Last week, FI2020 Week created a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched FI2020 Progress Report. From November 2-6, 2015, stakeholders around the world participated in more than 30 events and shared their voices over social media, with #FI2020. As part of the week, global financial inclusion leaders offered calls to action. We started to provide highlights, but found that every single contributor had an important perspective to add, so this post includes all of their voices.
If there were any doubts about the potential to achieve global financial inclusion, it would be dispelled by the passion and sense of opportunity in the calls to action that were posted last week as part of FI2020 Week. A visionary tone was set by the inaugural posting by Ajay Banga of MasterCard, who declared that “financial inclusion is both economic and social inclusion and necessary for the future well-being of our planet.” Jean-Claude Masangu Mulongo, former Governor of the Central Bank of the Democratic Republic of the Congo, draws the link between financial inclusion, economic growth, and poverty reduction, while also—appropriately, given his role–noting the link to financial stability. Yves Moury of Fundación Capital heightens the urgency by stating that “poverty is the greatest scandal of our times,” and Martin Burt of Fundación Paraguaya adds that “poverty elimination must be the endgame of all financial inclusion strategies.”
This strong sense of social mission comes out in a call from Dr. William Derban of Fidelity Bank Ghana to “leave no one behind” in the march toward inclusion. Michael Miebach of MasterCard also talks about meeting the needs of all members of society, including women, and Bindu Ananth of IFMR Trust mentions smallholder farmers as another group that is often excluded. In light of breakthroughs in technology, Sonja Kelly of the Center for Financial Inclusion urges us to reach out to those who are traditionally excluded from technology, and not just early adopters. As Larry Reed of the Microcredit Summit Campaign puts it, “We need to approach the challenge with the end in mind, designing a system that can sustainably reach clients in the most remote areas and who transact in the smallest sums.”
For these leaders, the case for financial inclusion is clear—but Tom Sanderson of BBC Media Action, who also chairs the Financial Inclusion Forum in the U.K., believes the case needs to be made more strongly in countries where inclusion is low. He suggests an intensive public service broadcasting campaign to help raise awareness among consumers and build their trust.
But what do we mean by inclusion? Gloria Grandolini of the World Bank Group reminds us that a transaction account must be a gateway to other services – savings, insurance, and credit. It’s clear to all of the contributors that these services will be facilitated by technology. Michael Schlein of Accion encourages “experimentation and innovation in order to harness new digital technologies,” and a number of leaders call for a focus on technological innovations that can make a difference, such as biometrics (Rupert Scofield and Andrée Simon of FINCA); national identification systems (Omokehinde Ojomuyide of MasterCard/Nigera, Shamina Singh of MasterCard’s Center for Inclusive Growth, and Prabhat Labh of MasterCard Foundation); and last mile interfaces of mobile phones and agents. Daniel Monehin and Solana Cozzo of MasterCard focus attention on the risks of cash to customers and the great potential realized by going cash-free, which also resonates with the push to get smart about G2P payments, especially social benefits (Mark Elliott and Shamina Singh of MasterCard).
But Gabriela Zapata cautions that “The gush of now widely adopted technologies must be combined with a deeper understanding of low-income people’s financial lives, needs and desires so that client centricity is woven into financial product design and supply.” Stephen Kehoe of Visa frames this as an issue of delivering value: “If we are going to get to scale and sustainability, we must continue to innovate to deliver value that works for all stakeholders – in convenience, in affordability, in products and in reliability.” Likewise, Bindu Ananth of IFMR Trust calls for a “relentless focus on customers and customer needs” and Solana Cozzo talks about the need to bolster the usability of accounts. Alex Kreger of UX Design Agency says the key is facing the user and focusing on the user experience. Elisabeth Rhyne of the Center for Financial Inclusion makes a similar point about quality and usage, emphasizing that, amid the rush to scale, the financial inclusion sector must re-focus on quality and value for the customer.
But who is the financial inclusion sector? Perhaps the most striking theme in the calls to action was the need for partnerships across the diversity of stakeholders – including commercial banks, insurance agencies, microfinance institutions, mobile network operators/telcos, non-profits (international and local NGOs), multilateral development agencies, regulators, governments, national policy-makers, global bodies, and financial technology (fintech) start-ups, delineated by Paul Breloff of Venture Lab as including “upstart new entrants in mobile payments, alternative credit scoring, digital MSME finance, automated engagement platforms, and financial capability.” (Others calling for a focus on partnerships and collaboration, especially to reach last mile customers, include Ajay Banga, Louise Holden, Carlos Montaño and Daniel Monehin of MasterCard, Tim Adams of the Institute of International Finance, Dr. William Derban of Fidelity Bank Ghana, Nkosilathi Moyo of VisionFund Zambia, Yves Moury of Fundación Capital, Liza Guzmán of Accion/Latin America, Elisabeth Rhyne of the Center for Financial Inclusion, Andrée Simon of FINCA, and Sergio Navajas of the Inter-American Development Bank.)
At the same time, informal or semi-formal services still have their place. Dr. Man B. Bishwakarma of Jana Utthan Community Bank in Nepal calls attention to community-owned microfinance – known as community banking – while Prabhat Labh adds a note about the role informal savings groups can play, and Bunmi Lawson of Accion/Nigeria sees the potential for “microfinance to punch above its weight.”
There was also a call to broaden customers’ networks, with Juan Alberto Almonacid of Accion reminding us of the importance of small-scale workers getting access to markets with quality goods and services, while Jorge Ortega of Visa/Latin America and the Caribbean says that merchants are a forgotten piece of financial inclusion. Jorge’s comment calls attention to the win/win in which merchants benefit from access not only to customers (by serving as agents) but also as customers themselves. He calls us to do more “to bring merchants and entrepreneurs, particularly the small retail points where so many people shop, into the picture.”
What a difference a good government can make! Dr. William Derban of Fidelity Bank Ghana credits smart e-money regulation by the Bank of Ghana as one of the many factors that has led Fidelity’s financial inclusion portfolio to grow from 14,000 to 300,000 accounts in 2 years. Gerald M. Nyakwawa finds that government adoption of financial inclusion objectives in all aspects from education to usage is the key to unlocking inclusion. And Diego Guzmán of Accion/Latin America and Jay Chanda of Accion/Africa agree that government regulation and support must proactively evolve to enable microfinance, technology development, and innovation in channels and mobile money Louise Holden of MasterCard/Europe maps out a vision in which “national governments can enable a sensibly regulated ecosystem, drive initiatives, and invest in electronic disbursement solutions.”
There were some cautionary notes as well. María José Roa García of CEMLA calls on the community to pay more attention to impact, including through more baseline studies, and Liza Guzmán of Accion/Latin America reminds us of our responsibility of balancing financial and social returns, noting that everything we do to contribute to advance financial inclusion will impact a person and a family somewhere. Anne Hastings of the Microfinance CEO Working Group calls for “effective legal and regulatory frameworks that protect all banking clients, especially those most vulnerable and hard to reach.” Her full quote inspired a lovely email in response from Elijah Chol Yak of the South Sudan Microfinance Development Facility that is part of the Government of South Sudan, in which he expressed his commitment to look forward “to see how we can unite our ranks and use this week to sensitize our people about the needs to have a conducive regulatory and policy environment for the advancement of financial inclusion in South Sudan.”
For Matthew Driver of MasterCard, an essential piece of the puzzle is investing in financial literacy, echoed by Gerald M. Nyakwawa, and one example, as IFMR reminded us on Twitter, is assisted transactions. Recognizing the importance of financial infrastructure – not as exciting to discuss, but vital nevertheless — Faisal Malik of KASHF/Pakistan calls out the importance of credit bureaus.
Who will make all of this happen? Valerie Kindt of Accion reminds us that complex technology and partnerships require capable people, with her call to improve organizational management, build operational capacity, and attract talent, and Tim Adams of the Institute of International Finance has a similar grounding in the realities of implementation when, from his perspective as CEO of a global association of the financial industry, he talks about the need to “identify current successes, assess best practices and then apply those experiences to help efforts in other parts of the world.”
We’ll give (almost) the last word to Ling Hai of MasterCard’s Asia Pacific region, who packs a lot into his comprehensive vision of what financial inclusion can do: “We need to ensure that all stakeholders are aware that providing people with the ability to save and borrow efficiently and securely improves well-being and encourages enterprise, ultimately reducing global poverty and increasing economic growth.”
As Sergio Navajas says, “It’s time.”
See a fun fast read of the full calls to action, complete with photos at fi2020week.org.
If you would like to add your own call to action, please email Allyse McGrath at email@example.com. As well, we are compiling the calls to action that emerged from over 30 webinars, on-line conversations and in-person events throughout FI2020 Week, so stay tuned.
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