, with 57 percent of its population lacking any form of bank account, Sub-Saharan Africa remains the region with the greatest potential for the adoption of Digital Financial Services (DFS). From 2014 to 2018, IFC and the Mastercard Foundation conducted a longitudinal study with nine partner financial institutions (FIs) in seven Sub-Saharan African countries to understand if Digital Financial Services are a viable strategy for these institutions to expand financial access. More precisely, the study explains the strategic objectives of the institutions and describes how they planned and implemented their DFS rollouts. The study aimed at extracting lessons on implementing internal change management, as well as measuring the impact DFS has on business growth, sustainability, outreach and adoption. The study is unique as it identifies valuable benchmarks on DFS implementation that fit the banking context, which differs from many studies in the existing literature that focus on MNO-led DFS implementations. It serves as a guide for target-setting and strategic engagement of FIs seeking to implement or scale digital channels. The study also differentiates itself by focusing on many institutions over multiple years and countries.
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