A PACT to Promote Resilience

This report uses a framework to understand how fintechs and their customers cope, survive, and thrive after the COVID-19 pandemic.

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AUTHORS

Jayshree Venkatesan, Evelyn Stark

Topics

Two years into the COVID-19 pandemic, the role of digital financial services in providing access to essential services is undeniable. Digital financial services have enabled governments and nonprofits to deliver timely social protection payments and aided families and friends of those in need to quickly share financial resources. The rise of platforms and small business fintechs allowed for new forms of commerce that have kept people employed and grown gig work opportunities, which helped customers in small villages and large cities alike to purchase goods needed for their households.

We need data, metrics, and measurement standards to better understand and move the needle on measuring resilience.

The role fintechs have played over the last two years is clear. We have data about the growth of fintechs during the pandemic, on how much capital they have attracted from investors, and many anecdotal stories about how individuals and firms using fintechs have experienced direct benefits from moving to digital solutions. But while there are many stories of the positive relationships between fintechs and their customers during the pandemic, we need data, metrics, and measurement standards to better understand and move the needle on measuring resilience.

With the support of Jersey Overseas Aid and Comic Relief, CFI conducted research to better understand fintechs, their resilience, and the impact they have on the livelihoods of low-income customers. CFI’s research on fintech resilience is the first attempt to set forth a framework and call to action to understand the interconnectedness between progress at the provider level and the implications for users. Through our research, we found that, by and large, fintechs are operationally resilient, although many early-stage fintechs did have to resort to layoffs and salary cuts, or to slowing growth plans. However, measuring resilience — whether at the level of financial institutions or customers, as well as how they influence each other — is at an early stage of research.

PACT measures resilience as a combination of abilities and access to resources across four dimensions: Preparedness, Access, Capability, and Ties (Networks).

To support our work in understanding how to measure and quantify fintech’s resilience and impact, CFI developed the PACT framework. This helps us analyze the resilience of both fintechs and low-income customers, and see where and how there are direct connections between the two. PACT measures resilience as a combination of abilities and access to resources across four dimensions: Preparedness, Access, Capability, and Ties (Networks). This framework can inform investors and donors who are looking to support low-income customers.

Authors

Jayshree Venkatesan

Senior Director, Consumer Protection & Strategic Industry Engagement

As Senior Director, Consumer Protection & Strategic Industry Engagement, Jayshree leads the development and execution of the consumer protection research and influence strategy, contributing to CFI’s global portfolio. She also oversees the Responsible Finance Forum’s convening and influence model, building a community dedicated to addressing industry challenges in consumer protection and advancing the responsible finance agenda.

With two decades of experience spanning structured finance, innovative business models, consumer research, and policy influence, Jayshree has worked to advance financial inclusion and economic development globally. Before joining CFI, she spent nearly a decade as an independent consultant with institutions like CGAP, the World Bank, JICA, and ITAD, focusing on customer-centric business models and challenges faced by low-income consumers in accessing and using formal financial services. From 2009-2013, she was part of the founding team at IFMR (now Dvara Trust) in India where she led India’s first mezzanine fund for microfinance, which evolved into an alternate investment fund. Jayshree is also a senior policy fellow at the Leir Institute within the Fletcher School of Law and Diplomacy and has served as adjunct faculty at the Fletcher School of Law and Diplomacy, teaching decision analysis for business.

Jayshree is a recipient of the Chevening fellowship for leadership from the Foreign and Commonwealth Office, UK and completed the program at Kings College, London. She earned an MA in international relations from the Fletcher School of Law and Diplomacy, an MBA from Management Development Institute in Gurgaon, and an undergraduate degree in mathematics from Mumbai University.

Evelyn Stark

Former Vice President, Knowledge and Programs

Evelyn served as CFI’s Vice President of Knowledge and Programs where she managed research on women’s financial inclusion, fintech, and MSEs, as well as CFI’s measurement, evaluation, and learning activities and other special projects. Prior to joining CFI, Evelyn developed and executed MetLife Foundation’s financial inclusion and financial health strategies leading a global team focusing on both low- and high-income markets. Evelyn began her career managing special asset (non-performing) portfolios in the United States before moving to Uganda where she led a microfinance industry-building program and provided strategy and operations support to MFIs, projects, and international organizations as a consultant. Following her time in Uganda, Evelyn worked with USAID’s office of microenterprise development and on the Financial Services for the Poor team at the Bill & Melinda Gates Foundation on programs across a range of issues: poverty measurement, conflict-affected regions, savings, and digital financial services.