This post originally appeared on the World Bank's <a href="http://blogs.worldbank.org/psd/advancing-digital-financial-inclusion-asean?CID=FAM_TTFinanceMarketsEN_D_EXT">blog</a>.

How can digital financial services effectively support financial inclusion? To answer this question, the World Bank recently collaborated with the Association of Southeast Asian Nations (ASEAN) Working Committee on Financial Inclusion (WC-FINC) on a study titled “<a href="http://documents.worldbank.org/curated/en/856241551375164922/Advancing-Digital-Financial-Inclusion-in-ASEAN-Policy-and-Regulatory-Enablers">Advancing Digital Financial Inclusion in ASEAN: Policy and Regulatory Enablers</a>.” This study analyzes a wide range of digital financial services (DFS) through a framework based on that of the Payment Aspects of Financial Inclusion (PAFI) <a href="http://www.worldbank.org/en/topic/financialinclusion/brief/pafi-task-force-and-report">report</a>.

According to the use of the PAFI framework (see figure below), three foundations must be present to enable the spread of DFS: government and private sector commitment to DFS development, a sound legal and regulatory framework concerning DFS, and an enabling financial and information and communications technology infrastructure. Atop these three foundations stand four catalytic pillars that increase uptake and use of DFS: improving the design of DFS products (and of the regulations that govern them), expanding agent networks and other access points, spreading financial literacy, and shifting large payment streams to flow through digital channels.

<img class="size-full wp-image-34888 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2019/04/Screen-Shot-2019-04-09-at-1.53.57-PM.png" alt="" width="800" height="532" />

Conducting this study did not come without challenges. From its start, in early 2017, the authors struggled to define such fundamental concepts as DFS itself. (At the time, terms for the fledgling industry and its products, such as “DFS,” “FinTech,” and “e-money,” were often applied loosely and interchangeably.) They also struggled, at times, to tease out the effects of prudential regulations and financial data on financial inclusion, because many regulatory bodies treat the topic in isolation from other objectives. But the study team persevered, and they emerged from their task with the following advice for DFS policy makers and regulators.

The policy and regulatory framework for DFS should be approached comprehensively, looking to enable not just the digital economy (through enhancing connectivity, ID and data infrastructure, institutional capacities, and inter-institutional coordination mechanisms) but also financial inclusion (through supporting expansion of financial infrastructure, products geared toward low-income customers, and nonbank financial institutions). The ASEAN countries vary widely in their level of financial system development, and thus they have a wide range of needs in the DFS space, from increasing the efficiency or interoperability of their basic digital payment infrastructures to refining regulations for novel DFS products such as crowdfunding and P2P lending. But despite this variance, several of the study’s recommendations apply to all ASEAN countries, including the following:
<blockquote>The policy and regulatory framework for DFS should be approached comprehensively, looking to enable not just the digital economy but also financial inclusion.</blockquote>
<ul>
 	<li>Gather more granular data on DFS products and infrastructure, both to provide a more comprehensive understanding of the DFS ecosystem and to guide policy making and regulation</li>
 	<li>Establish clear policy goals, institutional mechanisms for intergovernmental coordination, and monitoring and evaluation programs, all integrated within financial inclusion strategies</li>
 	<li>Continue to pursue traditional goals for the financial sector, such as stability, integrity, and consumer protection</li>
 	<li>Maintain the region’s already-strong public-private coordination with the DFS industry through institutional mechanisms such as regulatory sandboxes</li>
 	<li>Continue ongoing bilateral and regional peer-learning exchanges, and establish new exchanges, to close the gaps among ASEAN countries in the technical capacity of regulators and supervisors</li>
 	<li>Level the playing field between banks and nonbanks (for example, by allowing the latter access to retail payment systems) to increase access to DFS for underserved or excluded segments of the population</li>
 	<li>Incorporate proportional and risk-based approaches into their handling of cross-cutting topics such as consumer protection, data management, and the prevention of money laundering and terrorism financing, all of which face new digital risks as DFS expands</li>
 	<li>Monitor emerging topics such as e-commerce, cybersecurity, and data management with an eye toward their potential contributions to financial inclusion</li>
</ul>
The final shapes of the DFS ecosystems of ASEAN countries remain to be seen, but the work that ASEAN authorities have done and continue to do to understand these ecosystems, adjust their policies concerning them, and share the lessons they’ve learned with their regional and global neighbors is an encouraging start. The World Bank congratulates the ASEAN WC-FINC for having undertaken this study.

Advancing Digital Financial Inclusion in ASEAN

East Asia and Pacific

Delivery Channels

Digital Financial Services

Blog Post

On a recent trip to Asia, I visited the offices of a federation of cooperatives. The backroom where the cooperatives’ files were kept had the musty smell of a library, with stacks of paper and folders with wilted edges teetering toward the ceiling. The scene was a stark reminder of how captive many financial institutions still are to a paper-based reality, with data on customers or operations often buried or hard to access.

This year, I also heard a representative of a central bank in East Africa share how the lack of up-to-date data in-house, such as rates of access or the gender gap, forced it to ask financial institutions it supervised for data. The bank might then have to wait days for an answer, even for a potentially straightforward type of information.

Despite two very different environments, these two offices share a common challenge: the need for data and better ways to collect, store, and analyze it. This, in a nutshell, is what prompted the U.S. Agency for International Development (USAID), Bill &amp; Melinda Gates Foundation (BMGF), Omidyar Network, and BFA to launch the <a href="https://www.r2accelerator.org/">Regtech for Regulators Accelerator</a> (R2A) in 2016.
<h3>What We Did</h3>
R2A was a bet on both a set of topics (regulatory technology for regulators, or “regtech,” and supervisory technology, “<a href="https://static1.squarespace.com/static/583ddaade4fcb5082fec58f4/t/5bbf9a520d929792c05866e1/1539283556587/R2A+CNBV+Case+Study.pdf">suptech</a>”) and an approach to innovation (crowdsourcing ideas from start-ups to address challenges faced by financial authorities). The singular focus was to demonstrate, in collaboration with financial authorities and technology companies, how regtech could help overcome certain long-standing constraints to effective oversight and compliance, and in so doing, increase trust in formal financial services.

So after two years of innovation and collaboration, what did we learn?

In markets where millions of people are now using formal financial services through digital channels, the stakes for consumer protection and market integrity are getting higher. Yet this also means a commensurate increase in opportunity to use the data generated from these services to revisit standard methods for oversight and compliance. Tools like machine-learning, <a href="https://static1.squarespace.com/static/583ddaade4fcb5082fec58f4/t/5beb3a3b352f53a18862a9e1/1542142560572/R2A+API+Case+Study.pdf">application programming interfaces</a> (APIs), and natural language-processing are not merely buzzwords in this context. They are, in the right circumstances, viable engines for regtech applications in markets in the developing world.
<h3>Even Prototypes of Regtech Applications Can Drive Meaningful Progress</h3>
Looking over the last 20 months with R2A, our initial hypotheses seemed to hold true:

1. Financial authorities see value in adopting technology to the same degree as financial institutions;
2. Tech start-ups see commercial opportunity in serving financial authorities as customers; and
3. Initial testing of regtech applications developed jointly by startups and financial authorities with a competition model can demonstrate efficacy in resource-challenged environments.

Our lessons were drawn from three competitions held to prototype regtech solutions specifically designed to address challenges identified by financial authorities. Interestingly, dozens more regulators have since approached R2A expressing a desire for similar engagements. Our work with the Comisión Nacional Bancaria y de Valores (CNBV) in Mexico showed how a combination of artificial intelligence-powered analytic tools and better data dashboards might facilitate better insights for anti-money-laundering (AML) efforts. We anticipate that the tool prototyped by R2A and the CNBV is also anticipated to enable the CNBV to reduce the length of AML-related on-site inspections from 3 to 5 weeks to 3 to 5 days.

Likewise, our work with the Bangko Sentral ng Pilipinas (BSP) in the Philippines showed how the use of a <a href="https://static1.squarespace.com/static/583ddaade4fcb5082fec58f4/t/5beb3b2fb8a04525b8cabc6f/1542142794556/R2A+Chatbot+Case+Study.pdf">chatbot</a> might simplify and automate the receipt and resolution of customer complaints. This made technology a key access point for a fundamental consumer protection mechanism, not just a new way to access financial services. Finally, our work with the BSP on a second use case showed how an API for data-reporting might dramatically reduce the hours spent by both the financial authority and firms to validate data and correct errors each reporting period, resulting in higher data quality and timely compliance. By using the API, the BSP would be able to reduce the time to process data submissions from 30 minutes to 10 seconds. And similarly, it would enable the BSP to go from 29 reporting schema, many of which involve Excel-based reports, to one unified scheme.

All told, R2A received 31 applications from companies across 13 countries and 5 continents to collaborate with the BSP and CNBV, most of whom were new to engaging with financial authorities. This proved to us that even a field as staid as market oversight and regulatory compliance can pique the interest of technologists when public sector counterparts show a willingness to embrace innovation to overcome long-standing data challenges. Two notable factors contributed to this level of interest: concerted efforts to reach out to the tech community, and care taken by R2A and the financial authorities to clearly define the functional and technical specifications related to the underlying problem.
<h3>Preliminary Insights for Future Engagements</h3>
Finally, while our compressed timeline for engagement meant that R2A could not develop full-fledged solutions, R2A’s sprint nevertheless yielded promising initial results and succeeded in developing functional prototypes for each of the three chosen challenges. By prototyping working solutions in close collaboration with the financial authorities, R2A reduced the difficulty in taking the next step, should the financial authorities choose to do so through their standard procurement processes. We are especially encouraged by the stated intent of our financial authority partners to sustain and build on the gains made with R2A, whether in the form of investing their own resources in additional regtech solutions, identifying additional use cases for regtech, or fully integrating the prototyped solutions.

As we look toward the evolution of regtech, there are several important insights we gained from our investment in R2A:
<ul>
 	<li>Regtech should serve, not co-opt, a broader strategy for oversight and compliance: An excellent starting point for approaching regtech applications is to focus on ongoing pain points. But in the long run, greater opportunity exists to rethink long-standing approaches for the conduct of market oversight and craft a strategy within which regtech can operate. In other words, start by focusing on incremental gains while still scoping out more transformative changes. Likewise, a more holistic approach to regtech can reduce the risk of it being perceived as an easy fix for weak governance. Regtech can be a vehicle for more transparent, accountable oversight, but only if a baseline level of human capacity and organizational readiness exists (or can be strengthened) for introducing regtech applications in a phased manner over time.</li>
 	<li>In an ocean of newly-available data, more is not always better: A temptation with the greater volumes of accessible, analyzable data is to default to collecting as much as possible. But the focus should remain on precision and on collecting only the data that serves a clear need for a financial authority with the skills to collect, process, and analyze it.</li>
 	<li>Data-savvy authorities depend on data-savvy financial firms (and consumers): Many regtech applications focus specifically on improving the efficiency of information flows between firms and financial authorities. But in many markets, financial firms are equally early in their adoption of digital tools other than spreadsheets and email for operational and compliance purposes. This underscores the value of navigating the regtech landscape in a collaborative manner, where the adoption of new tools corresponds to the readiness of all market participants. This relates to another sector-wide concern: data protection and data security concerns that, if not accounted for, could impair the efficacy of regtech applications and trust in other digital interventions.</li>
 	<li>Procurement practices may have an influence on the extent and type of technology solutions relied on by financial authorities: We think R2A's success is in part due to how it facilitated productive engagement between two groups (financial authorities and tech companies) that do not often interact closely. These interactions were crucial to helping the participant authorities better understand what problems they wanted to solve and which regtech applications might offer viable solutions. Moreover, they occurred outside the traditional processing of defining “specs” and issuing a request for proposals. R2A's focus was not on assessing how standard procurement processes used by either the BSP or CNBV select technology vendors. But the R2A experience hinted at how procurement processes can influence whether and how novel (and potentially better) technology solutions are integrated into the daily rhythm of oversight and compliance. Procurement aside, R2A demonstrated the value of “pre-procurement” exercises, like design-thinking workshops with industry, to uncover overlooked opportunities for improvement and bring new views to the table.</li>
</ul>
Our vision is to go beyond the prototypes that R2A pioneered. These preliminary insights, among many more, will help us do so. Whether we work with financial authorities to engage technologists through competitions, hackathons, bootcamps, or tried-and-true requests for information, we will continue to learn what works best for tackling challenges faced by partner financial authorities. In all cases, we will place a premium on tailoring the approach to regtrech to the capacity of the financial authority.

Without a doubt, the progress we have made with the BSP and CNBV was not merely a product of our assumption that regtech is here to stay. In fact, our initiative, R2A, had the benefit of working with highly dedicated financial authorities that were willing to take a chance on something new. And R2A itself has demonstrated the value of bringing to the table diligence, adaptability, and talent.

What does this mean for customers who rely on cooperatives in Asia or who live in a digitally vibrant Africa? We are not under any illusions that regtech applications will be a feasible reality tomorrow for every stakeholder. But we do believe that we can help chart out viable paths for incremental adoption of digital tools that are fit for purpose. Sooner rather than later, those stacks of disordered paper will give way to cloud-based storage of data, and those ad-hoc data requests from the central bank will be replaced by seamless flows of data and analysis.

Beyond Prototypes: Donor Insights on Regtech for Inclusive Finance

Latin America and The Caribbean

Mexico

Philippines

Enabling Environment

Policy, Regulation and Government Initiatives

After great anticipation, three years’ worth to be exact, the 2017 Global Findex Database was officially released this morning. The Global Findex is the authoritative data source on global progress toward financial inclusion. Released every three years, the Global Findex surveys more than 150,000 adults in 144 economies to better understand how people access and use financial services to make payments, and also to save and borrow.

Since the 2014 Findex, the percent of the global population that has a bank account with a financial institution or mobile money service rose from 62 percent to 69 percent. Five-hundred and fifteen million individuals opened an account for the first time over the past three years, reducing the unbanked population to 1.7 billion adults worldwide. However, the new data also reveal critical shortcomings in progress. For instance, the financial inclusion gender gap didn’t improve. Globally, women remain 7 percent less likely to own a bank account than men.

Here are a few of the 2017 Global Findex’s high-level statistics:
<ul>
 	<li>Half of the 1.7 billion unbanked individuals worldwide live in just seven countries: Bangladesh, China, India, Indonesia, Mexico, Nigeria, and Pakistan.</li>
 	<li>In higher-income countries, 94 percent of adults have a bank account, while in developing countries this figure is 63 percent.</li>
 	<li>The proportion of individuals globally who send or receive digital payments increased from 42 percent to 52 percent; this figure is 76 percent for those who have a bank account.</li>
 	<li>In Sub-Saharan Africa, the proportion of individuals with a mobile money account nearly doubled to 21 percent, while bank account ownership increased by only 4 percent.</li>
 	<li>Globally, roughly two-thirds of those who are unbanked have a mobile phone, but Sub-Saharan Africa is the only region where mobile money penetration is greater than 10 percent.</li>
 	<li>In addition to the persistent gender gap, the difference in bank account ownership rates between the rich and the poor has not improved, with those living in the wealthiest 60 percent of households in the poorest 40 percent of economies 13 percentage points more likely to have a bank account.</li>
 	<li>The accounts of one-fifth of banked individuals worldwide are inactive.</li>
 	<li>The Findex’s financial resiliency question revealed that individuals in higher-income economies would be far more likely to be able to come up with emergency funds than those in developing economies.</li>
</ul>
For more findings, you can access the <a href="http://globalfindex.worldbank.org/">2017 Global Findex Database report</a>, <a href="https://openknowledge.worldbank.org/bitstream/handle/10986/29510/211259ov.pdf">an abridged overview report</a>, and <a href="http://globalfindex.worldbank.org/sites/globalfindex/files/2018-04/Global%20Findex%20database_0.xlsx">the full dataset</a>.

In several weeks, the CFI will release a brief distilling our key takeaways from the 2017 Global Findex.

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New Global Findex: 69 Percent of Global Population Is Banked

Europe and Central Asia

Middle East and North Africa

South Asia

Sub-Saharan Africa

Global Findex

Access Usage Gap

Mobile Banking

Payments

Trends

I have been an inclusive insurance enthusiast ever since I worked for Opportunity International and witnessed the experiments that later became <a href="https://microensure.com/">MicroEnsure</a>. In those early days, Richard Leftley framed insurance as the missing piece in the game of Chutes &amp; Ladders (Snakes &amp; Ladders for those outside the U.S.). He likened credit and savings to ladders that could provide a way up for those with lower incomes --but without insurance, each borrower or saver was just one disaster away from slipping back down into destitution. I remember his—at the time—revolutionary concept of paying insurance claims within 10 days or less. He would say that days-to-payout was the only report he wanted on his desk every morning. (Today, of course, payouts can be automatic or even come pre-loss.)

As is often the case with breakthroughs, Richard, of course, was not alone. Thanks to many innovators, an entire industry has emerged with profitable models reaching millions of people, and there is a growing understanding around the world, across social strata of the impact that insurance can have for families, communities and societies. The NGOs that pioneered microinsurance spurred the interest of commercial giants such as Allianz, AXA, MetLife, Swiss Re and Zurich, which have lent their considerable weight to solving the business challenges of extending insurance to underserved and unserved customers. Market catalysts such as A2ii, MicroInsurance Centre, MicroInsurance Network, ILO’s Impact Insurance Facility, and Cenfri have offered insights on everything from the customer experience, to good product design, to proving the business case, to creating an enabling regulatory environment for reaching new insurance markets.

Into this mix comes a new paper on inclusive insurance from the Center for Financial Inclusion at Accion and the Institute of International Finance. <a href="http://bit.ly/2AFOUZa">Inclusive Insurance: Closing the Protection Gap for Emerging Customers</a> gives a global snapshot of the inclusive finance sector, examining how providers have extended service offerings using new technologies and innovative business models, and highlighting the challenges that persist. It suggests how the industry can further expand its reach to this massive, virtually untapped potential market. The study focuses on actual on-the-ground experience of providers in emerging markets.

Here are a few of the report’s main takeaways:

Insurers are bullish on the size of the market opportunity. Using Allianz’ model, which refers to the inclusive insurance market as those with the bottom 60 percent of incomes, we estimate the potential market to be 3.8 billion people worldwide (though more study is needed on segmentation). Insurers report feeling great personal satisfaction about the social impact of their products -- but by far the most significant drivers of inclusive insurance are the base of the pyramid (BOP) market size and the rise of the middle class. In fact, Martin Hintz, previously with Allianz, said, “Don’t get distracted by charity! There is a clear business case.”

<a href="https://centerforfinancialinclusionblog.files.wordpress.com/2018/01/market-graphic.png"><img class="wp-image-24870" src="https://centerforfinancialinclusionblog.files.wordpress.com/2018/01/market-graphic.png" alt="" width="614" height="349" /></a>

Insurtech goes far beyond mobile payments. Insurers are using tech innovations to build new products, increase trust among customers, and more. In Colombia, prospective DaviPlata customers can send an SMS with their national ID number and they are instantly enrolled. In Indonesia, robo-calls and automated text messages teach Allianz customers about the products they are already enrolled in and build customer trust and loyalty.  In Zimbabwe, weather satellite systems provide data that allows Blue Marble Microinsurance to offer parametric insurance with automatic payments in the event of drought – without customers even submitting a claim! And all around the world, new sources of data are available on customers who were previously invisible, with sophisticated analytics making it possible to design products to meet their needs.

Simplicity is the best innovation for the BOP. Insurers are cutting down costs and reaching new customers by simplifying processes and products. MicroEnsure has designed life, accident and hospitalization products with no exclusions, which dramatically reduces the cost of enrollment. Some policies are based only on phone numbers, without even capturing customer names, ages or any demographic information. Recognizing that lower income people often prefer to pay for things in small increments, Lorenzo Chan of Pioneer Life in the Philippines promotes “insurance in a sachet”—a concept that in many emerging markets is yielding trials of micro terms, micro cover and micro payments. And Aviva looks at the full range of services people need at different life stages (not limited to insurance), and bundles them together into simple packages that, in their words, “kill complexity.” Take, for example, the wonderfully named YOU, ME and WE products in Poland. In the case of WE, the needs of young families are met through a bundle that includes insurance for property, education, childcare, critical illness for parents and children, disability, and household goods.

New customers are being identified. AXA has shared a <a href="https://cdn.axa.com/www-axa-com%2F57b5a3a4-c7cc-4dea-97c9-5f7d9f47232c_sheforshield_final-web2015.pdf">landscape study</a> on the women’s market for insurance, predicting the annual premium value of the women’s global market to grow six to nine times by 2030 to between $569 and $874 billion. Met99 is reaching rural residents in Mexico by partnering with the Government. And insurers are looking at the customer journey for low-income mass markets for health insurance in India as well as for niche markets such as motorcyclists working in the sharing economy.

Insurers see new opportunities to move risk models from protection to prevention. This is especially apparent in regards to climate risk. As an example, Blue Marble Microinsurance, Swiss Re, and others are not only ensuring that farmers have agriculture insurance and other financial services, but they are also working with a range of partners to provide access to farm inputs that help guard against climate risk through water conservation methods and other climate-smart strategies.

Distribution channels make or break inclusive insurance. Microinsurance was first distributed through community organizations, microfinance institutions and cooperatives that addressed the last mile challenge and served hard-to-reach customers. In the last 10 years, mobile network operators have stepped in with the convenience of payments by mobile phones and banks have begun to cross-sell as part of their bouquet of services. Insurers are working with retailers, postal banks, workplaces, governments, and everyone you can think of to aggregate customers and find convenient ways to reach them. CARD Pioneer Microinsurance (CPMI) in the Philippines works with over 70 distribution partners.

This last point is one of the key findings of the report -- that insurers are doing their part, but they can only do so much on their own. They need partners from the private, public, and non-profit sectors to come alongside to make protection possible for all. In his foreword, Denis Duverne of AXA writes that “Informal risk management is ten times less efficient than formal protection mechanisms, and one single emergency can force families to sell productive assets, move back to the village, remove children from school to help the household earn extra income or go back into poverty.” With these kinds of consequences, the real life game of Chutes &amp; Ladders takes on added urgency, and all those who can play a part in ensuring protection for the vulnerable should seek an insurer to partner with. The insurers are ready.

To learn more about inclusive insurance, from the many sources doing good work around the world, see the curated <a href="https://centerforfinancialinclusionblog.files.wordpress.com/2017/12/inclusive-insurance-resource-list-pdf-final.pdf">Resource List</a> that accompanies <a href="http://www.centerforfinancialinclusion.org/publications-a-resources/browse-publications/973-inclusive-insurance-closing-the-protection-gap-for-emerging-customers">the paper</a> to get a glimpse of the wealth of material that insurance experts have produced.

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Have you read?

<a href="https://cfi-blog.org/2017/04/13/making-microinsurance-work-in-bangladesh-three-takeaways/">Making Microinsurance Work in Bangladesh: Three Takeaways</a>

<a href="https://cfi-blog.org/2014/10/06/bundling-mhealth-info-and-microinsurance-to-improve-health-outcomes-in-kenya/">Bundling mHealth Info and Microinsurance to Improve Health Outcomes in Kenya</a>

<a href="https://cfi-blog.org/2014/08/29/the-formula-for-mobile-microinsurance-success-in-senegal-and-pakistan/">The Forumula for Mobile Microinsurance Success in Senegal and Pakistan</a>

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Inclusive Insurance: Closing the Protection Gap for Emerging Customers

Mainstreaming Financial Inclusion: Best Practices

Insurance

Insurance Companies

We use the term “inclusive  insurance” to encompass many different approaches to reaching the unserved,  underserved, vulnerable, or low-income populations in emerging markets with appropriate and affordable insurance products. These range from microinsurance for people with very little disposable income to new  products and  services for an emerging middle class around the globe who have not been served by traditional  insurance. Based on insights from written submissions and in-depth interviews with 30 people across 22 institutions, this report invites us to re-think the concept of insurance and its fundamental role in society.
<h2>Major Findings</h2>
In  the  broadest  terms,  the  challenges  of  providing  insurance  to  lower-income  population segments are similar to those of providing mainstream insurance: identifying, understanding, and connecting with customers; providing relevant products; and carrying out the administrative work of collecting premiums and paying claims. For customers at the base of the economic pyramid, the small incomes from which premiums must come require insurers to solve these challenges in highly cost-efficient ways. Adding to the intensive cost pressure, several factors amplify the challenge of connecting with these customers: their remote locations, lower education levels, and lack of experience with formal institutions.

Strategies for effectively serving this target market include:
<ul>
 	<li>Simplifying products so they are easy to understand, easy to enroll in, and easy to claim against. For institutions, such simple products engender trust and are lower cost to provide.</li>
 	<li>Finding new distribution channels and aggregators-from telcos to farmer cooperatives to banks—to identify and connect with low-income customers.</li>
 	<li>Leveraging digital channels and new “insurtech” (insurance technology) innovations to connect with, and serve, low-income customers.</li>
 	<li>Implementing new business models and products to provide and administer the risk mitigation solutions at scale that meet low-income customers’ needs.</li>
</ul>
This report is part of a two-year initiative, <a href="http://www.centerforfinancialinclusion.org/programs-a-projects/mainstreaming-financial-inclusion">Mainstreaming Financial Inclusion: Best Practices</a>, to help advance efforts of financial institutions to reach customers at the base of the economic pyramid. This report was completed in partnership with the <a href="http://www.iif.org">Institute of International Finance</a>, and made possible with support from <a href="https://www.metlife.com/about/corporate-responsibility/metlife-foundation/index.html">MetLife Foundation</a>.

Institute of International Finance

MetLife Foundation

Inclusive insurance

Report

Contrary to the popular narrative, financial institutions view fintechs as partners in innovation, not threats to their core business. By offering better, less expensive, and more innovative products, financial institutions can assert their continued relevance as customer-facing institutions with help from fintech partnerships.

This webinar will explore how partnerships between mainstream financial institutions (e.g., banks, insurers, and payment companies) and fintechs are addressing financial inclusion challenges and expanding access to the formal financial economy for underserved segments of the global population, particularly in emerging markets. It will share insights from a recent report from the Center for Financial Inclusion and the Institute of International Finance.

The report incorporates 24 in-depth interviews with people at the frontlines of this innovation and highlights 14 partnerships focused on financial inclusion that we think exemplify best-case scenarios and good practice.

Webinar: How Financial Institutions and Fintechs Are Partnering for Inclusion

Banks

Fintechs

Partnerships

Webinar

&gt; Posted by Jason Loughnane, Special Projects Manager, DAWN

In 2011, a SIM card in Myanmar cost $1,500 and mobile phones were used by less than 5 percent of the population. Following the entry of two foreign mobile operators in 2011, the price of a SIM card dropped to $1.50. Today, over <a href="http://www.mmtimes.com/index.php/business/technology/21466-ministry-puts-mobile-penetration-at-90-percent.html">90 percent of the country’s population has a cell phone</a>, and over <a href="http://www.mizzima.com/business-domestic/myanmar’s-mobile-revolution">80 percent of those users have smartphones</a>. And yet, only <a href="http://map.uncdf.org/myanmar">6 percent of the population uses a formal financial institution</a>, making the country ripe for adoption of mobile financial services.

Since the mobile phone revolution began in 2012, there has been <a href="http://www.channelnewsasia.com/news/asiapacific/pocket-change-myanmar-banks-on-mobile-money/3144028.html">widespread excitement and significant hype</a> about the <a href="http://blogs.accion.org/features/5-themes-european-microfinance-week-2016/">potential</a> for mobile money to take hold in Myanmar, but it seems like 2017 may be the year the industry finally gains traction. The <a href="http://www.magentaglobalevents.com/8th-mobile-money-agent-banking-summit/">8th Annual Myanmar Mobile Money and Agent Banking Summit</a>, held in late February in Yangon, brought together industry experts to discuss the current status of the market and its potential to promote financial inclusion.
<h3>Mobile money in Myanmar</h3>
All three of Myanmar’s major telecommunications companies have applied for a license to offer mobile money services, but to date, the Central Bank has only approved one application, for <a href="https://www.wavemoney.com.mm/about-us/">Wave Money</a>, which is majority-owned by telecom operator Telenor. Wave Money currently allows customers to make person-to-person transfers (P2P) and buy airtime top-up for mobile phones.

Customers cash in and out of the mobile money system with one of Wave’s 5,500 agents, currently located in 61 percent of Myanmar’s townships nationwide. This <a href="http://blogs.accion.org/features/agency-banking-technology-gap-nigeria/">agent network</a> allows Wave to cover a lot of ground with very little infrastructure. Wave’s parent company, Telenor, has over 100,000 agents selling airtime scratch cards across the country, so Wave has enormous potential to scale up to more distribution points. Wave will soon begin offering bill payments and plans to offer international remittances later on. These functions are particularly important to advancing financial inclusion, as <a href="http://blogs.accion.org/features/myanmar-the-final-frontier/">microfinance institutions</a> will be able to use the bill payments channel to collect loan repayments.

Currently, Wave is only available to Telenor customers, who represent 38 percent of mobile users in the country. Wave’s strategy is to provide a universal platform for microfinance institutions and formal financial institutions to offer services to those underserved by the current financial system. To that end, Wave plans to make its mobile money service available to customers of the other two mobile operators in Myanmar by July 2017.

Their competitors will put up a fight, however. Myanmar’s largest telecom, the formerly state-backed Myanmar Post &amp; Telecom (MPT), aims to launch MPT Mobile Money by April of this year. MPT has more subscribers than Telenor – almost half of all mobile customers in Myanmar. As a formerly government-owned company, they are strategically positioned to corner the market for government salary payments and government-to-person (G2P) transfers. Ooredoo, Myanmar’s third telecom provider, also plans to launch mobile money services, initially targeting their own SIM card users.
<h3>What does this mean for financial inclusion?</h3>
Mobile money is key to bringing affordable financial services to those unserved by traditional financial institutions. In the context of Myanmar, the near-ubiquity of mobile and smartphones creates the potential for mobile money to <a href="http://partners.wsj.com/metlife/multipliers/articles/enabling-new-business/">reach underserved populations</a> that are particularly difficult to serve through other means, such as rural clients and informal unregistered businesses, which are <a href="http://blogs.accion.org/features/understanding-financial-inclusion-gender-gap/">primarily run by women</a>. Using mobile money to deliver loans and collect repayments significantly expands the coverage radius and number of people that a single branch can serve, as loan officers do not need to visit each client as frequently if they do not need to collect loan repayments in person.

<img class="aligncenter wp-image-23139" style="border: 0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2017/03/myanmar-2.jpg" width="615" height="410" />Hal Bosher, CEO of Yoma Bank, Myanmar’s fifth-largest commercial bank and a shareholder of Wave Money, explained the time and money that is wasted managing the physical cash at each branch. He described how each branch has at least a dozen individuals counting bundles of cash using electronic counting machines, tying the bundles together, and packaging them into pallets for customers making large withdrawals. A similar process is required for companies to pay suppliers for large shipments or deliveries. Digital transfers would drastically improve efficiency both for customers and for bank staff. Mr. Bosher posited that while the traditional evolution of money acceptance has been from cash to card, then from card to digital, Myanmar is well positioned to <a href="http://blogs.accion.org/features/fintech-in-myanmar-leapfrogging-to-mobile-money/">leapfrog the credit/debit card phase and go directly from cash to digital</a>.

Mobile money transfers also provide an opportunity to use the data they generate to drive further financial inclusion, by creating alternative credit scores and using that scoring to offer nano-loans through mobile phones. Fintech companies like Konfío, Destácame, and Shubham are already doing this in other countries.
<h3>The future of mobile money in Myanmar</h3>
Wave Money’s CEO Brad Jones emphasized the importance of following the <a href="http://www.gsma.com/mobilefordevelopment/programmes/mobile-money/policy-and-regulation/code-of-conduct">GSMA Code of Conduct for Mobile Money Providers</a>. Following repeated bank failures and demonetizations in the past, there remains widespread mistrust of formal financial institutions in Myanmar. Mobile money providers have an opportunity to provide useful services to the country’s financially underserved population, but the industry must collectively work to maintain the reputation of the entire sector in its nascent stages, or customers will not trust any single provider.

Jacques Voogt, the current CEO of <a href="http://www.ooredoo.com.mm/">Ooredoo’s</a> mobile money service, is also the former head of mobile money giant M-Pesa’s Tanzania operations. Mr. Voogt sees many parallels between Myanmar and Tanzania’s ecosystems for mobile banking adoption, including similarities in total population (51 vs. 55 million, respectively), percentage of financially underserved population (80 percent vs. 90 percent), number of bank branches countrywide (about 1,500 in Myanmar, about 2,000 in Tanzania), and urban/rural split (30 percent/70 percent in both countries). Mr. Voogt noted that in Tanzania, the mobile money ecosystem took about four years to fully develop – including merchant acceptance, agent saturation, and customer adoption. Myanmar is just entering year one of this promising process.

Image credits: John Rae for Accion

Have you read?

<a href="https://cfi-blog.org/2015/02/18/myanmars-first-ecommerce-platform-supports-the-transition-from-cash-to-electronic/">Myanmar's First eCommerce Platform Supports the Transition from Cash to Electronic</a>

<a href="https://cfi-blog.org/2014/05/22/fostering-responsible-finance-in-myanmars-infant-industry/" target="_blank" rel="noopener">Fostering Responsible Finance in Myanmar’s Infant Industry</a>

<a href="https://cfi-blog.org/2017/02/07/modelo-peru-whats-next-for-the-groundbreaking-mobile-money-platform/">Modelo Peru: What's Next for the Groundbreaking Mobile Money Platform?</a>

Mobile Money in Myanmar: Going Directly from Cash to Digital

Myanmar

Agent Banking

Financial Service Providers

&gt; Posted by Habitat for Humanity International

Microfinance in Cambodia has seen tremendous growth throughout the past two decades. The first microfinance institutions were initially established by relief organizations to provide cash transfers to poor families, to build incomes and reduce poverty. Fast forward to 2015, and the financial landscape is thriving with over 45 regulated microfinance institutions (MFIs) operating in the country. Improved financial access is contributing to 7.3 percent GDP growth and reducing poverty rates for those living under $2 per day.

Despite impressive economic growth, housing quality for many Cambodians remains below standards. A <a href="http://www.stat.go.jp/info/meetings/cambodia/pdf/c13ana09.pdf">2014 study</a> conducted by the Ministry of Planning in Cambodia revealed that nearly 27 percent of homes in rural areas still use temporary materials for walls and roughly 83 percent have temporary floors.

As migration brings more people to urban and peri-urban areas, and as a young population seeks to build new housing, there is a growing need for financial products that match the term and usage that housing requires. Recently, housing microfinance (usually characterized by larger loan amounts and longer terms than traditional microfinance) has gained traction in Cambodia as a funding source for home construction and home improvements for low income families.

In 2011 MFIs started to look seriously into housing microfinance as a separate product line – previously the common practice was for some MFIs to offer housing as part of a personal use or general purpose loan.

In 2012, the MicroBuild Fund, an investment vehicle initiated by Habitat for Humanity International with support from Omidyar Network and managed by Triple Jump, entered into Cambodia. This funding focused on MFIs with scalable housing portfolios, based on the hypothesis that to catalyze the growth of home improvement loan products, funds would be required that matched the longer loan terms paired with advisory services to build MFI capacity. MicroBuild has invested USD 39 million in 27 MFIs in 18 countries around the globe, bundled with USD 2 million worth of technical assistance. These investments have assisted partner financial institutions to maintain housing microfinance portfolios worth USD 238 million spread among 136,000 active clients.

Today MFIs offering individual home improvement loan products in Cambodia include <a href="http://www.lolc.com.kh/eng/improvement.aspx">LOLC (formerly TPC)</a>, <a href="http://www.firstfinance.biz/products-services/">First Finance</a>, <a href="http://www.hkl.com.kh/index.php?page=loan">Hattha Kaksekar Limited</a>, and <a href="http://www.amret.com.kh/amret/index.php/en/products-and-services/cp">Amret</a>, among others.

The progress of housing microfinance in Cambodia is well-aligned with global trends. A recent survey conducted by Habitat for Humanity’s Center for Innovation in Shelter and Finance (CISF) revealed that 73 percent of MFIs worldwide enter into housing microfinance to diversify their portfolios and to respond to client demand, keeping customers satisfied and loyal with appropriate products and services. In an increasingly competitive MFI sector, MFIs recognize that offering housing products with lending terms matched to use of the loan can assist with client satisfaction and loyalty, as well as reduce the risk of the loan.

MFIs seem to not be stopping there. Promising trends reveal innovations ranging from water, sanitation, solar installation, home improvement, repairs and extensions, as well as micro-mortgage products.

Additionally, innovation is being initiated in service delivery. For example, LOLC has embedded an engineer in their head office in order to initiate technical tie-ups with suppliers of solar panels, to improve the quality of improvements and service delivery. These MFIs are not just making housing loans available to clients, but doing so in a way that improves home quality in a country without a formal building code or training minimums in the construction sector.

Still there is a tremendous amount to learn and key questions to answer. First, housing microfinance provides a small sliver of the capital required to create a thriving housing finance environment. Two key questions remain. First, what other types of support to the sector are required to incentivize lenders to increase the availability of housing finance products, notably micro-mortgages? Second, in the face of increasing risks for disasters such as floods, how can investors help to ensure that disaster resilience in housing is addressed?

Ultimately, housing provides an opportunity for MFIs, housing finance companies, and commercial banks and developers alike to respond to the housing demand with new and unique product offerings including housing microfinance, relocation housing, micro-mortgages, and rental housing. Additional investors will be needed to provide capital and fuel the growth, and we hope other investors will join MicroBuild in providing capital and support in this burgeoning sector.

Habitat has supported an estimated 2 million individuals in the Asia-Pacific region, where it has been active since 1983. For more on Habitat's Center for Innovation in Shelter and Finance, <a href="http://www.habitat.org/housing-markets/shelter-finance/publications/articles">click here</a>, and on Habitat’s other work and guiding vision, <a href="http://www.habitat.org/how">click here</a>. 

Have You Read?

<a href="http://cfi-blog.org/2014/07/17/housing-finance-models-in-latin-america-and-the-caribbean/">Housing Finance Models in Latin America and the Caribbean</a>

<a href="http://cfi-blog.org/2013/09/03/microfinance-to-mitigate-substandard-housing/">Microfinance to mitigate Substandard Housing</a>

<a href="http://cfi-blog.org/2013/02/15/microfinance-for-housing-in-africas-cities/">Microfinance for Housing in Africa's Cities</a>

Getting to Scale with Housing Finance Innovation in Cambodia

Cambodia

Credit

Housing Finance

Microfinance Institutions

&gt; Posted by Leora Klapper, Lead Economist, Development Research Group, the World Bank

[youtube https://www.youtube.com/watch?v=Oy9N-6IBaUA&amp;w=560&amp;h=315]

Eroll Asuncion runs a grocery store on the remote Philippine island of Rapu-Rapu. It’s a three-hour boat ride to the nearest bank. Fortunately, that’s no longer a problem – thanks to the mobile phone revolution and new regulations that make it easier for people to open and use an account.

Eroll’s customers now pay bills and send and receive remittances through a mobile money account they access via mobile phones. Eroll’s SuperStore has become something of a bank for islanders using these mobile accounts, allowing them to send and receive cash at the store.

“My husband sends (me) money twice a month, on the 15th and 30th,” Yolanda, a customer, explains.

Hundreds of millions of others like Yolanda are opening new accounts through their phone or at a bank or similar institution. It’s part of a financial revolution that’s sweeping the developing world. Since 2011, 245 million more people in East Asia and the Pacific have become part of the formal financial system by opening an account.

The World Bank has just released our much-anticipated second edition of the <a href="http://www.worldbank.org/globalfindex">Global Findex</a>, the world’s only comprehensive gauge of global progress on “financial inclusion”—how people save, borrow, make payments, and manage risk. The data give us insight into account ownership around the world, and how people are using – or not using – those accounts.

The Global Findex offers good news. As of 2014, 62 percent of adults around the world had access to a bank account. Put another way, the number of people who are “unbanked” has tumbled to 2.0 billion from 2.5 billion in 2011, when the Global Findex was first released.

The Global Findex offers insights into how we can continue this progress by giving more people access to financial services.

The private sector and governments can play a huge role. Some 400 million people, or 20 percent of the unbanked, currently receive wages as well as government transfers such as social benefits in cash.

During our research for the Global Findex, we visited a factory in Bangladesh that paid wages by pulling a giant, cash-filled truck up to the factory and distributing the cash to  workers. If wages from private companies were delivered electronically through an account, 280 million more people would have automatic access to accounts.

Similarly, 160 million people would gain a bank account if all government transfers now paid in cash were moved to electronic payments.

Other opportunities abound. Currently, about 270 million adults send and receive money in cash. An additional 100 million send money via over-the-counter transactions such as through Western Union.

Creating products that facilitate transfers between individuals without the insecurity of cash would connect these people to the formal financial system. Such electronic payments would be especially valuable in Sub-Saharan Africa, where 22 percent of people send or receive funds to family or friends living within the country (what we call "domestic remittances") in cash. Another 12 percent send or receive funds over-the-counter using a money transfer operator like Western Union—which must be withdrawn as cash and held in some other way. Sending domestic remittances through an account offers recipients a safe place to store money for day-to-day purchase or save for longer-term goals.

Of course, just providing access to accounts will not spur everyone to send and receive money through them. Financial service providers must respond to consumer needs. In developing economies, 355 million people with an account continue to send and receive domestic remittances through cash or over-the-counter transactions – even though many of them could use their accounts for this purpose. Existing accounts can be adjusted to lower the cost and increase the convenience of sending and receiving money.

In low- and middle-income economies, more than 1.3 billion account holders continue to pay their utility bills in cash, and more than 500 million account holders pay their children’s school fees in cash. Moving these payments to accounts would both increase convenience for customers and increase account use.

The data point to great opportunities for the financial inclusion community to increase both access and use of financial services. With these steps, the world can significantly accelerate progress toward financial inclusion.

Leora Klapper is a Lead Economist in the Finance and Private Sector Research Team of the Development Research Group at the World Bank. The Global Findex was developed by the Finance and Private Sector Development Team of the Development Research Group at the World Bank, collected by Gallup World Poll, and funded by the Bill and Melinda Gates Foundation.

Have you read?

<a href="http://cfi-blog.org/2015/04/22/financial-inclusion-by-2020-it-depends/">Financial Inclusion by 2020? It Depends</a>

<a href="http://cfi-blog.org/2012/11/16/measuring-financial-inclusion-the-basic-set-solution/">Measuring Financial Inclusion: The 'Basic Set' Solution</a>

<a href="http://cfi-blog.org/2012/12/14/announcing-the-launch-of-the-global-financial-inclusion-global-findex-microdata/">Announcing the Launch of the Global Financial Inclusion (Global Findex) Microdata</a>

Global Findex Offers Next Steps for How to Give People Bank Accounts

Financial Inclusion 2020

Bangladesh

&gt; Posted by Center Staff

[getty src="147841446?et=Jz4i3fnpQvF723j1U48uOw&amp;sig=eCBUiUPsclpVeD9eZnihx2pHyvuBBjoMYH26U0rZPk4=&amp;caption=true" width="594" height="407"]

In over 100 countries around the world, central banks, stock markets, finance providers, NGOs, and others are coming together en masse this week and next to target the financial inclusion of one of the most underserved client segments: children and youth. <a href="http://globalmoneyweek.org/">Global Money Week</a> (GMW), now in its fourth year, is an ambitious movement to raise awareness on the importance of youth inclusion and to empower our rising generation. Indeed, around the world only <a href="http://newsroom.mastercard.com/press-releases/new-resource-available-to-help-banks-create-products-for-children-and-youth/">38 percent</a> of youth (ages 15-25) have some sort of account at a formal financial institution.

The theme of this year’s GMW is “Save today. Safe tomorrow.” Globally, savings rates among young people are dismally low. In high income countries, 42 percent of youth save in formal institutions. The next highest regions are East Asia and Pacific and sub-Saharan Africa, where youth savings rates are <a href="http://www.centerforfinancialinclusion.org/fi2020/mapping-the-invisible-market/data-explorer">19 and 9 percent</a>, respectively. Why is this the case? On the consumer side, when asked, youth <a href="http://documents.worldbank.org/curated/en/2013/10/18477405/global-findex-database-financial-inclusion-youth">most often cite</a> the same reasons adults most often cite: a lack of money and high account fees.

In effect until March 17, Global Money Week kicked off on Monday at the New Zealand Stock Exchange with a symbolic ringing of the day’s opening bell by school children. The event was organized by the stock exchange operator and the country’s commission for financial capability, and included a conference for the kids to discuss the importance of starting to save when they’re young. The participating students were from a cluster of schools taking part in financial literacy programs facilitated by a nonprofit organization, <a href="https://www.sorted.org.nz/sorted-schools">Sorted</a>, that works to make children and youth “financially fluent.” Over 25 stock exchanges around the world will participate in this year’s GMW, with bell-ringing, financial education workshops, dialogues, and guided tours.

Running the gambit, along with the festivities at stock exchanges, GMW 2015 activities include a talk with area teenagers on effectively using financial tools from the Albanian Association of Banks, a media session on youth microfinance services for the Assay Public School in Ethiopia by Nisir Microfinance, and, from the country’s Habitat Center for Development and Governance, drama workshops on financial literacy at eight schools in Turkey. To peruse the GMW’s comprehensive list of events, <a href="http://globalmoneyweek.org/Information/2015-calendar.html">click here</a>.

GMW prides itself on incorporating child and youth participation whenever possible - in both the design and realization of events. All told, it’s estimated that over 3 million kids will participate in GMW this year. GMW events also target others involved in youth inclusion. For example, this week in Colombia, Banca de la Oportunitas offered a training session for teachers and facilitators on approaching financial education instruction in the classroom.

Global Money Week is led by Child &amp; Youth Finance International (<a href="http://www.childfinanceinternational.org/">CYFI</a>), a global network working towards financial inclusion and economic empowerment of children and youth.

To get involved, visit the Global Money Week <a href="http://globalmoneyweek.org/">website</a> where you can find a number of resources like a toolkit to help you organize events in your community and print packs which include downloadable GMW-branded collateral. To take part in the movement on social media, use the hashtag #GMW2015.

Have you read?

<a href="http://cfi-blog.org/2014/10/17/credit-suisse-sponsored-event-focuses-on-financial-capability-and-the-policy-and-business-case-for-youth-financial-inclusion/">Credit Suisse-Sponsored Event Focuses on Financial Capability and the Policy and Business Case for Youth Financial Inclusion</a>

<a href="http://cfi-blog.org/2013/11/18/riding-financial-inclusion-disruption-are-youth-savers-the-surfers-or-the-wave/">Riding Financial Inclusion Disruption: Are Youth Savers the Surfers or the Wave?</a>

<a href="http://cfi-blog.org/2013/06/28/extending-protection-to-youth-clients/">Extending Protection to Youth Clients</a>

The Global Movement to Bank One of the World’s Most Underserved Segments

Ethiopia

New Zealand

Youth

Australia

Brunei Darussalam

China’s economy has experienced tremendous growth in recent years, with a booming micro, small, and medium enterprise (MSME) market. There are over 50 million MSMEs in China that collectively account for over 60% of China’s GDP and over 50% of the government’s tax income. These businesses create 80% of total employment in China’s urban areas.

Despite China’s overall economic growth, the need to foster full financial inclusion is still imperative. In 2010, 38 million MSMEs lacked access to formal financial services, forcing them to borrow informally from friends, family, and moneylenders.

China

Indonesia

Japan

Korea, Dem. People's Rep.

Korea, Rep.

Lao PDR

Malaysia

Mongolia

Papua New Guinea

Solomon Islands

Taiwan, China

Thailand

Timor-Leste

Vietnam

Allyse McGrath

Ana Maria Aviles

Dennis Ferenzy

Leora Klapper

Paul  Nelson

Sonja Kelly

Susy Cheston

Veronica  Trujillo

Persons With Disabilities

Underserved Groups

Most of Mexico’s people lack access to a formal bank account. Accion has worked in Mexico for decades to create a thriving and competitive financial sector that embraces innovation and protects its clients.

&gt; Posted by Nika Tumao, Analyst at Global Treasury, Credit Suisse

This post is the third of a three-part series from <a href="http://www.centerforfinancialinclusion.org/collaborators-a-funders/virtual-volunteers">Credit Suisse Virtual Volunteers</a>, sharing reflections and insights from their investigations into the state of financial inclusion for persons with disabilities (PWDs) across several country contexts. The three posts will examine past efforts and offer potential solutions for creating more inclusive societies in Ecuador, India, and the Philippines. 

If we built a microfinance institution (MFI) focused solely on persons with disabilities (PWDs), what would it need to do to be successful? I examined disability inclusion in the Philippines to find out.

Laws in the Philippines support access by persons with disabilities (PWDs) to many of the elements necessary to succeed in life, including employment, education, infrastructure, and rights in court. Although these laws are well intentioned, the Philippines lack the government budget to create and staff regulatory agencies that make sure they are effectively implemented. Here is where self-help groups, NGOs and MFIs have room to address the unmet needs of PWDs.

In looking into the financial products available to PWDs, I discovered that MFIs in the Philippines market their products to the poor, but they don’t target them to the needs specific to PWDs nor do they offer multiple products exclusively for PWDs, reflecting the diversity of disabilities and needs. It would seem that MFIs view PWDs as a subset of the poor: they wouldn’t explicitly reject a PWD loan application but neither would it specifically market its products to PWD.

From my research, I found that the organizational model that best serves PWD’s financial needs is often a cross partnerships between MFIs and NGOs. Such a partnership is exhibited between <a href="http://lcdphilippinesfoundation.org/">Leonard Cheshire</a>, a disability-focused NGO in the Philippines, and an MFI called <a href="http://aloe.socioeco.org/article843_en.html">Alalay sa Kaunlaran Foundation Inc (ASKI)</a>. The partnership provides group lending programs to PWDs or their family members, and has reached 1,044 borrowers to date. One client family, Lisa and her husband Luoloi, sought assistance after Luoloi became disabled from gunshot wounds. The couple borrowed money from Leonard Cheshire and ASKI to set up a small snack store, and as a result, they’re in a financial position to better support their children’s education and even put some extra money into savings.

<a href="http://www.twh.org.ph/">Tahanang Walang Hagdanan</a>, an NGO whose name translates to “Home without a Staircase,” resembles this NGO-MFI pairing within a single organization.  Established in 1973, Tahanang Walang Hagdanan originally began as an NGO for PWDs, and later innovated its services to include microfinance. The organization works to improve the lives of PWDs through education, training, medical assistance and livelihood. It operates as a business and workshop center, providing livelihood opportunities, while also addressing shelter and health needs.  The business and workshop center provide the capital, materials, and machinery to make a multitude of products, like wheelchairs, bags, candles, educational toys, and furniture. I love the “all-in-one” concept of this organization: PWDs are provided with welfare services, education and microfinance.

What I learned from both examples is that while we can try to make MFIs more PWD focused, we can also turn the tables and make NGOs that serve PWDs more microfinance focused. We can leverage existing organizations that have the network of PWDs and help them provide microfinance products. It’s all about building partnerships between established groups and MFIs. Each group can contribute its own expertise.

Disability insurance is another relevant product, because people can acquire a disability at any time, as in the case of Lisa and Luoloi. The <a href="http://cardbankph.com/wp_cardbankph/home.php">Center for Agriculture and Rural Development (CARD)</a> MFI offers microinsurance through a simple mutual fund called the Members Mutual Fund, which covers the death costs of family members. The fund builds on the rural Filipino custom of “damayan” in which community and relatives contribute cash to the family of a person who just passed away. In turn, the supported family is expected to contribute cash to other families in the future. The fund has been well received, and has expanded to providing disability insurance. The Members Mutual Fund highlights the power that comes from MFIs’ modeling financial products, for PWDs or otherwise, after local customs.

Though it’s important to acknowledge their merits, these examples of existing financial products illustrate the opportunity to expand financial services for PWDs. For example, MFIs could partner with providers of wheelchairs to finance their purchase through loans or leasing. An increase in accessibility from acquiring a wheelchair could very well result in new opportunities for employment and productivity and ease the burden of paying back a loan.

As promising as any existing or hypothetical financial product for PWDs might be, they create no impact if clients don’t know about them.  Arguably, this component of communication is the biggest missing link currently impeding PWDs achieving full financial inclusion. In the Philippines’ current environment MFIs appear to be disappointingly ineffective at reaching PWDs, and few PWDs appear to aware of microfinance options. Support from government and NGOs could very well help to bridge this connection.

One instance of marketing and communications success, however, is between the <a href="http://www.pcfc.ph/">People’s Credit and Finance Corporation (PCFC)</a> and the <a href="http://en.wikipedia.org/wiki/Philippine_Federation_of_the_Deaf">Philippine Federation for the Deaf (PFD)</a>. At one event, using sign language, the corporate communications director of PCFC explained its products and services available to microentrepreneurs. After the presentation, there was an open forum in sign language, giving the PFD members the ability to raise questions. The credit counseling opened the PFD’s eyes to opportunities they did not know existed. This demonstrates how important communication is to reaching PWDs. It takes a conscious and deliberate effort to reach PWDs in a manner that enables understanding.

Finding out more about the specific needs of PWD opened my eyes to challenges of providing microfinance to PWD but it also opened my eyes to the many ways we can help PWD live free and productive lives.  To answer my initial question on how to make a successful MFI focused on PWD, we need two things: communication and caring products. We need better coordination between PWD groups, self-help organizations, the government, and MFIs.  We also need products tailored to PWD needs and to local customs. There are good models, but as long as we see underserved PWDs, we can do more.

Have you read?
<a href="http://cfi-blog.org/2012/09/07/accessibility-for-persons-with-disabilities-in-india/">Accessibility for Persons with Disabilities in India</a>
<a href="http://cfi-blog.org/2012/09/06/extending-financial-inclusion-to-persons-with-disabilities-in-ecuador/">Extending Financial Inclusion to Persons with Disabilities in Ecuador</a>
<a href="http://cfi-blog.org/2012/02/01/smart-note-hiring-staff-with-disabilities-at-accessbank-azerbaijan/">Smart Note: Hiring Staff with Disabilities at AccessBank Azerbaijan</a>

Serving Persons with Disabilities in the Philippines

Credit Suisse

East Asia and Pacific

Filter

Filter

Advancing Digital Financial Inclusion in ASEAN

Beyond Prototypes: Donor Insights on Regtech for Inclusive Finance

New Global Findex: 69 Percent of Global Population Is Banked

Inclusive Insurance: Closing the Protection Gap for Emerging Customers

Inclusive Insurance: Closing the Protection Gap for Emerging Customers

Webinar: How Financial Institutions and Fintechs Are Partnering for Inclusion

Mobile Money in Myanmar: Going Directly from Cash to Digital

Getting to Scale with Housing Finance Innovation in Cambodia

Global Findex Offers Next Steps for How to Give People Bank Accounts

The Global Movement to Bank One of the World’s Most Underserved Segments

Serving Persons with Disabilities in the Philippines