<p>The Center for Financial Inclusion (CFI) is an independent think tank housed at Accion that works to better serve, protect and empower clients. We learn, test and share insights; promote concrete solutions; and advocate for inclusive, responsible finance that helps – not harms – individuals. We collaborate with stakeholders globally to achieve our goal of enabling 3 billion people who are left out of – or poorly served by – the financial sector to improve their lives.</p>
<p>As an industry-facing body, our business model is intentionally participatory, collaborative and consultative. We value deeply and benefit greatly from the input of our partners, sponsors, and peers that collectively contribute to our mission of achieving financial inclusion. We welcome partnership and collaboration and build it into our model.</p>
<p>We are especially grateful to our Founding Partner Credit Suisse for their longtime support since our inception in 2008.</p>


Our Vision

<p>We focus on inclusive finance needs that are directly related to improving outcomes for the poor. While we will continue our work on improving consumer protection and empowerment and on important market infrastructure issues, we are also elevating work in three key areas of focus: climate change, gender inequality and data opportunities and risks. Our vision requires doing additional research on how financial services can both reduce risks and help customers adapt to the reality of climate change. It also involves conducting additional research and experimentation on how to address the remaining policy and norms barriers that impede progress on women’s participation in the formal financial system. We also seek to better understand the risks and opportunities that the new digital economy and the use of data pose for customers so that we can identify innovative solutions for managing those risks through regulation, data practices by providers, and industry-wide solutions.</p>


Mayada El-Zoghbi

An open letter from CFI’s Managing Director on our new strategy

Blog Post

CFI has begun the new year with many developments and shifts in our agenda. We have been working hard behind the scenes to position our strategy where inclusive finance can have an important role on issues that are most pressing for the lives of the poor. As we have been undertaking this strategy refresh – looking both internally and externally to identify what is critical for the inclusive finance field – we have identified several important areas of focus. At this juncture, we would like to share how our thinking is evolving with regard to our role and future focus priorities.
<h2><strong>First, we want to use this opportunity to relay our continued commitment to improved consumer protections for people at the base of the pyramid.</strong></h2>
CFI has been supporting the Smart Campaign for more than 10 years. This initiative has had many achievements, most notably, its role in defining a set of standards, the Client Protection Principles, which guide how providers adapt their internal practices and how regulators should think about consumer protection regulation and the tools they use to monitor market conduct. We expect to continue to evolve CFI’s work on consumer protection by expanding our research and analysis of how the digital economy is presenting new risks for consumers. We also plan on expanding our work with regulators on both regulation and market conduct.
<blockquote>Consumer protection in the digital economy will be a focus area for CFI research and analysis.</blockquote>
We anticipate Smart Campaign’s role will be that of an industry initiative: it will continue to be supported by the many actors that are part of that community. CFI’s role in the Campaign will be discussed in an upcoming steering committee meeting and will align with CFI’s broader strategic shifts.
<h2><strong>Second, we want to double-down on our advocacy role in protecting and empowering customers.</strong></h2>
We believe there are few organizations in the inclusive finance field that truly prioritize the customer voice and perspectives. Our role is doing just that. Over the years we have used many tools to listen to customers and have used these listening exercises to inform our policy recommendations and our consumer protection standards, and we want to continue to do this. In 2019, we published the Client Voice Rwanda which used surveys and focus groups to better understand Rwandans experiences with mobile money, and our ongoing work in Cambodia is testing IVR technology as a means of collecting client feedback. And we have tested many ways to share information with customers to improve their ability to make informed decisions. In the past year, we ran consumer awareness campaigns in Ghana, Benin, and Uganda using different engagement techniques, such as social media videos, radio dramas and interviews, and journalist competitions, to inform consumers about their rights and responsibilities when accessing financial services.
<h2><strong>Third, we want to elevate the work that will be most impactful on the poor: financial services that help the poor deal with and adapt to climate change, gender inequality, and data opportunities and risks.</strong></h2>
This shift does not mean we stop working with providers or on important market infrastructure issues. It means that given resource limitations, each institution that is focusing on inclusive finance needs to ensure that its focus areas have a direct line of sight on how this work will lead to improved outcomes for the poor. For CFI, we have identified three key areas of focus that we will add to our agenda to help us have a more impactful influence toward improved customer outcomes. These areas are doing additional research on how financial services can both reduce risks and help customers adapt to the reality of climate change, doing additional research and experimentation on how to address the remaining policy and norms barriers that impede progress on women’s participation in the formal financial system, and better understanding the risks and opportunities that the new digital economy and the use of data pose for customers and identifying innovative solutions for managing those risks through regulation, data practices by providers, and industry wide solutions.
<h2><strong>Finally, we want to refine our influence model to improve our impact.</strong></h2>
As an independent global think tank housed at Accion, we know we must continue to partner to have leverage. We want to continue to build partnerships with like-minded organizations to test new ideas, conduct research, share and advocate. As in the past, we strongly believe that collaboration is the key to improving our impact, and we will continue to work together to scale our learnings.
<blockquote>I am excited to see the opportunities that lay ahead for CFI and inclusive finance.</blockquote>
After a few months on the job, I am excited to see the opportunities that lay ahead for CFI and for the inclusive finance field and hope that you will be a part of this journey.

New Decade, New Focus Areas: CFI's Role in an Evolving Space

Case Study

<h1>Challenge</h1>
Financial inclusion means different things to different people. Today’s marketplace represents a wide array of providers with varying interests. Some focus on access to bank accounts, while others build electronic payments infrastructure, and still others develop credit services or insurance. With significant resources invested to expand financial services to low-income, first-time and underserved consumers, the importance of ensuring that newly included people actually benefit from the services cannot be underestimated. To be effective, the financial inclusion community needs alignment and direction about how to tackle a big challenge—too big for any one entity to solve.
<h1>Approach</h1>
CFI approached this challenge by building communities of support and action around a progressive agenda for global financial inclusion:
<h3>Agenda Setting</h3>
We articulated a vision for financial inclusion that includes service range, quality, affordability, convenience, consumer protection and empowerment. We understand what meaningful financial inclusion looks like, and our agenda reflects that.
<h3>Community Building</h3>
We know that constructing a financial inclusion community that serves, protects and empowers customers requires the combined efforts of many actors. We add value to the sector by bringing people together, building consensus and enhancing the industry’s collective knowledge and skills.
<h3>Delivering Insights</h3>
We investigate big, unanswered questions that can catalyze the industry to meet the financial needs of underserved people around the world.
<h1>Results</h1>

Setting an Agenda for Global Financial Inclusion

<h1>Why Benchmarking Matters</h1>
<h5>HOW DO WE KNOW WE'RE BEING EFFECTIVE?</h5>
Achieving financial inclusion requires continuously evaluating how well the industry is progressing and how far we still have to go. Benchmarking activities help us measure progress and identify priorities for research and action. To reach 3 billion people who are left out of or poorly served by the financial sector, a full understanding of progress and setbacks is essential.

&nbsp;
<h1>Approach</h1>
<h5>INDEPENDENT AND CRITICAL PERSPECTIVE</h5>
We are committed to keeping the industry focused on financial inclusion that benefits consumers. CFI assesses public industry data, like the <a href="https://globalfindex.worldbank.org/">Global Findex</a> and the <a href="https://news.gallup.com/reports/233399/gallup-global-financial-health-study-2018.aspx">Gallup Global Financial Health Study</a> with an independent and critical eye, shining a spotlight on where action is most needed. We also participate in joint benchmarking exercises with partners to examine specific aspects of the sector, like the regulatory environment or risk perceptions. In all our benchmarking and research endeavors, we are keen to reality test prevailing narratives, ask tough questions and shine a light on overlooked trends.

&nbsp;
<h1>Results</h1>
<h5>WHAT HAVE WE ACHIEVED?</h5>
<h2>Benchmarking the Enabling Environment</h2>
Together with partners, CFI sponsors and contributes to the Global Microscope—a project led by the Economist Intelligence Unit. Intended to benchmark the enabling environment for promoting financial inclusion, the Microscope assesses the institutional and regulatory ecosystem based on selected indicators across over 50 developing economies. We have helped the Microscope evolve from a study of microfinance in Latin America and the Caribbean into a global study of the broader financial inclusion ecosystem. Additionally, we also look at new indicators on the enabling environment for digital financial services.

With 2018 marking its eleventh edition, the Microscope is one of the few benchmarking tools in the financial inclusion sector that spans a decade or more. Regulators across the world use its scoring and rankings as yardsticks for their own performance. Investors also consult the study when considering investment strategies. Many countries are cognizant of where they stand in the global rankings and are motivated to improve.


Benchmarking Financial Inclusion Progress

<h1>Why Financial Health Matters</h1>
Everyone strives to be financially healthy: to manage day-to-day finances, to weather financial shocks and to pursue longer term goals. Arguably, the core purpose of financial inclusion is to help people achieve financial health.

If the financial inclusion sector begins to measure the financial health of customers and considers ways to support financial health in their products and policies, it will have made a significant shift toward addressing what matters most – customer benefit.

From Idea Into Action on Global Financial Health

<h1>Challenge</h1>
In emerging markets across Africa, microfinance institutions (MFIs) and other financial service providers (FSPs) play a critical role providing financial services to people who are unable to obtain traditional finance. Despite its important role, this sector in Africa faces enormous challenges. In 2013, our <a href="https://www.centerforfinancialinclusion.org/microfinance-banana-skins-2014-the-csfi-survey-of-microfinance-risk/">survey of African FSPs</a> revealed governance and risk management as the primary vulnerabilities in the sector. Weak governance and risky behavior also <a href="http://www.cgap.org/publications/growth-and-vulnerabilities-microfinance">played a role in microfinance crises</a> in Nicaragua, Morocco, Bosnia-Herzegovina, and Pakistan. CFI decided to commit to helping African FSPs focus on governance and risk—and not just individually, but at a sectoral level—to avoid this fate.
<h1>Navigating Obstacles</h1>
We quickly realized we would be starting nearly from scratch. The handful of existing governance resources on the market at the time comprised generic, one-off trainings or were geared to corporate participants. We knew that this kind of classroom-based, lecture-heavy, training was not an effective strategy for senior board members, whose time was valuable and who were often in positions of authority in other walks of life.

We wanted to create something meaningful and effective, tailor-made for FSPs, and delivered in a manner that would stick with participants so that they could lead their organizations and their industry to grow and prosper.

&nbsp;

Governance Peer Learning and Exchange Program Strengthens Financial Institutions in Africa

Our Impact

Our Mission & Vision

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We believe financial inclusion is an achievable goal that will enable 3 billion people who are currently underserved by the financial sector to improve their lives. 

<p>On the heels of the global financial crisis in 2008, we engaged the global financial inclusion community to internalize and implement consumer protection. Working collaboratively with many stakeholders, we developed the first industry standards for consumer protection in financial inclusion via <a href="/about/what-we-do/the-smart-campaign/">The Smart Campaign</a>. By May 2018, over 100 financial institutions, collectively serving more than 42 million people, have been certified for adhering to these industry-accepted standards. Our Model Legal Framework for Consumer Protection provides the regulatory foundation for treating consumers fairly in the financial services marketplace. This policy guidance has been adopted in several countries, including Myanmar.</p>
<p>In 2012, we <a href="/about/what-we-do/financial-inclusion-2020/">spearheaded a movement</a> that mobilized a broad set of stakeholders around the globe to embark on a shared roadmap for action. We recognized that it was possible to bring access to financial services to everyone in the world in just a few years, and put out a call for financial inclusion by 2020. This effort received an enormous boost when, just one year later in 2013, the World Bank announced its Universal Financial Access program, adopting 2020 as its target date.</p>
<p>With dedicated convenings of the <a href="/about/what-we-do/fiec/">Financial Inclusion Equity Council</a> (FIEC), we have helped equity investors candidly and collaboratively examine the most difficult, most sensitive challenges in impact investing in financial inclusion—such as valuation, governance and responsible exits. FIEC serves as a trusted, valuable forum for our community to collectively address responsible investing and sustainable inclusion.</p>


<p>With research and insights, we are making important contributions in the frontier issues in financial inclusion, as well as keeping the community focused on the client. We have commissioned experts to challenge prevailing narratives and perceived silver bullets for financial inclusion. For instance, <a href="/about/what-we-do/research-fellows-program/">CFI Research Fellows</a> have shattered the notion that <a href="/government-to-person-transfers">government-to-person payment schemes</a> and <a href="/technology-inequality-opportunities-and-challenges-for-mobile-financial-services">smartphones</a> are automatic onramps for inclusion. They have also revealed the important ways in which human interaction should offset digital interaction as providers scale their efforts on mobile and online.</p>
<p>Another way we focus on the client is through the <a href="/blog">CFI Blog</a>. Our ongoing coverage of <a href="/topics/refugees-and-migrants">refugees</a>, client voice, the financial diaries and <a href="/series/keeping-clients-first/">Keeping Clients First</a> are just some examples of the client focus we’ve built into our digital sharing, learning and debate platform.</p>


CFI is charting a course for global financial inclusion and bringing the industry together around a customer-centered vision.

The Global Microscope

<h2>Challenging the Global Narrative</h2>
<p>The Global Findex is a survey of the financial habits of adults in 144 countries with data collected in 2011, 2014 and 2017. Our industry relies on the Findex to understand how people are using (or not using) financial services. It is the best available demand-side data for measuring global progress toward financial inclusion, and the World Bank generously makes the data publicly accessible.</p>
<p>With each new release, CFI conducts its own critical review of the Findex data. In our 2015 analysis, we analyzed which countries were on track to achieve universal financial access by 2020 and projected where the gaps would be. We also <a href="http://www.centerforfinancialinclusion.org/by-the-numbers-benchmarking-progress-toward-financial-inclusion/">highlighted the gap between access to and usage of financial accounts</a>, emphasizing that account ownership is only valuable if accounts are actively used. This message only intensified when we analyzed the 2017 data, and we honed in on three new messages: the absence of discernible progress in savings, credit or resilience. Given the global effort to promote savings and extend access to credit, the flat or negative growth in these core financial services was indeed disappointing. And resilience – the ability to recover from a financial shock – is an essential component of financial health. The lack of growth in resilience, savings and credit suggests a need to reflect, re-calibrate and re-engage as we continue to pursue our common goals.</p>
<p>&nbsp;</p>


Shedding Light on the Global Findex

<h2>Calling Attention to Major Trends and Markets</h2>
<p>We believe it’s important to focus attention on under-appreciated trends and market segments. In our <a href="http://www.centerforfinancialinclusion.org/about/what-we-do/mapping-the-invisible-market/">Mapping the Invisible Market project</a> (2013-2015), we examined the likely impact of global demographic and economic trends on financial inclusion. On the economic side, we noted that an enormous segment of people is moving from abject poverty to the $4-$10 dollar a day range, which gives them a small amount of disposable income and potentially increases their demand for financial services. On the demographic side, we highlighted a nearly unremarked demographic shift: older people are the fastest growing population segment in regions including East Asia, Latin America and Eastern Europe. We followed up by examining the financial services needs of older people and the inadequacy of pension services for the vast majority of people in our target market.</p>
<p>We also focused on <a href="http://www.centerforfinancialinclusion.org/about/what-we-do/financial-inclusion-for-persons-with-disabilities/">people with disabilities</a> – another severely excluded group. Through partnerships with microfinance institutions in Paraguay and India, we developed and promoted a roadmap for disability inclusion that remains one of the only such guides available. And our partner institutions continue to reach out and serve thousands of people with disabilities who were previously excluded.</p>
<p>&nbsp;</p>


By studying where we’re making progress and where we aren’t, CFI is a critical and credible advocate for financial inclusion.

<p>While financial health resonates universally with consumers, providers and policymakers, the concept had not been adapted to or tested in a global context. In 2015, the <a href="https://cfsinnovation.org/">Center for Financial Services Innovation</a> (CFSI, now the Financial Health Network) established a financial health framework for the United States, but without adaptation, this framework could not be applied around the globe, where financial lives are lived very differently. To validate the concept of financial health, we set out to examine how people in lower income countries think about and experience financial health.</p>


Financial Health Reports

<p>We are committed to moving financial health from theory to practice. Here’s what we’ve done so far:</p>
<ul>
<li>In partnership with CFSI and <a href="http://www.dalbergdesign.com/">Dalberg Design</a>, and with support from the <a href="https://www.gatesfoundation.org/">Bill and Melinda Gates Foundation</a>, we created a global framework for assessing financial health. Our research in India and Kenya helped us determine the universal and contextual factors that define financial health, even for lower income people in developing countries. In these countries, we observed that people have a harder time realizing financial health because their incomes are not only lower, but also irregular and unpredictable. People who use a variety of formal and informal financial tools have greater financial health.</li>
<li>In partnership with the Microfinance Centre in Warsaw, Poland, and with support from MetLife Foundation, we are building a financial health tool for Eastern European microfinance institutions and their customers to help gauge and improve customer financial health.</li>
<li>We tested the financial health with Accion’s own employees as a way to understand how financial institutions and other employers can support the financial health of their staff. This energized our whole team to improve our own financial health and to promote the concept in the workplace.</li>
<li>We are building a network of people and organizations that are working to make financial health a north star for financial inclusion.</li>
</ul>


<ul>
<li>We laid a foundation for global financial health that is informing additional research, product and policy design, and models for serving customers.</li>
<li>We are launching a financial health assessment as a consumer-facing tool in Eastern Europe. We realized that a simple quiz has the power to motivate consumers to improve their financial health, and we are developing an app that takes this discovery to the next level.</li>
<li>We learned how financial health may be a relevant concept for employers. By turning our research on ourselves here at Accion, we identified the financial health issues of Accion staff, and motivated our internal stakeholders to tackle the issues we found. This experience convinced us that employers can benefit from measuring and supporting the financial health of workers.</li>
<li>We have raised awareness and created a global conversation on financial health that includes policy makers, banking associations, researchers and others. Interest is growing. Our growing community includes more than 200 practitioners and researchers around the world.</li>
</ul>


CFI is moving financial health from a U.S.-oriented concept to a usable global framework and practical toolset.

<p>In partnership with Mastercard Foundation and FMO Entrepreneurial Development Bank in 2015, CFI launched a unique governance and risk management executive education opportunity for African FSP leaders in the form of the Africa Board Fellowship Program.</p>
<p>The Africa Board Fellowship is an unmatched peer exchange program specifically for CEOs and board members of African FSPs focused on a variety of topics in governance and risk. The six-month program offers in-person, peer-led seminars featuring real life case studies, role plays, interactive animation and networking, together with a virtual platform for structured learning, dialogue and collaboration. During the program, fellows establish individual and institutional goals and work with an advisor on achieving those goals. Fellows continue to have access to a virtual community forum even as alumni. In this way, our program is creating a network of leaders across the continent who can connect with each other about the similar challenges they face.</p>


<p>The Africa Board Fellowship is not only changing the way board members and CEOs lead their institutions, but also fortifying African financial services for underserved communities at an industry level. ABF Fellows are more effectively implementing good governance strategies, managing risks, and becoming more client-centric as a result of their experience in the ABF program.</p>
<h2>Doubling Down on Good Governance</h2>
<p>ABF Fellows are becoming more effective supervisors of their institutions, as evidenced by implementing a robust system of checks, balances and internal controls. These are especially crucial in competitive markets where pressure to grow can lead to relaxed business practices. As Vincent Kaheeru, ECLOF Board Chairman and ABF Fellow explains, “We’ve put a strong emphasis on the quality of lending and invested in training our frontline people in credit appraisal and administration, and in the importance of following policies to the letter.”</p>
<h2>Mitigating and Anticipating Risks</h2>
<p>ABF Fellows have used the program to hone their ability to manage risk. For example, following a period of political instability in 2016, the board and CEO of Microcred, based in Ivory Coast, took steps to manage and anticipate risks as a result of ABF. To reduce concentration risk, the board embarked on an expansion plan, successfully opening new branches and diversifying its client base. The Board also directed staff to pair experienced branch managers with newer ones to more effectively cope with the strain of higher portfolio at risk. Microcred also established a board-level committee that meets monthly to review and evaluate all areas where the FSP might be at risk.</p>
<h2>Embracing Client Centricity</h2>
<p>Because boards and management are often far removed from clients, the ABF Program emphasizes client centricity. During the program, ABF fellows conduct client visits to appreciate the triumphs and hardships of entrepreneurship as well as what it’s like to be an FSP client. Client visits make a big difference. We see ABF Fellows not only taking the practice back to their FSPs, but also modifying their products and practices to better serve clients.</p>


ABF At-A-Glance (2015-2018)

CFI addresses gap in the market to help financial service providers thrive, survive and serve underserved clients.

Mission & Vision

Our Mission

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An independent global think tank

We engage and challenge the industry to better serve, protect and empower clients.

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Our Vision

Improving outcomes for the poor

We seek a world in which people have the financial ability to deal with and adapt to climate change, gender inequality, and data opportunities and risks.