> Posted by Sonja Kelly, Fellow, CFI
When we wrote about the topic of aging in our recently-released paper Aging and Financial Inclusion: An Opportunity, I have to admit that I was skeptical that any stakeholders would be motivated to action — regardless of how compelling the paper was. Aging, I thought, is something people feel uncomfortable talking about, whether because they worry about their own old age, or that of their parents, or because they consider older people an uninteresting market segment. Whatever the reason, I was worried that our effort to call attention to this issue would fizzle out and fade into the internet abyss.
I was thrilled to be proved wrong.
Last week, discussing the new paper in our various meetings in Washington, D.C. and in New York City and in a global webinar, we learned that much more is happening in this area than we had initially known, and that more people are willing to consider what aging may mean in their own work than we expected.
For example, we heard about innovative business models that help people save for their older years. What is missing is a forum for those involved in this area to discuss their work and take lessons from others working on similar issues. At our roundtable in New York, we heard from Invest India Micro Pension Services, which is working with the informal sector workforce to increase voluntary contributions in the government pension fund. The service has grown to serve over 700,000 customers. Their biggest challenge isn’t a lack of funds among the informal sector, but convincing people to save for their older age. Parul Khanna, who heads new projects at the institution, showed the discussion group a simple tool that their “financial fortune tellers” use which shows people how much they will have in their old age if they contribute a particular amount each month. She was excited about effectiveness of the tool, but was interested in hearing about other ways to convince people to save for the long-term.
Representatives from the Multilateral Investment Fund (MIF) from the Inter-American Development Bank talked about convincing people to save for the long-term by increasing the convenience of saving or by using behavioral “nudges”. For instance, the MIF is looking at ways people receiving a large remittance payment could be prompted to save in a commitment savings device.
I’m glad there are more of us working in this area than I first thought, but it was evident that initiatives focused on aging are a very small proportion of the wider body of financial inclusion projects and programs. I concluded that more discussion is needed among those who are doing work on aging and financial inclusion to better understand what does and doesn’t work.
Those who were new to the issue of aging and financial inclusion were more open to considering action than I had assumed they would be. One of the primary topics that emerged was that of women and aging. With women living on average five years longer than men and in many cultures marrying men older than they are, many women spend their last decade or more as widows. They will require more financial assistance in their older years. Representatives from Pro Mujer and Women’s World Banking emphasized this point, and from their perspective as part of the microfinance community saw a great opportunity for action to be taken. Several discussion participants from the Inter-American Development Bank referred to their own mothers and some of the financial choices they were facing. In particular, people brought up the issue of fraud that women may face, intensified by losing a partner or not having another person to consult on money matters. It became clear that the issue of older women has particular urgency.
Technology issues also provoked discussion. It is not the cognitive capacity of older people that keeps them from using technology, as many participants agreed. Rather, it is the design of the technology and the accompanying user instruction that matters.
As explorations of the links between aging and financial inclusion continue to gather traction, I very much look forward to sharing with you actions that are taken to address this growing need. I would love to hear your thoughts in the comments below on possible actions that you think could be taken—or that you are already taking.
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