Models and Barriers for Financial Inclusion

> Posted by Juan Blanco, Associate, Financial Inclusion 2020, CFI
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Last Friday I attended an event organized by The Guardian and sponsored by Visa called “How to Bank Billions: Exploring New Models for Financial Inclusion in Emerging Economies” at George Washington University. Speakers included Camille Busette, lead financial sector specialist at CGAP; Martha Brantley, director of business development at the Clinton Global Initiative; and Stephen Kehoe, head of global financial inclusion at Visa Inc.

The panelists shared new models for financial inclusion, emphasizing the need to truly address consumers’ needs and the importance of building a whole market ecosystem. Camille Busette affirmed that the intersection between these two approaches will truly advance financial inclusion. Other trends were highlighted, especially the need to have traditional financial services providers interested in financial inclusion in order to truly scale up its impact. Marin Holtmann from the IFC pointed out entirely new developments as mobile network operators (MNOs) acquiring banks or banks acquiring MNO licenses, as in the case of Equity Bank in Kenya.

The second half of the discussion was focused on barriers faced by the financial inclusion community. Most participants identified obstacles like regulation and traditional business models. However, the panelists agreed that these obstacles also present themselves as the greater opportunities. Stephen Kehoe illustrated both issues in a very insightful way. He stressed the need to develop public-private partnerships so that regulations are conducive to a growing ecosystem for digital financial services. Kehoe affirmed that the community doesn’t need to work on one particular business model but rather five different business models:

  • Model for digitizing cash
  • Access and distribution model (cash-in, cash-out)
  • Merchant-level model (network of merchants that accept e-payments)
  • Usage model (beyond initial access)
  • Profitability model (scale)

The event generated food for thought, and I think the attendees left excited about new developments, especially about the potential for digital financial services to drive financial inclusion. However, it remains to be seen how these obstacles can effectively become opportunities. We would love to hear from you about new models that are being developed and barriers that remain for the financial inclusion community.

Have you read?

‘The Guardian’ Launches Online Financial Inclusion Hub

Before Diving into Digital: A Guide for Microfinance Institutions

The Political Economy of Financial Inclusion Policy