This was the question that a team of us at The Fletcher School at Tufts University set out to answer in our study “<a href="http://fletcher.tufts.edu/Institute-for-Human-Security/Research/Migration-Crisis-and-State-Fragility/Financial-Mobility-of-Refugees">The Financial Journey of Refugees</a>.” We studied the routes and financial challenges of more than 100 refugees in Greece, Jordan and Turkey, between July 2016 and April 2017. The refugees we interviewed had traveled from South Asia, Central Asia, the Middle East, East Africa and West Africa.

Regardless of their country of origin, with the exception of Syria, a refugee’s biggest expense was the cost of hiring a smuggler. Smuggling expenses ran about 85 percent of the total cost of the journey. The smuggler’s fee included important services: travel by air or overland, depending on the refugee’s budget, guide services across borders, payment of bribes at border crossings, and documentation falsification expenses. Smuggling prices varied widely by country of origin (some borders being porous, others sealed tight), by how deluxe a trip was (air versus ground), by numbers of borders crossed (affecting the number of falsified IDs required). To give an example, journeying overland from Afghanistan through Pakistan, Iran, and Turkey to Greece might cost $7,500 per person, a price that went up or down based on shifting rules and border crackdowns. Traveling from Eritrea to Greece might cost the same amount. Traveling from Syria to Turkey could cost as little as $500.

The price of the journey was one factor in a traveler’s safety – the higher the cost, the better the traveling modes, and the safer the travel. While <em>what</em> refugees paid their smuggler was important, <em>how</em> they paid them was equally important. Did the refugee pre-pay the kingpin smuggler in advance of the journey? Did she post-pay him after arriving safely in Greece or Germany? Did she pay leg by leg? All these strategies were in play and we outline them in our <a href="http://fletcher.tufts.edu/~/media/Fletcher/Microsites/Human%20Security/Final%20Journeys_Briefing%20Paper.pdf">report summary</a> and they are detailed by the refugees themselves in a <a href="http://fletcher.tufts.edu/~/media/Fletcher/Microsites/Human%20Security/Compendium%20Financial%20Journeys%20%20Publication.pdf">Compendium of Field Notes</a>. Below we describe two of many strategies.
<h3><strong>Strategy 1: Guarantee Scheme via a Financial Third Party</strong></h3>
Money agent networks, often informal, span from Pakistan to Germany, and around the world. These networks—dubbed Eastern Union by a Jordanian regulator—do far more than transfer funds from person A to person B. They will store funds for later disbursement or, if instructed, will shunt funds directly to smugglers. For example, a journeyer traveling overland from Kabul to Athens might visit a money agent in Kabul (a saraf) who will take her deposit for $7,500. When she arrives safely to her first waypoint, which could be in Zahedan, Iran, she texts a code to her saraf. The code, incidentally, would have been randomly generated by the saraf’s app before her departure and she would have memorized it. By sending the code, the refugee signals her safe arrival at the Zahedan waypoint. The saraf then forwards a predetermined sum to the kingpin smuggler, using a network of couriers and other money agents to get him his funds. The kingpin in turn deploys a combination of banks and money agents to make sure his local smugglers get paid.

There is no single way this system of guarantee works. It is customized, improvised upon, and individually negotiated by various actors. In some instances, there is no code. In others, there are several codes. In some instances, the kingpin smuggler chooses the saraf. In others, the refugee chooses the saraf. In Syria, the third party is often a shopkeeper who charges $50 to insure the journey. In Iran, the money agent charges a percentage (often 10 percent) of transactions.
<h3><strong>Strategy 2: Crowdsourcing via Kin</strong></h3>
Typically, crowdsourcing via kin is a pre-payment strategy, but not always. We interviewed refugees who were held hostage by smugglers at various points along their routes. When relatives—sometimes a circle of relatives both forward and backward along the route—paid up, the hostage refugee was released to be smuggled farther along her route.

Often crowdsourcing came in the form of pre-payments along various points in a route. For example, traveling from Eritrea to Greece, a journeyer might signal a relative in Khartoum to fund trip expenses. The relative in Khartoum would crowdsource funds from family members in multiple countries across Europe and North America. She might use Zain, a mobile money system, to collect the funds and hold them in Khartoum. She would then secure a smuggling network to help the Eritrean refugee cross to Sudan. The kingpin smuggler would be paid via a courier upon the refugee’s safe arrival in Khartoum. If the Eritrean refugee wanted to continue north to Turkey, Greece or Northern Europe, another round of crowdsourcing would begin. Again, the relative would make payment to the smuggler after the refugee’s safe arrival. In some cases, to ensure compensation, the smuggler will stay with the refugee in a safe house until he has received his payment via Western Union or an informal money agent.

Said one refugee: “It’s a collective system. All Eritreans understand each other on this.” The understanding is that she does not have to pay her relatives back, but she is expected to pay her debt forward: when someone else in her network tries to escape Eritrea, she is expected to do her part to financially support his or her expenses.

What do these strategies mean for providers of financial services? Clearly suppliers cannot legally, knowingly pay smugglers. But, perhaps there are other forms of financial assistance that are perfectly legal.

First, licit travel is often part of a route and could be better insured. For example, a refugee may be able to obtain a visa to a transit country and would like to secure legal travel there. But, because prior legs of the journey may be cobbled together through smugglers, the refugee cannot predict when they will reach the transit country. Insurance could help offset this uncertainty. Too often providers are skeptical that people need financial education to understand sophisticated insurance products. As long as the systems are familiar and offer value, refugees both literate and illiterate, will master them quickly. Second, providers believe that people don’t like to save, but, we found that saving for a purpose—journey preparation—is valuable. Surely, there are many legal ways to assist refugees to accumulate savings for journey purposes. And just as surely, clever suppliers could find ways for refugees to easily access those licit savings along their journey. Third, the ubiquity of informal agents could lead to service expansion. Can trusted informal money agents be co-opted and certified within a legal framework in much the same way that Uber has recruited its drivers?

<strong>Have you read?</strong>

<a href="https://cfi-blog.org/2017/03/09/the-digital-demands-of-the-displaced-dont-track-me-dont-expose-me-dont-cut-me-off/">The Digital Demands of the Displaced: Don't Track Me, Don't Expose Me, Don't Cut Me Off</a>

<a href="https://cfi-blog.org/2016/02/09/financial-inclusion-and-immigration-in-europe-disrupting-identity-norms/">Financial Inclusion and Immigration in Europe – Disrupting Identity Norms</a>

<a href="https://cfi-blog.org/2016/08/17/a-learners-license-to-master-the-rules-of-the-credit-road/">A Learner's License, To Master the Rules of the Credit Road</a>

Migration’s Middlemen and How to Pay Them

<em><a href="https://www.gsma.com/mobilefordevelopment/resources/state-of-the-industry-2014/"><img class="alignright wp-image-17531" style="border: 1px solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2015/03/gsma.png" alt="" width="342" height="481" /></a>Coinciding with this week’s Mobile World Congress in Barcelona, GSMA’s Mobile Money for the Unbanked (MMU) program released its fourth annual ‘State of the Industry Report on Mobile Financial Services.’ CFI spoke with Jennifer Frydrych, Insights Coordinator for the MMU program and one of the authors on the report, about the project’s findings.
</em>
<h3><strong>The mobile money industry has grown rapidly in recent years. Can you bring us up to date with some of the growth figures and dynamics?</strong></h3>
In the past five years, mobile money services have spread across much of Africa, Asia, Latin America, and the Middle East. At the end of 2014, there were 255 live mobile money services across 89 markets, 36 more than in 2013. Mobile money is now available in 61 percent of developing markets globally. In terms of adoption and usage growth, 75 million additional mobile money accounts were opened globally in 2014, bringing the total number of registered accounts to 299 million. Importantly, account activity increased faster than account registration in 2014, and the total number of active mobile money accounts is now 103 million (up from 73 million in 2013). An increasing number of services are reaching scale: 21 services now have more than one million active accounts.
<h3><strong>As of the last State of the Industry report, half of all live mobile money deployments were in sub-Saharan Africa. How has this distribution changed? What were some new or emerging markets of the past year?</strong></h3>
There were 22 new services launches in 2014, of which half occurred in sub-Saharan Africa. The mobile money industry in sub-Saharan Africa continues to grow, and the region still accounts for just over half of all live services globally, and 60 percent of all active accounts. Much of this success can be attributed to East Africa; however we are now seeing exciting growth in mobile money uptake and active usage in West Africa.

In 2014 mobile money was rolled out for the first time in six new markets– Dominican Republic, Myanmar, Panama, Romania, Sudan, and Timor-Leste.
<h3><strong>Historically, airtime top-ups have dominated the mobile money payments mix, followed distantly by domestic P2P transfers. Can you give us a snapshot of the current payment product space and a sense for how this is changing?</strong></h3>
In the month of December 2014, mobile money users transacted a total of 717.2 million times, totaling a value of US$16.3 billion. Domestic P2P transfers and airtime top-ups continue to dominate the global product mix in terms of volume and value, but the fastest growth in 2014 occurred in bulk disbursements, and bill and merchant payments. This reflects an expanding ecosystem of institutional and business users of mobile money. Equally, there was a steep increase in the number of international remittance transactions in 2014, largely driven by the exciting new model of using mobile money as both the sending and receiving channel.
<h3><strong>It’s still early days for mobile credit, savings, and insurance products. What were some of the success stories of 2014?</strong></h3>
As of June 2014, 17 million mobile insurance policies had been issued, representing an annualised growth rate of 263 percent. Life insurance cover remains the most popular mobile insurance offering; however, we see growth in the number of health, accident, and agricultural insurance policies being issued. New commercial and partnership models have helped mobile insurance providers achieve scale. A number of MNOs have partnered with specialist solution providers to develop tailored insurance products for the low-income market segment. In addition, many providers have reassessed their commercial models, and have in many cases employed loyalty and “freemium” models to encourage customer uptake.

When it comes to mobile savings, one interesting innovation in 2014 was <a href="http://www.gsma.com/mobilefordevelopment/financial-inclusion-in-tanzania-tigo-rewards-its-mobile-money-customers">an initiative of Tigo Tanzania</a> which began to return interest generated on the trust account to its users. In September 2014 Tigo Tanzania disbursed US$8.7 million to 3.5 million users, followed by a second disbursement of US$1.8 million in November. Tigo plans to make payments to users quarterly.

2014 also saw a 50 percent increase in the number of mobile credit services. This was fueled in part by new partnerships between MNOs and banks to provide mass-market short-term loans, and by microfinance institutions and start-ups targeting specific segments of the underserved. New credit scoring models using MNO data are also starting to result in lower numbers of non-performing loans compared to traditional lending.
<h3><strong>A mobile money service’s success is contingent upon a plethora of factors, including agents, merchants, competition, interoperability, regulation, and client awareness. What are the main hurdles we’re witnessing today?</strong></h3>
Lack of investment in operations is one factor preventing the development and expansion of mobile money services. A recent MMU paper on mobile money profitability revealed the extent to which providers must invest heavily in operational and commercial infrastructure at the start of the life of the service in order to ensure operational excellence in areas such as customer awareness and distribution to begin the journey towards profitability.

Industry learning gaps still exist around how to reach and serve harder-to-reach customers, including rural communities and female clients.

In a number of markets regulatory hurdles still exist, which can slow the development of the mobile money industry and the benefits it can bring for financial inclusion. Today, regulation is enabling in 47 out of 89 markets where mobile money is available, according to the new report.
<h3><strong>What were the data sources used for this year’s State of the Industry report, and is it a challenge getting ample quality data to assess the industry to the extent desired?</strong></h3>
The report is based on data from GSMA Mobile Money Intelligence on planned and live mobile financial services. The data includes qualitative insights on these services, as well as quantitative information on numbers of users, distribution points, transaction volumes and values, and revenues. This data is updated regularly, primarily using the results from MMU’s annual Global Adoption Survey of Mobile Financial Services, which captured data from 127 respondents from 69 countries in 2014. In addition, for core metrics, MMU uses data modelling to estimate and forecast figures, making information available for the entire industry, rather than only for survey participants. The estimates help to provide a true representation of the scale of the industry both globally and at the market level. This data provides key industry stakeholders–such as regulators, senior executives in telecoms and banking sectors, and international development agencies–with an authoritative overview of the industry and its impact on the financial lives of unbanked and underbanked users.
<h3><strong>Last year’s reports paid special attention to women and mobile money, and mobile money in rural areas. Over the past year, what progress was made in these priority areas?</strong></h3>
Where data is available, it showed that penetration of mobile money services amongst women and within rural areas has increased. Much of this growth may be organic and due to the overall growth of the mobile money registered base, but MNOs that want to drive adoption in the mass market need to adapt their strategies and tactics specifically to tap into underserved segments. Regardless of the level of maturity of their service, there are fundamental indicators mobile money providers can use to improve the visibility of underserved segments, including the collection of demographic data to identify and track usage amongst women and rural customers.
<h3><strong>What’s next from GSMA that we can look forward to?</strong></h3>
Coming up the MMU team will publish a number of publications including:
<ul>
 	<li><strong>Case study on cross-border international remittances</strong>: insights into commercial implementation and user adoption from two early examples in West Africa.</li>
 	<li><strong>Case study on enabling mobile money policies in Paraguay</strong>: this publication will showcase the journey Paraguay has taken towards digital financial inclusion, in particular through the creation of a regulatory framework that enables the mobile money market to increase its outreach and efficiency.</li>
</ul>
<em>The full </em><em>‘State of the Industry Report on Mobile Financial Services’  is now available for</em> <em><a href="http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked/insights/industry-reports">download here</a></em>. <em>Over the next few weeks, some of the main findings from the report will be discussed</em> <em><a href="http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked/mmu-blog">on the MMU blog</a>. Stay tuned!</em>

<strong>Have you read?</strong>

<a href="http://cfi-blog.org/2014/07/28/mobile-money-sprinters-adapt-to-local-conditions-in-pakistan-somaliland-and-zimbabwe/" target="_blank" rel="noopener">'Mobile Money Sprinters' Adapt to Local Conditions in Pakistan, Somaliland, and Zimbabwe</a>

<a href="http://cfi-blog.org/2014/01/31/mobile-money-in-afghanistan-an-uphill-battle/" target="_blank" rel="noopener">Mobile Money in Afghanistan: An Uphill Battle</a>

<a href="http://cfi-blog.org/2014/04/18/unexpected-benefits-of-mobile-money/" target="_blank" rel="noopener">Beyond On-Ramps and Uptake: Exploring Surprising Benefits of Mobile Money</a>

The State of Mobile Financial Services: An Interview with GSMA’s Jennifer Frydrych

<em>&gt; Posted by Jeffrey Riecke, Communications Associate, CFI</em>

[getty src="142765195?et=R5H1wf3HRzVY85zP-SHj7A&amp;socialOnLoad=off&amp;sig=MCzrHiaz1fbKeXXBgrpdooZt9BGrF3EX8HvxLFGuv-s=" width="506" height="339"]

Islamic finance is expected to expand substantially in 2015, from 2014’s total of <a href="http://www.brecorder.com/money-a-banking/198/1138766/">$2.1 trillion to $2.5 trillion</a>, according to figures released last week by the Al-Huda Centre of Islamic Banking and Economics. In 2011, the industry had assets of about <a href="http://www.cgap.org/topics/islamic-products">$1 trillion</a>. Islamic microfinance, the segment of Sharia-compliant services targeting clients at the base of the pyramid, only occupies a small slice of the pie, at 1 percent of all Islamic finance globally. However this uptick in Sharia-compliant finance, as well as encouraging recent support for the 650 million Muslims living on less than 2 dollars a day, suggest a rising tide for Islamic microfinance.

The industry findings indicate that not only did Islamic finance surpass the $2 trillion landmark in 2014, it gained traction in nascent markets and entered new ones. Markets still green in offering Islamic finance that showed growth in 2014 include Morocco, Tunisia, Azerbaijan, Libya, and several non-Muslim-majority countries including Nigeria, Tanzania, and South Africa. Among the new markets where Islamic finance took root last year are Australia, Brazil, and China. Globally, there are 1,500 organizations working in Islamic finance across 90 countries – 40 percent of which are non-Muslim-majority countries. The expansion of Islamic finance opens the door for the many Muslims whose beliefs preclude them from accepting finance with interest rates and fee structures outlawed by Sharia doctrine.

Islamic microfinance, which has typically grown slower than its mainstream microfinance counterpart, could be in for a big year. In 2013, Islamic microfinance had an estimated <a href="http://cfi-blog.org/2013/04/26/sharia-and-savings-islamic-microfinance/">1.28 million clients</a>, about 82 percent of whom lived in three countries – Bangladesh, Indonesia, and Sudan. (Nevertheless, the number of Islamic microfinance clients in Muslim-majority Bangladesh is dwarfed by the 8 million conventional microfinance borrowers in the country.) Along with the Al-Huda estimation of 19 percent growth in 2015 for all Islamic finance, a report by TechNavio from November found that the Islamic microfinance market would grow at a compound annual growth rate of about <a href="http://www.prnewswire.com/news-releases/global-islamic-microfinance-market-2014-2018-281593461.html">20 percent</a> between 2014 and 2018. The current Microfinance Market Outlook forecasts <a href="http://www.microfinancegateway.org/library/microfinance-market-outlook-2015">15-20 percent</a> growth for 2015.

Strong government support, <a href="http://www.centerforfinancialinclusion.org/publications-a-resources/browse-publications/534-global-microscope">instrumental for financial inclusion efforts</a>, has been <a href="http://www.emirates247.com/business/economy-finance/islamic-banking-finance-set-to-reach-dh9-1trn-in-2015-2015-01-01-1.575128">demonstrated</a> for Islamic microfinance in countries including Yemen, Afghanistan, Sudan, Malaysia, and Pakistan. As part of its larger Financial Inclusion Program, the State Bank of Pakistan launched the partially U.K.-funded <a href="http://www.sbp.org.pk/AC&amp;MFD/events/FICF-Round-3-Guidelines.pdf">3<sup>rd</sup> Financial Innovation Challenge Fund</a>, which focuses on Islamic microfinance. Until the application deadline of February 20, 2015, the bank will accept proposals for grants to test solutions for delivering low cost Islamic microfinance services to more markets. One aim of the challenge is to develop Pakistan’s base of Islamic finance professionals.

GIZ, the German government’s international development agency, is <a href="http://www.reuters.com/article/2014/11/05/islam-microfinance-idUSL6N0SH04020141105">working with CGAP and others</a> to develop model regulations, education, and trainings to expand Islamic microfinance in developing countries. A current GIZ study is exploring demand factors, while another is comparing Islamic finance regulations in five countries. A study by GIZ and CGAP on Islamic microfinance aims to find ways to lower costs – a key obstacle for product adoption. Difficulties in adapting traditional microfinance products to Islamic microfinance have limited product offerings, with the <a href="http://www.cgap.org/news/innovation-islamic-microfinance">most popular</a> being <em>murabaha</em>, a cost-plus-markup product for asset purchases. Last year’s CGAP <a href="http://www.cgap.org/news/pakistan%E2%80%99s-wasil-foundation-wins-islamic-microfinance-challenge">Islamic Microfinance Challenge</a>, a global contest to identify innovative Sharia-compliant products, was themed “Beyond Murabaha.”

We look forward to following the developments in Islamic microfinance throughout the year.

<strong>Have you read?</strong>

<a href="http://cfi-blog.org/2013/04/26/sharia-and-savings-islamic-microfinance/">Sharia and Savings: Islamic Microfinance</a>

<a href="http://cfi-blog.org/2013/01/15/continuing-the-conversation-on-inclusion-in-the-arab-world/" target="_blank" rel="noopener">Continuing the Conversation on Inclusion in the Arab World</a>

<a href="http://cfi-blog.org/2014/08/07/financial-inclusion-of-disabled-people-in-bangladesh-the-broken-promises-of-mfis/" target="_blank" rel="noopener">Financial Inclusion of Disabled People in Bangladesh: The Broken Promises of MFIs</a>

&nbsp;

Set to Grow in 2015: Islamic Microfinance

<em><img class="alignright" style="border:0" src="http://centerforfinancialinclusionblog.files.wordpress.com/2011/08/disc-meter.jpg?w=300&amp;h=174" alt="" width="300" height="174" />&gt; Posted by Center Staff</em>

This edition of top picks features posts highlighting discussions at the 17th Microcredit Summit, how the Ebola crisis is affecting microfinance in West Africa, and new statistics on the continued growth of the mobile money industry worldwide.

The 17<sup>th</sup> Microcredit Summit, this year’s iteration of the Microcredit Summit Campaign’s annual conference, is underway this week in Merida, Mexico. For those of us not in attendance, the Campaign is live streaming the sessions <a href="http://17microcreditsummit.org/watch-live/">online</a>. NextBillion is also sharing the experience through blog posts, including <a href="http://nextbillion.net/blogpost.aspx?blogid=4047">one published yesterday</a> providing a report-back on day one of the event. The post offers insights from the day, including notable quotes from keynote speeches and panel presentations, and themes that emerged across sessions.



A <a href="http://kivablog.kiva.org/kivablog/2014/09/02/ebola-crisis-affecting-kivas-west-african-field-partners">recent post</a> on the Kiva blog details how the devastating Ebola crisis is affecting Kiva field partners working in the West Africa region. Kiva operates in two of the countries hardest hit by the crisis, Liberia and Sierra Leone, where national state of emergencies have been declared and many banks, businesses, and schools have been closed. Kiva partners deciding whether to lessen loan repayment structures or grant forgiveness is being held on a case-by-case basis. Risk of loan delinquency or default is with the Kiva lender, not field partners, so institutions and their clients are not vulnerable. Some Kiva partners including BRAC Sierra Leone and BRAC Liberia have suspended operations for at least a month.

Sharing an update on the mobile money landscape since February’s State of the Industry Report, a <a href="http://www.gsma.com/mobilefordevelopment/industry-update-33-markets-now-have-3-or-more-mobile-money-services-for-unbanked-customers">new post</a> on the GSMA MMU blog gives a run-down of new service deployments, market competition, and the impact of mobile money on financial inclusion. Eighty-eight markets now have at least one live mobile money service targeting unbanked communities. Since February, services have deployed in new country markets including Romania, Sudan, and Panama. Up from 27 markets last December, there are now 33 markets globally that have three or more live mobile money services.

<em>Image credit: <a href="http://commons.wikimedia.org/wiki/User:Iainf" target="_blank">Ianf</a></em>

17th Microcredit Summit, Ebola Crisis, Mobile Money Update – Top Picks of the Microfinance Blogosphere

<em><a href="http://17microcreditsummit.org/"><img class="aligncenter wp-image-15648" style="border:0 solid #ffffff" src="http://centerforfinancialinclusionblog.files.wordpress.com/2014/07/logo2-1.png" alt="" width="600" height="119" /></a>With</em><em> under 40 days to go, the <a href="http://www.microcreditsummit.org/about-the-summits.html" target="_blank">17<sup>th</sup> Microcredit Summit</a></em><em> is rapidly approaching. CFI’s Josh Goldstein will be speaking during a plenary session focused on new innovations for microfinance and other financial inclusion interventions to more effectively reach the excluded. With the theme “Generation Next: Innovations in Microfinance,” this should be a great opportunity to explore what is on the horizon to achieve full financial inclusion. In this post, Josh discusses industry context surrounding the Summit, and what he hopes he and those in attendance will be able to take away from the event.</em>

I am a <a href="http://cfi-blog.org/2014/05/06/impact-study-needed-do-microfinance-conferences-help-the-poor/" target="_blank">sometime skeptic</a> about the proliferation of microfinance conferences, but the upcoming Microcredit Summit in Merida, Mexico seems particularly important and timely. Personally, I am very excited about it. (In the spirit of full disclosure, I should add that I will be a speaker, and of course piqued vanity can certainly lead to bias, but I don’t suspect this is the case here.)

After reading the recently-released <a href="http://www.centerforfinancialinclusion.org/publications-a-resources/browse-publications/610-microfinance-banana-skins-2014" target="_blank">2014 Microfinance Banana Skins report</a>, which I think is excellent, I couldn’t help but come away with the feeling that the practitioners, regulators, and investors who listed the 19 risks confronting microfinance, leading with overindebtedness, missed a most important risk. Not that the risks like poor governance, overindebtedness, and staff competence that are enumerated in the report are not incredibly important; they certainly are. But I would argue that a failure of vision for a better world is the mother of all risks and that without vision, stagnation and decline inevitably set in.

I believe that financial services that MFIs provide are instrumental in helping the poor have better lives, but I also believe that they should never be seen as an end in to themselves. The Microcredit Summit Campaign shares this client-centric outlook. While sustainability and profitability are certainly important measures of an MFI’s success, it is of precious little importance if the poor client, “the end user” does not achieve a better quality of life - or at least have a chance for such.

Of course I am well aware that the advent of randomized control trials (RCTs) as discussed in the new Banana Skins eviscerated some of the triumphalist claims of the 1990’s and 2000’s of microfinance as the sine qua non of poverty alleviation tools. The extravagant claims of some in the industry do us no favors when they boast of “lifting millions of people out of poverty,” or putting “poverty in a museum,” as Muhammad Yunus once proclaimed. But as one of the RCT doyennes Esther Duflo (of the Poverty Action Lab at MIT) says, this does not mean that microfinance is not making an important difference in the lives of the poor.

Indeed, if poverty is made more bearable, if children of our clients have slightly better prospects than their parents, that is an achievement to shout about from the rooftops. Incremental change, not utopian change, is still change and is far better than sitting on our hands doing nothing. We live in an imperfect world and very few reforms in any realm lead to conclusive slam dunks - whether it’s in education, health delivery, or poverty reduction.

But back to why I am enthusiastic about the upcoming Microcredit Summit. To put it simply, more than any other microfinance conference I know of it keeps the idealism of the industry’s founding mothers and fathers alive. It is not afraid of having a vision for a better world and holding microfinance practitioners accountable as change agents.

Indeed, at the 2013 Summit in Manila the Campaign asked for Campaign Commitments from attendees to improve the lives of the poor in some concrete, tangible way. In line with the mission of the Campaign and the Summits, commitments declared the ways that the attending institutions and organizations would help 100 million families lift themselves out of extreme poverty and thereby make a major step forward in ending poverty by 2030.

For our part, the Center for Financial Inclusion committed to publishing a series of <a href="http://www.centerforfinancialinclusion.org/programs-a-projects/pwd/framework-for-persons-with-disabilities" target="_blank">disability inclusion tools and trainings</a>, developed with our strategic partners Fundación Paraguaya and Handicap International, for use by MFIs around the world. We also committed to customizing the Center’s Roadmap for Disability Inclusion for the Indian MFI market, implementing it at three MFI partners, and then disseminating these findings around India.

We have taken this commitment seriously and are doing our best to fulfill it by the end of the calendar year.

Other commitments included:
<ul>
	<li>Microfinance Council of the Philippines: By 2014, conduct and capacitate the Council’s members on social audit and client protection tools including standards on social performance management.</li>
	<li>BRAC Tanzania: By the end of 2014, double the number of both clubs and participants in the Empowerment and Livelihood for Adolescents program from 180 clubs reaching 7,600 girls to 360 clubs reaching 14,800 girls.</li>
	<li>The Arab Gulf Program for Development (AGFUND): Open an AGFUND bank in the Sudan by the end of 2013, as well as two new AGFUND banks in Palestine and the Philippines by the end of 2014.</li>
</ul>
If the Summits’ rhetoric sometimes seems a little grandiose, I personally quibble with the language of “lifting themselves out of extreme poverty,” as you might guess. Though to me this is a venial not mortal sin. What would a mortal sin be? Being so weighed down by cynicism that a dream for a better world becomes a subject of quiet irony or outright derision.

The Microcredit Summit Campaign reminds all of us that the success of our MFIs is ultimately measured by whether they extend responsible financial services to more of the unbanked so that they have a chance to improve their lives. It is the wellbeing of the client that must always come first. If we lose sight of that, we might as well go out of business.

<a href="http://17microcreditsummit.org/?portfolio=plenaries" target="_blank">Click here</a> to learn more about the plenary session “Reaching the Excluded” and other topics presented at the Summit.

<strong>Have you read?</strong>

<a href="http://cfi-blog.org/2014/06/26/to-end-extreme-poverty-focus-on-integrated-services/" target="_blank">To End Extreme Poverty? Focus on Integrated Services</a>

<a href="http://cfi-blog.org/2013/10/17/microfinance-ceos-make-six-major-commitments-at-2013-partnerships-against-poverty-summit/" target="_blank">Microfinance CEOs Make Six Major Commitments at 2013 Partnerships Against Poverty Summit</a>

<a href="http://cfi-blog.org/2013/11/14/the-financial-inclusion-2020-global-forum-a-letter-to-microfinance-institutions/" target="_blank">The Financial Inclusion 2020 Global Forum: A Letter to Microfinance Institutions</a>

The Microcredit Summits’ Commitment to Improving Lives

<em>&gt; Posted by Jeffrey Riecke, Communications Assistant, CFI</em>

<a href="http://www.silatech.com/home/news-events/silatech-news/silatech-news-details/2012/12/13/silatech-extends-microfinance-training-in-sudan" target="_blank" rel="attachment wp-att-9361"><img class="alignright  wp-image-9361" style="border:0" alt="" src="http://centerforfinancialinclusionblog.files.wordpress.com/2013/01/sudan-inside.jpg?w=300" width="270" /></a>Last month the Sudan Academy for Banking and Financial Sciences delivered <a href="http://www.ameinfo.com/silatech-extends-microfinance-training-1000-credit-324321" target="_blank">financial literacy training</a> to more than 1,000 credit agents. The training was given as part of a larger microfinance development program the Academy provides to Sudanese financial sector staff.

The literacy trainings covered a wide range of financial literacy topics, including budgeting, saving, financial negotiations, debt management, and basic familiarity with financial services. These are topics the credit agents may be able to use in their own lives, but more broadly, the credit agents are seen as the carriers of financial education messages to their clients. That is why the training also included such core client-relationship skills as listening and effective communication.

Academy President Dr. Awatif Yousif said, “The development of the microfinance sector in Sudan is central to Sudan’s overall economic development… Alongside efforts to increase the provision of financial products and services a parallel investment in financial literacy must be made so that microfinance clients have the knowledge to make best use of financing.”

The training was delivered by <a href="http://www.silatech.com/home" target="_blank">Silatech</a>, a Qatar-based organization focused on spurring job creation and economic opportunities for youth in the Arab world. Silatech has conducted financial literacy trainings in other countries and was eager to extend its work into Sudan.

<i>The Financial Inclusion 2020 campaign has organized a <a href="http://www.centerforfinancialinclusion.org/component/content/article/15-projects/290-building-a-roadmap-to-financial-inclusion-the-consultative-process" target="_blank">Financial Capability Experts’ Working Group</a> to thoroughly incorporate this area of financial literacy into the campaign’s roadmap to full financial inclusion. For more information on Financial Inclusion 2020, and to explore becoming roadmap contributors or reviewers, <a href="http://bit.ly/FI2020signup" target="_blank">sign up for project updates</a>. For more on financial literacy, check out a few of our related blog posts below. </i>

<em>Image Credit: <a href="http://www.silatech.com/home/news-events/silatech-news/silatech-news-details/2012/12/13/silatech-extends-microfinance-training-in-sudan" target="_blank">Silatech</a><a href="http://www.hatchcollaborative.com/2012/07/10/lets-have-coffee/" target="_blank">
</a></em>

<strong>Have you read?</strong>

<a href="http://cfi-blog.org/2012/06/21/structure-for-success-lessons-from-a-kenyan-financial-literacy-teacher/" target="_blank">Structure for Success: Lessons from a Kenyan Financial Literacy Teacher </a>

<a href="http://cfi-blog.org/2012/06/20/eager-investors-conflicted-teachers-reluctant-students-the-promises-and-pitfalls-of-teaching-financial-literacy/" target="_blank">Eager Investors, Conflicted Teachers, Reluctant Students: The Promises and Pitfalls of Teaching Financial Literacy</a>

<a href="http://cfi-blog.org/2011/04/12/colombia-mfis-fight-corruption-financial-illiteracy-to-close-client-protection-gap/" target="_blank">Colombian MFIs Fight Corruption, Financial Literacy to Close Client Protection Gap</a>

Some Good News from Sudan – On Financial Literacy

Kim Wilson

Jenny  Frydrych

Somen Saha

Germany

Greece

Iran, Islamic Rep.

Jordan

Pakistan

Sudan

Syrian Arab Republic

Turkey

Myanmar

Panama

Romania

Timor-Leste

Afghanistan

Australia

Azerbaijan

Bangladesh

Brazil

China

Colombia

Dominican Republic

Ghana

Guatemala

India

Indonesia

Libya

Malaysia

Mexico

Morocco

Nigeria

Paraguay

Peru

South Africa

Tanzania

Tunisia

United States

Yemen, Rep.

Zambia

Liberia

Sierra Leone

Sub-Saharan Africa

Philippines

Agent Banking

Insurance

Refugees and Migrants

Credit

Digital Financial Services

Digital Payments

Mobile Banking

Policy, Regulation and Government Initiatives

Consumer Protection

Financial Capability

Financial Inclusion Strategy

Fintechs

Impact Investing

Microfinance

Risk Management

Savings

Women

Youth

Microfinance Institutions

Customer Centricity

Blog Post

Jeffrey Riecke

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.

India is a global leader in financial inclusion. For over a decade, Accion has worked with and learned from India’s innovators, investors, and policymakers to expand economic opportunity for its people and businesses.

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.

Though Nigeria’s government has set ambitious goals for financial inclusion, the majority of its people lack a formal bank account. Accion has worked in the country since 2007 to expand access to financial services.

South Africa is a global hub for fintech innovation. Accion supports and advises South African innovators using technology to help entrepreneurs expand their businesses and families protect their homes around the world.