Jacqueline Foelster

Amin Khairy

This report is part of a two-year initiative, Mainstreaming Financial Inclusion: Best Practices, which aims to help advance efforts of financial institutions to reach customers at the base of the economic pyramid. This initiative and this report were made possible with support from MetLife Foundation, and in collaboration with the Institute of International Finance. The views and opinions expressed in this report are those of the authors and do not necessarily represent the views of the MetLife Foundation or the interviewees. All errors are our own.

Partners

Despite the growing volume of agents, the agent network model is rife with utilization and operational challenges. This brief examines the role of technological innovation as a potential driver for improving the quality and maximizing the productivity of agent models.

Report

As a means of reaching underserved customers at low cost, financial institutions have designated authority and responsibility to banking agents to deliver financial products and services. Agent banking is a model for delivering financial services whereby an institution — be it a financial service provider or a mobile network operator — partners with a retail agent to extend services in remote or hard-to-reach areas.
<blockquote>Innovative financial institutions are streamlining and digitizing their processes, and utilizing real-time data and analytics to increase both the efficiency and effectiveness of agent networks.</blockquote>
Despite the growing volume of agents, the agent network model is rife with utilization and operational challenges. The good news is that technology offers financial institutions an opportunity to make agent models more efficient and productive for themselves and their customers. Based on in-depth interviews with industry experts and senior bank officers, and supplemented by a review of the literature, this brief examines the role of technological innovation as a potential driver for improving the quality and maximizing the productivity of agent models.

We found it useful to study this topic across two time-horizons: the short-and long-term; and from the perspectives of the main stakeholders in the agent network triad: the financial institution, the agent, and the customer. This structure allows us to account for two key trends: 1) the diminishing role of cash as a payment form, and 2) an increasing readiness of institutions to embrace digital transformation. It also allows us to explore commonly-cited challenges with agent networks through an illustrative, hypothetical narrative lens, giving voice to each stakeholder group. The narratives are accompanied by real-world examples of how technological integration and innovation has helped to improve and streamline processes within agent networks. Finally, we anticipate that in a future financial services ecosystem that is digital and cashless or cash-lite, we will see the role of the agent evolving from transaction processors to solution providers.

Leveraging Technologies to Improve the Quality and Maximize the Productivity of Agent Models

Alexandra Rizzi

Mobile Money in Rwanda At-A-Glance

Rwandans Speak on Digital Financial Services

Most people in Rwanda are satisfied with mobile money services, and with the agents and user interfaces that provide it. However, there are many ways that DFS operations and practices can be improved to better protect clients and strengthen trust.

This report was prepared by Laterite, Ltd., in close collaboration with the Smart Campaign, with support from Mastercard Foundation. 

The authors of this report are Emily Farbrace, Loes van der Velde, Medha Sethia, and Alexandra Rizzi, with support from Mike O’Doherty. Data collection was supported by Jean-Baptiste Muhoza, Jean-Claude Rukondo, Fabiola Niwenshuti, and Ezron Mucyo. Data analysis was performed by Emily Farbrace, Loes van der Velde,
Medha Sethia, and Patrick Hitayezu.

The authors would like to thank the Smart Campaign and the National Advisory Council that was assembled for this project for their guidance and support for this research. In addition, the authors thank all of the respondents who shared their experience with us.

Acknowledgments

Based on a survey of over 1,200 people in three districts in Rwanda, this Smart Campaign report delves into the experiences of individuals who use digital financial services, the main client protection issues they are concerned about, and the impact and prevalence of negative experiences.

Today there are close to 700 million mobile money accounts registered worldwide — a number that, if it were a population, would rank as the world’s third-largest country. East Africa continues to lead in digital financial innovations as well as account usage, with two-thirds of the combined adult populations of Kenya, Rwanda, Tanzania, and Uganda actively using mobile money. With the proliferation of mobile financial services, particularly among underserved populations, it is vital that users be treated fairly and with dignity. In the momentum to define responsible digital finance and recognize providers of high-quality financial services, the industry must not forget the consumer.
<h1>Client Voices: Why We Listened</h1>
<a href="/about/what-we-do/the-smart-campaign/">The Smart Campaign</a>, a global initiative to create an environment in which financial services are delivered safely and responsibly to low-income clients, has long recognized that client perspectives are often underrepresented in consumer protection discussions. With the Client Voices Project, the Campaign questions whether the industry’s assumptions about what constitutes problematic treatment rightly reflect what clients themselves worry about.

The dual objectives of the project are to solicit input from low-income clients about what they consider good and bad treatment in their interactions with financial service providers and to assess the prevalence of consumer protection problems among these clients, using quantitative surveys. The project is designed to act as a catalyst for financial service providers, regulators, industry associations, consumer advocacy groups, and others to improve client protection in ways that are grounded in client feedback.
<h1>Major Findings</h1>
Based on a survey of over 1,200 people in three districts in Rwanda, this report delves into the experiences of individuals who use digital financial services (DFS), the main client protection issues they are concerned about, and the impact and prevalence of negative experiences. We find that mobile money enjoys a high degree of satisfaction and trust from clients in Rwanda, even though 40 percent of clients report being targeted by fraudulent schemes, which have become increasingly sophisticated.
<blockquote>Customers report wising up to scams and fraud, but with a continuous influx of new mobile money users and fraudsters who innovate quickly, the threat is real and constant. Fraud represents the greatest potential to damage customer trust and engagement with mobile money in Rwanda.</blockquote>
However, there are many ways that DFS operations and practices can be improved to better protect clients and strengthen trust. Client recourse mechanisms, for example, represent an important area for improvement: many clients shared that they feel helpless and unsure about what to do after realizing they have been duped. Additionally, for business models that rely more on the mobile interface than on human interaction, clients increasingly rely on agents for information and guidance. This presents an opportunity to provide better service, as well as a risk for poor client treatment.

We hope that providers, industry associations, support organizations, regulators, consumer protection advocates, and clients can benefit from these findings to create a stronger, more inclusive client protection ecosystem. We offer specific recommendations for many of these stakeholders.

Client Voices: Rwandans Speak on Digital Financial Services

Pablo Anton-Diaz

During the interviews we conducted for this report, it became abundantly clear that the mobile phone plays an essential role in fostering the digitization of customer journeys, particularly in the case of products that cater specifically to low-income segments. Indeed, the increased penetration of mobile phones and mobile money services among low-income segments has highlighted handheld mobile devices as the appropriate tool to finally incorporate financially excluded individuals into the financial sector. GSMA’s Mobile Economy 2017 report highlights the growth trends of mobile money transactions. Between 2012 and 2017, mobile money transaction value increased by 350 percent to $31.5 billion, while the number of transactions increased by 428 percent to 1.8 billion.

How are mainstream financial institutions creating effective digital customer journeys for lower-end clients? In this report, which is based on interviews with senior staff members from fifteen financial institutions in the financial inclusion space, we explore the challenges of digital transformation in each phase of the customer journey: discovery, onboarding and continuing use. We provide examples of how innovative financial institutions are addressing these challenges with creative solutions for emerging customers.

Discovery [Stage One]

The discovery stage begins when customers identify a need for a financial service. Broadly, it incorporates three steps by the customer: developing an awareness of potential options, evaluating those options, and selecting the most appropriate product. Companies compete for customers’ attention in this stage in an attempt to build brand awareness and communicate value.
One of the pre-digital era challenges banks faced targeting lower income segments in emerging markets was the relative ineffectiveness of conventional marketing techniques on those segments. The target clients of financial inclusion efforts are generally less literate than the overall population. Moreover, they often lack the confidence to approach financial institutions, fear that the institution does not want them as a customer, and discount marketing messages. They often think, “That’s not for people like me.”
One of the obstacles hindering financial inclusion is the fact that underserved customers have traditionally distrusted financial service providers. According to the Global Findex Database 2017, 16 percent of adults without an account at a financial institution cited <a href="http://documents.worldbank.org/curated/en/332881525873182837/The-Global-Findex-Database-2017-Measuring-Financial-Inclusion-and-the-Fintech-Revolution">distrust as their main barrier to opening an account</a>. Digital awareness and marketing campaigns may reach a big audience at low costs compared to traditional methods. However, to create trust among underserved segments, financial institutions need to make concerted efforts to improve how they are perceived by the unbanked.
With digitization, messages can be delivered directly to clients’ phones and tablets in simple terms or with images. For customers in the digital ecosystem, much of this happens through targeted advertising: companies compete to deliver targeted ads to specific handsets at critical moments as customers browse the internet or use social media.
<blockquote>Underserved customers don&#8217;t believe products are for them, but targeted digital messages can overcome this.</blockquote>
These channels overcome an access to information challenge and may make it less costly to raise awareness. As underserved clients connect to the internet and develop digital footprints, companies will be increasingly able to reach them with these methods.
<h2>That Human Touch</h2>
However, our interviews suggest that, to be effective, digital models must be combined with elements of human touch that customers still prefer or find more comforting. This is especially true for customers new to digital experiences. While targeted advertising is useful, it cannot address many of the concerns clients have when evaluating and selecting products.
As described in CFI&#8217;s Uniting Tech and Touch: Why Centaur Products Are Better for Consumers and Providers, consumers with limited exposure to digital financial services find it especially important to <a href="https://www.centerforfinancialinclusion.org/uniting-tech-and-touch-why-centaur-products-are-better-for-consumers-and-providers-evidence-from-kenya">speak to a person when they are first learning about a product</a>. Rather than scrolling through FAQs, customers can ask questions in their own words, which builds confidence. A guiding hand may be especially helpful for underserved clients who are <a href="https://content.accion.org/wp-content/uploads/2018/10/1122_TechTouch-RO6-Singles.pdf.">unaware of the range of available products, lack the digital savviness to evaluate products, or mistrust financial institutions</a>. Many customers interviewed for our Tech and Touch study said that their very first question is whether a new brand or service is legitimate. To be convinced, they want to speak to a person they can look in the eye.
Many of the financial institutions we interviewed for this paper use tech and touch during the discovery stage. Several institutions reported that offering a human touch to prospective customers is critical to boosting adoption, and some of the products with the highest rates of adoption add human elements to primarily digital experiences.

Discovery Case Studies

Onboarding [Stage Two]

Once a person decides to apply for a product, the provider initiates a series of activities to establish the customer’s credentials and eligibility and set up the account. This stage also involves underwriting decisions for credit products, providing detailed information about product terms and conditions, and signing contracts. Most of this process used to involve paperwork, for the obvious reason that it traditionally required customers to sit with staff to fill out paper forms and check documents.
In its traditional form, the onboarding stage can be especially difficult for underserved clients. The prospect of opening an account the same day was often low due to insufficient documentation, such as lack of proof of income (especially hard to obtain for people working in the informal sector). According to the 2017 Global Findex survey, nearly <a href="http://documents.worldbank.org/curated/en/332881525873182837/The-Global-Findex-Database-2017-Measuring-Financial-Inclusion-and-the-Fintech-Revolution">one quarter of adults without an account at a financial institution cited a lack of documentation as a reason</a>. When documentation is completed on paper, a customer may have to travel to and from a financial institution several times, which is time consuming even in urban environments. Approximately one-fifth of the Findex respondents without accounts also cited distance to a financial institution as a barrier. For loan products, this stage is even more difficult for customers: the approval process can often take days or weeks, and understanding contract terms and conditions can be daunting, even for the well-educated.
Over time, onboarding processes have gone digital, as staff members were given tools to enter information directly into a computer rather than first writing it down in paper. Today, a fully digital onboarding process—in which customers can sign up for a product on their phones or computers from any location, often within a few minutes—is spreading. With fully digital onboarding, the customer gains convenience and speed, while the provider reduces personnel costs.
In response to these barriers, financial service providers are working to make the onboarding process easier for clients wherever possible by creating tools that allow customers to complete portions or entire onboarding processes digitally. In our interviews, we found that financial institutions are moving toward digital onboarding, though not all have fully reached that destination. There are a number of examples where the process occurs entirely from a smartphone, and others that still require some face-to-face element.
<blockquote>In countries with digitized national identification systems, know your customer (KYC) can be fully digitized.</blockquote>
One of the most helpful advances in this stage concerns processes. In countries with digitized national identification systems, KYC can be fully digitized through provider links to the national identification database. However, in a number of instances, the national identification system has not been fully implemented or streamlined sufficiently to allow for onboarding to take place remotely. The role of government in establishing an enabling environment to promote financial inclusion and digital financial service adoption was a major theme in many of the interviews conducted.

Onboarding Case Studies

Continuing Use [Stage Three]

The continuing use phase includes product use, customer engagement, cross-selling and responding to inquiries or complaints, as providers work to build extended relationships with clients. Financial institutions hope that this will be the longest stage in the customer journey, and it is certainly the stage in which initial investments in discovery and onboarding pay off. However, as low account usage rates—particularly for mobile money accounts—suggest, it is also one of the most difficult for financial institutions to get right. According to the latest Global Findex, 20 percent of account owners worldwide reported having an inactive account, that is, no deposit or withdrawal—digital or otherwise—in the past 12 months.
Many FSPs that are just starting to cater to clients at the base of the pyramid struggle to build a relationship with clients. Learning about their financial lives and habits in order to continue improving and innovating their service offerings is challenging because they are thin-file customers, so records about their financial lives are scarce. Additionally, many clients of this market segment are interested only in a particular feature of the product that they have identified is beneficial for them and thus are thought to be less open to exploring other beneficial features. Because of this, FSPs face many challenges when trying to engage their clients in this segment.
In a traditional financial institution, contact with customers is limited to times when customers visit branches for transactions or inquiries, or to expensive phone or mail outreach. Digital systems allow for ongoing contact at a much lower cost, giving institutions the opportunity to develop a different kind of relationship with their customers. The digital footprints that customers leave allow companies to conduct a range of analytics, so that messages sent by SMS or other means can be highly targeted. Our interviewees reported using machine learning to cross-sell products at certain moments for the customer and using chatbots to provide customer service assistance. The digital relationship can also incorporate nudges, tools and reminders based on behavioral insights to encourage clients to save more, manage better their debts, keep closer track of their expenses, and build more accurate personal budgets. In this way, a bank can contribute to customer financial health.
Banks can also offer enhanced, tailored financial services to emerging customers through digital means. mBank is using machine learning to identify what managing director Jakub Fast calls “natural scenarios,” during which they can offer tailored financial services. For example, if their system detects that a customer is using his or her mBank card to pay for transportation to the airport, the customer might receive an offer for a travel insurance product. Or an additional line of credit might be offered to a customer with a good credit score who has maxed out his or her credit card during a transaction. Similarly, Bancolombia uses machine learning to analyze the savings behavior of its Ahorro a la Mano (“Savings on Hand”) customers to identify an approval limit for their Credito a la Mano (“Loan on Hand”) product. The customer can go through the complete customer journey for these products—from signing up for Ahorro a la Mano, to applying for and repaying credit from Credito a la Mano—digitally.
At financial institutions with digital offerings, examples like these are not particularly unique. The majority of institutions we spoke with mentioned the importance and use of some exciting new technology or the application of analytical tools to their data.
One area where human touch may still be needed is complaint resolution. Institutions are using email, chatbots, live chat and call centers to handle inquiries and complaints, and these mechanisms may take care of the great majority of inquiries. However, our research with customers in Kenya suggests that while they are comfortable with digital transactions, when something goes wrong they want to know that they can have <a href="https://www.centerforfinancialinclusion.org/uniting-tech-and-touch-why-centaur-products-are-better-for-consumers-and-providers-evidence-from-kenya">ultimate recourse through a person</a>. If most inquiries can be answered through automated means—inexpensively—the FSP may still be able to provide a human response for more difficult cases, while saving money overall on the complaints function.
What was most interesting in the examples we identified related to this phase was the degree to which innovative bank offerings relied on partnerships with technology companies to reimagine the customer journey. Such partnerships allow for rapid experimentation, take advantage of the technology know how of other companies, which may be more attractive than in-house development. BBVA, for example, runs an Open Innovation program, which supports its business verticals to find and integrate cutting-edge technology start-ups. The bank uses a variety of methods to identify partners, such as competitions where start-ups pitch their ideas to senior executives. The winners of those competitions are then put on a fast track to deploy their solutions as quickly as possible.

Continuing Use Case Studies

Takeaways

The case studies presented throughout this report offer important lessons about how mainstream financial institutions can create a successful customer journey in the digital age.
One important message is that it will likely be necessary to maintain some portion of touch even as the majority of transactions shift to tech. As the case studies in the discovery stage show, this is especially important in early stages of the customer journey, and to assist with complaint resolution. Quite possibly, as clients interact in a digital environment, they will become more comfortable locating and deciphering digital information and will rely less on the human touch to usher them along at key stages in their journey. However, as long as trepidation about new products and services still exists, the availability of a human touch element is needed. As Keith Sandbloom of FINCA International put it: “We want to maintain the [human] touch with our clients, but we [also] want to implement tech to offer new products through new channels that add convenience to our clients’ lives. When we talk about how our business model is evolving, we use a phrase we call ‘touchtech.’”
<blockquote>Maintaining some portion of human touch might be necessary even as the majority of transactions shift to tech.</blockquote>
Our case studies also show how policymakers and regulators play important roles, particularly in setting up the framework for smooth digital onboarding. The advent of national identification systems and changes in KYC regulation have allowed banks to launch fully digital customer journeys. Scans of photo IDs and/or biometrics, verified with uplinks to national databases, have replaced trips to branches and photocopies of national registration cards.
We have also seen that partnerships between financial institutions and fintech and other technology companies are important in facilitating the customer journey. Companies that have largely digitized their operations make use of predictive analytics to segment their clients and offer products and services in a targeted way. They are also using artificial intelligence chatbots to serve customers. Partnering with fintech and technology companies provides institutions with capabilities that are otherwise difficult to acquire. In our case studies, we highlighted a partnership that allows for communication between deaf customers and frontline staff and a conversational AI tool to that supports a digital bank. Developing even one of these solutions in-house is a time-consuming and costly process, and collaborations represent an efficient way for mainstream financial institutions to adapt to the digital environment and improve the customer journey.
Transformation from traditional to digital models is not easy. It requires deep rethinking of business models, rather than simply automating existing ones. The challenge is both internal (such as major changes in staff roles and upgrading in-house data analytic capabilities) and external (such as adapting to new regulations or forging new partnerships).
<blockquote>Transformation from traditional to digital models requires deep rethinking of business models, rather than simply automating existing ones.</blockquote>
Digital transformation takes time, upfront investment and ingenuity. However, the potential benefits make digital transformation models worthwhile, as mainstream financial institutions gain new customers and while reducing operating costs, and emerging customers enjoy faster, more convenient and more tailored financial products and services.

Acknowledgements, Interview List and Endnotes

More Mainstreaming Financial Inclusion Reports

How are mainstream financial institutions creating effective digital customer journeys for underserved clients? We explore the three primary stages involved in digital transformation and provide examples of how innovative financial institutions are addressing its challenges with creative solutions for emerging customers.  

<h1>Introduction</h1>
Financial services are going digital. Digitization will change the way financial institutions organize themselves to relate to their customers, and it will dramatically change how customers experience financial services. These changes will be especially profound for traditionally underserved customers who are the targets of financial inclusion efforts.

The good news is that digital delivery models make it possible—and profitable—for banks to serve many people who were previously excluded because their incomes were too low or their locations too remote to reach through high-touch models. The high operational costs associated with physical buildings and staffing only makes sense if the branches break even and provide a satisfactory return within an acceptable timeframe. Low-income customers with thin credit histories borrowing small amounts of money have long presented a challenge to the analog way of doing business. Thus, serving the underbanked customer segment through digital channels presents an opportunity—by lowering operational costs and increasing customer engagement—to transform financial inclusion into a sustainable business. Additionally, digitization allows thin-file customers to have their creditworthiness assessed through alternative scoring models that incorporate other types of behavioral records.

When done effectively, the returns to digital transformation can be significant. For example, DBS Bank, a financial services group in Asia named <a href="https://www.euromoney.com/article/b18k8wtzv7v23d/world39s-best-digital-bank-2018-dbs">“world’s best digital bank” by Euromoney in 2018</a>, has seen digitization contribute to rising shareholder value. DBS customers who process more than half their transactions remotely bring in more revenue than traditional customers. <a href="https://www.economist.com/finance-and-economics/2018/03/08/how-digitisation-is-paying-for-dbs">Two-thirds of DBS’s gross profit currently comes from digital customers</a>. A DBS staff member told us, “The cost-to-income ratio for digital customers is just 34 percent, compared to 55 percent for traditional customers. The return on equity from digital customers is, impressively, at 27 percent.” Numbers such as these make it attractive to reach new customer segments. But if the transition from face-to-face to digital is to succeed, financial institutions will need to understand and address the special characteristics of these segments and get the digital customer journey right—for both their own operations and the customers’ experience.
<h2>Walking vs. Flying</h2>
For customers, the difference between a traditional and a digitized customer journey can be as dramatic as the difference between walking and flying in an airplane. The traditional customer journey includes traveling to branches to talk with a customer service representative, assembling pages of paper documents to meet KYC requirements, and then waiting for days to receive decisions. With digitization, customers can discover and apply for products on their phones and receive funds into mobile wallets, all in a matter of minutes.
<blockquote>The difference between a traditional and digitized customer journey can be as dramatic as the difference between walking and flying in an airplane.</blockquote>
In order to produce such a streamlined journey, financial institutions must address technical and operational challenges and regulatory issues. And, as we discuss in this report, the journey they construct needs to work well for customers—especially when those customers are new to their services. Digitization can bring enormous gains in speed and convenience to customers, but it can also create gaps as it shifts from familiar, person-to-person interactions to interactions that take place on a digital device.

Charting the Customer Journey in the Digital Age

This report was made possible with support from the Development Bank of Latin America (CAF). We also wish to thank our partners in Colombia, Banca de las Oportunidades and the URF (Unidad de Proyección Normativa y Estudios de Regulación Financiera) of the Colombian government, which were instrumental in helping us organize logistics for the workshops.

An analysis of how to embed behavioral insights into financial educational programming

In July 2017, Colombia launched its National Economic and Financial Education Strategy, which established an action plan for promoting financial education in the country. The Intersectoral Commission for Economic and Financial Education, in charge of implementing the strategy, partnered with the Latin American Development Bank (CAF) and the Center for Financial Inclusion at Accion (CFI) to develop a training program to impart the latest financial education programming insights and best practices to those who would be implementing the national strategy.

This report describes our efforts to communicate behavioral economics best practices to policymakers and practitioners in Colombia, including case studies from Fundación Capital and Banco de la República. We also evaluate the success of our efforts, and make recommendations for further embedding behavioral insights into financial education programming.
<h1>Major Findings</h1>
<h5>WHAT DOES IT TAKE TO BUILD FINANCIA CAPABILITY?</h5>
<h2>Shifting the financial education paradigm in Colombia begins with understanding how to design behaviorally-focused interventions.</h2>
Financial education programs are delivered by financial service providers, government agencies, public schools and universities, research institutions, institutional donors and non-profit organizations throughout Colombia. The majority of these programs are delivered in classroom-based settings, town hall-style lectures, seminars or workshops and employ printed materials and videos to communicate information. These kinds of traditional financial education models are difficult to scale, expensive to implement and often struggle with low attendance and participation.
<blockquote>Traditional financial education models are difficult to scale, expensive to implement and often struggle with low engagement.</blockquote>
Information transfer alone does not adequately engage people in the type of active learning and practice that prompts
behavior change. There is a growing body of evidence showing that financial education interventions that incorporate behavioral economics principles are more likely to improve client’s money management skills than traditional interventions.
By hosting six two-day workshops between for a mix of stakeholders from the public, private, and non-profit sectors in Bogotá, we gave practitioners a holistic understanding of what is necessary to design behaviorally focused interventions. We also asked participants to think deeply about cognitive biases that impact the success of behavior change programs, including procrastination, social norms, limited attention span, predisposition to the present, loss aversion, and default options. We asked participants to identify how these biases affect their lives, underscoring the fact that cognitive biases are present in all of us, not just beneficiaries of social programs or financial product users.

This project gave us a valuable opportunity to put our own behaviorally-informed principles into practice in the development of the workshops. We aimed to make the workshops fun, social and customized to the target audience. We developed simple, memorable rules of thumb for making financial education workshops more effective. Additionally, we were able to leverage what seemed to be somewhat of a national "teachable moment" right at the start of the implementation phase of the National Financial Education Strategy of Colombia. Overall, we are satisfied with the high level of information retention that we found in our follow-up surveys, and we are convinced that this constitutes a very important step in the right direction.

Expanding Financial Capability in Colombia

<ul>
<li>Colombia, Peru, Uruguay, the Philippines and India have the most conducive environments for financial inclusion, driven by a high degree of government coordination</li>
<li>Rwanda and South Africa stand out for the most enabling environments amongst countries in sub-Saharan Africa</li>
<li>Gaps in connectivity infrastructure and digital identification systems represent a barrier for the expansion of digital financial services in sub-Saharan Africa and Middle East and North Africa</li>
<li>E-money is making inroads in countries that allow market entry to a variety of providers</li>
<li>Technology introduces new opportunities and new risks, and most countries still need to increase their commitment to cybersecurity and develop their capacity to enforce data privacy protections</li>
</ul>
<h2>The top-performing countries demonstrate government and policy support for financial inclusion, prioritize financial stability and integrity, and foster inclusion through a variety of products and outlets.</h2>
Colombia, Peru and Uruguay hold the top three spots in the overall rankings in the 2018 Global Microscope on Financial Inclusion. Of the top five overall, only fourth-ranked India has yet to issue a financial inclusion strategy, although the country is following a coordinated, three level-approach and publication of a strategy is expected during 2018-19. Rwanda and South Africa stand out for the most enabling environments amongst countries in sub-Saharan Africa (SSA), tied for 11th place overall. In terms of stability and integrity, leading countries also feature market entry regulations that do not deter new players that serve the low and middle-income population. A common strength among top-ranked countries is the ease with which customers can access a variety of financial products and outlets.
<h2>E-money is making inroads, becoming more accessible as a wider variety of providers are able to enter the market.</h2>
Most countries in the 2018 Microscope have made efforts to facilitate new digital providers and performed well on the market entry restrictions indicator. This overall positive operating environment across the world, along with client demand, is contributing to e-money becoming a leading digital financial product. However in three countries (Chile, Guatemala and Vietnam) there is no legal recognition of e-money and 16 countries have opted for bank-led digital transformations. The research suggests that competition and innovation can make e-money more accessible, especially if a wide range of institutions can become e-money issuers.
<h2>Although many countries in SSA and Middle East and North Africa (MENA) score well on Government and Policy Support, a lack of connectivity infrastructure and digital identification systems limits the expansion of digital financial inclusion.</h2>
In terms of connectivity, most of the SSA countries in the index have substantial room for improvement—although South Africa, Senegal and Ghana scored among the top half of countries in this category. Infrastructure for payments also has considerable room for growth in both regions.
<h2>Technology introduces new risks, and many countries still need to update cybersecurity laws and develop their capacity to enforce data privacy protections.</h2>
In 35 of the 55 countries in the 2018 Microscope, consumer protection regulations generally facilitate financial inclusion, and previous editions have shown gradual strengthening of these protections over time. As digital financial services expand, new consumer risks emerge, and therefore, in the best performing countries, traditional consumer protections are coupled with data privacy and cybersecurity safeguards. Colombia and South Africa have dedicated financial consumer protection frameworks and specialized enforcement capacity, as well as government entities with a strong capacity to enforce data protection laws. However, in most countries data privacy protections are not well developed—42 countries have limited or no capacity to enforce data privacy.
&nbsp;

<ul>
<li><a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2018/11/EIU_Microscope_2018_PROOF_10.pdf">Global Microscope 2018 (English)</a></li>
<li><a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2018/10/EIU_Microscope_2018_SP_PROOF_05.pdf">Global Microscope 2018 (Spanish)</a></li>
<li><a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2018/10/2018_Microscope_29-Oct-2018.xlsm">Global Microscope Model (.xlsm)</a></li>
</ul>
&nbsp;

The 2018 Global Microscope shows countries in Latin America and Asia have the most conducive environments for financial inclusion.

The Global Microscope is a benchmarking index that assesses the enabling environment for financial inclusion in 55 countries. Now in its 11th year, the Microscope is the global standard for financial inclusion policy in developing economies. The 2018 Global Microscope on Financial Inclusion, with a revised research framework, offers a forward-looking focus on the digital financial services now and in the future, and the critical role for financial inclusion envisioned in the Sustainable Development Goals.

The 2018 Global Microscope sets a model for an enabling environment for financial inclusion across five domains: government and policy support, stability and integrity, products and outlets, consumer protection, and infrastructure. The Microscope evaluates the regulatory and policy environment for key players in the financial inclusion space including banks, non-bank financial institutions, e-money issuers and cross-border payment providers. It also focuses on the role of inclusive insurance, financial agents, financial technology (fintech) firms, and credit information providers.

The Global Microscope is produced by The Economist Intelligence Unit (The EIU), with policy guidance and financial support from leading organizations in the field, including CFI.

&nbsp;

Global Microscope 2018: The Enabling Environment for Financial Inclusion and the Expansion of Digital Financial Services

Patrick Traynor

How secure is data used in digital credit?

Mobile phones and networks are transforming the world of finance, creating opportunities  for widespread financial inclusion, especially among neglected regions and groups. Security and privacy should be among the most important considerations when building digital finance systems.
Credit decisions are often based on sensitive information and online finance offerings are no exception. The sensitivity of this information gives rise to a series of critical questions for customers:
<ul>
 	<li>To whom am I giving my data? And who else do they allow to access it? For what purposes?</li>
 	<li>How do the companies protect data so that people who do not have legitimate access cannot use or steal it?</li>
 	<li>What rights and options do I have if something does go wrong?</li>
</ul>
The goal of this research, conducted by CFI Fellow Patrick Traynor, is to examine how well digital lenders are responding to these questions.

&nbsp;

&nbsp;

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Digital Finance and Data Security

Finance for All: Wedded to Fintech for Better or Worse is the latest survey in a series going back to 2008 and previously titled Microfinance Banana Skins. The new title reflects the evolution of the microfinance business into a wider market for the provision of financial services to the world’s financially excluded, with the participation of a greater range of suppliers, including commercial banks, technology companies and telcos. The survey was conducted by the Centre for the Study of Financial Innovation (CSFI), an independent London think tank, and supported by CFI and the Citi Foundation.
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Finance for All: Wedded to Fintech for Better or Worse, examines risks (or banana skins) in the provision of financial services to people in emerging markets who have little or no access to these services. Based on a survey of over 300 practitioners and close observers of the industry in 70 countries, the report finds that new technology is delivering considerable benefits to the financial inclusion market – but is also creating new risks that service providers need to manage if they are to succeed.

<h1>Major Findings</h1>
While technology opens the way to huge growth in the provision of financial services, it is expensive and complex, and contains risks of its own. Chief among these is the risk that providers will fail to understand it effectively and place themselves at risk. It could lead to irresponsible borrowing and debt difficulties as tech helps avail credit to more people. Technology may also attract providers who are more interested in commercial gain than in the social goals of financial inclusion, or those who are unable or unwilling to design products specifically for the excluded.

In addition to technology, the survey also identifies risks that are seen to be rising in this market. Chief among these is political risk, such as interference by government in the form of interest rate caps on loans, debt waivers and subsidized competition. The risk of bad debts is also seen to be growing as the problem of indebtedness among low income populations persists. Weakness in the governance and management of service suppliers continues to be a concern. The risk of crime, particularly fraud, cyber crime and money laundering, is a growing worry.   On a more positive note, risks that are seen to be receding include the state of the global economy thanks to growing signs of recovery, and the availability of funding for financial inclusion services, particularly in the form of impact investing.

Finance for All: Wedded to Fintech for Better or Worse

John Owens

What does responsible digital credit look like?

All over the world, small loans to individuals and very small businesses are increasingly made using digital channels, whether online, via a mobile device or through an agent. However, trust, confidence and responsible lending practices need to be in place to ensure this industry is successful and its customers are protected and empowered.

In <a href="storage/Responsible_Digital_Credit_FINAL_2018.07.18.pdf">Responsible Digital Credit</a>, CFI Fellow John Owens outlines the digital credit landscape and the risks customers face, and examines the best practices, standards and initiatives that exist or should be implemented to improve consumer protection in digital lending. Ultimately, John argues, it will take a village to ensure that digital credit clients are protected—including govenrments, regulators, industry players, advocates and consumers themsleves. He sees three key activities: 1) industry self-regulation, 2) certification of digital credit providers, and 3) directly empowering consumers, as key to the future of what responsible digital credit looks like.

This report is published jointly with the <a href="http://www.smartcampaign.org/">Smart Campaign</a> and was made possible by support from Mastercard Foundation and other partners.

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Responsible Digital Credit

Ethan Loufield

Tess Johnson

Dennis Ferenzy

This report is part of a two-year initiative, <a href="/about/what-we-do/mainstreaming-financial-inclusion-best-practices/">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 Institute of International Finance, and made possible with generous financial support from MetLife Foundation.

New types of data and new data tools present an unprecedented opportunity for financial service providers to better understand and serve clients, especially credit-seeking “thin-file” clients who are otherwise excluded from the formal financial sector. 

<h6>LEGACY AND NEW FINANCIAL SERVICE PROVIDERS HAVE A LOT TO GAIN FROM NEW DATA</h6>
<h3>The traditional boundaries separating players in adjacent industries are blurring, and the future market for financial services is up for grabs.</h3>
There are many internal and external challenges that providers must address for the promise of new data to be fully realized. From getting the right culture and technical talent in place to engaging with regulators and partners on data sharing and management, there are numerous obstacles to negotiate in capitalizing on the explosion of new data to reach underserved and unserved markets with new commercially viable solutions.

This report is intended to help mainstream financial institutions accelerate their efforts to confront these challenges and future-proof themselves for what the data revolution has in store, but may be useful to other financial service providers as well. However, this report is not an attempt to provide a “how-to” guide for navigating the various stages of the data value chain—there are too many contingencies to prescribe a “one-size-fits-all” solution. Instead, it is an effort to shed light on the potential of data to improve financial services for the underserved.

Accelerating Financial Inclusion with New Data

Allyse McGrath

Sonja Kelly

Financial institutions are leveraging innovation, new technology, social networks, and other tools that inform and engage customers. In doing so, banks are driving greater use of products and increasing consumer confidence.

Banking Sector Approaches to Customer Engagement and Capability explores how financial institutions are leveraging innovation, new technology, social networks, and other tools that inform and engage customers. This brief builds on the belief that good product design builds the financial capability of customers. The research captures a number of successful models, including:
<ul>
 	<li>RBL offering unsecured loans that allow customers to build up a credit score for the first time in India</li>
 	<li>Standard Bank leveraging existing informal group savings culture combined with a lottery to incentivize and reward savings activity in South Africa,</li>
 	<li>A small cooperative bank “rounding up” loan repayments to create an auto-saving mechanism among credit recipients in Mexico.</li>
</ul>
This brief is part of the Mainstreaming Financial Inclusion: Best Practices initiative which aims to facilitate learning and action on how mainstream financial institutions around the world can reach underserved populations with quality financial services. The project is completed in partnership with the Institute of International Finance (IIF), with support from MetLife Foundation.

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Banking Sector Approaches to Customer Engagement and Capability

Latest Reports

Director of Data and Insights, GSMA Mobile Money

Nika Naghavi

Ms. Mergia Deressa joined VisionFund Ethiopia in February 1998, and since then has worked in various capacities and positions throughout the organization. She joined the Board of Directors in November 2012 and assumed the Board Chair position in June 2017. Ms. Mergia Deressa has a Bachelor’s of Science Degree in Animal Production and Range Land Management from Hawassa University, Ethiopia and a Master’s Degree in Organizational Leadership from Eastern University of the United States.

Board Chair – VisionFund Ethiopia

Eleni Mergia Deressa

Mr. Demeke is a Marketing and Corporate Communication Director at Berhan Bank S.C. In addition, he has served as Director for International Banking Operations and Branch Operations (Retail Banking Operations) for the last 20 years. Mr. Demeke has a Bachelor’s Degree in Management Information Systems from Unity University and a Diploma of Commerce in Accounting from Addis Ababa University of Commercial College.

Board Member – VisionFund Ethiopia

Beneyam Mesfin Demeke

Mr. Geleta Kuma is a Program Development and Quality Assurance Director at VisionFund Ethiopia. In addition, Mr. Geleta Kuma has served as Program Manager at World Relief, Darfur, Sudan; Deputy Director for Humanitarian Implementation at Save the Children; and Ethiopia Country Office and Area Coordinator at Tear Fund Disaster Management Team, Sudan. Mr. Geleta Kuma has served on the Board of Directors of VisionFund Ethiopia since 2017. He has a Bachelor’s Degree in Geography from Addis Ababa University, and a Master’s Degree in Regional Planning from Heriot-Watt University of Scotland.

Beyene Geleta Kuma

Mr. Dinote Kussia is an accountant and senior auditor at A.A. Bromhead &amp; Co. Chartered Accountants and UK Registered Auditors. He has been trained on audits of NGOs and private sector businesses in particular. Mr. Dinote Kussia has served on the Board of Directors of VisionFund Ethiopia since 2017. He earned a Bachelor’s Degree in Management from Unity University, Ethiopia and an MBA in Specialization in Finance from Lead Star College.

Mengistu Dinote Kussia

Ms. Sibanda has over 25 years’ experience in banking and microfinance and was previously the Managing Director of one of the biggest microfinance institutions in Zimbabwe before co-founding VIRL Financial Services. Ms. Sibanda is a former vice Chairperson of Zimbabwe Association of Microfinance. Additionally, she chaired the committee that looked into introducing the Credit Bureau to members of the Association. She holds an MBA and has attended the Boulder Institute of Microfinance.

CEO – VIRL Financial Services, Zimbabwe

Virginia Sibanda

Ms. Tose Majome is the holder of an honors degree in Psychology as well as a UNISA Bachelor of Laws. Her qualifications include diplomas in Education and Training Management. Her career spans an HR consultancy, practice, research and secondary school teaching. Ms. Tose Majome is a practicing legal practitioner at Jessie Majome &amp; Company Legal Practitioners.

Board Chair – VIRL Financial Services, Zimbabwe

Miriam Tose Majome

Bridget Morris (BA Hons, Grad-C-E) has 30+ years of experience in IT, Payments and Microfinance. For half of this time she has been a self-employed consultant based in Zimbabwe leading projects all across Africa, as well as the Caribbean, Scotland, Kazakhstan, and China. Key local work was the design and build of Zimswitch, the local electronic interbank clearing house, to which she still consults and provides guidance around the specification of ZETSS, the local RTGS system. More recently she has taken this payments expertise into the Micro finance area.

Board Member - VIRL Financial Services, Zimbabwe

Bridget Sinclair Morris

Mr. Buraimoh is a Non-Executive Director of Richway Microfinance Bank Limited and Chairman of its Board Audit &amp; Risk Assessment Committee. He is a Legal Practitioner and the Senior Partner and founder of KB &amp; Company. He is in charge of Corporate Commercial and ADR (Mediation) Sections of the Firm with about 20 years’ experience in active Legal Practice. Mr. Buraimoh is a Notary Public of Nigeria and an active member of the Section of Business Law of the Nigerian Bar Association, Commonwealth Lawyers Association and International Bar Association.

Board Member – Richway  Microfinance Bank, Nigeria

Kehinde O. Buraimoh

Mr. Oni is currently the Managing Director &amp; CEO of Richway Microfinance Bank Limited. He was the past Managing Director &amp; CEO of FBN Mortgages Limited (a subsidiary of First Bank of Nigeria) with about 25 years’ experience in the banking industry. He was formerly the General Manager and Chief Representative Officer in charge of South Africa Rep Office of First Bank with coverage for business development in the Southern African Development Countries. Mr. Oni was also a Past President of the South Africa – Nigeria Chamber of Commerce.

CEO – Richway  Microfinance Bank, Nigeria

Adenrele Oni

Ms. Opondo is a professionally qualified accountant and a fellow of the Association of Chartered Certified Accountants with more than 20 years of work experience. Currently, she is a Team leader, Community Care at Watoto Ministries, focused on empowering vulnerable women and children through Christ-Centred holistic care for community transformation. Ms. Opondo currently serves on a number of boards in the Financial Services industry, Business, Religious, NGO, and Regulatory Sectors. She holds a Masters of Arts in Organizational Leadership and Management.

Board Member – Opportunity International Uganda

Jacqueline Kobusingye Opondo

Mr. Horwood is currently the Global Head of Risk at Opportunity International, and a Non-Executive Director at Opportunity International, a role he assumed in November 2016. Mr. Horwood boasts a rich history in the Banking sector, with a focus in risk management. Before joining Opportunity International, Mr. Horwood had previously worked as the Executive Director at Orient Bank Limited, Group Head of Risk Management at DFCU Group Limited and Risk Director at Barclays Bank of Ghana. He has a wealth of experience in risk assessment.

Non-Executive Director – Opportunity International Uganda

Mark Horwood

Mr. Waititu Ngunya, CEO, GE Healthcare in East Africa, is a seasoned business leader whose vision is to open up space for individuals and industry to deliver transformative change in emerging markets. His dual passion for Africa and ICT has seen him hold several leadership roles across the continent. Mr. Waititu Ngunya is a current board member of the American Chamber of Commerce in Kenya and the immediate former Vice Chair of the ICT sector committee of the Kenya Private Sector Alliance. Mr. Waititu Ngunya holds a Master’s in Computer Science and a Master’s in Business Administration, both from University of Liverpool.

Board Member – Odyssey Capital, Kenya

Andrew Waititu Ngunya

Dr. Mtumbuka works at Airtel Africa in a regional role covering IT Operations and Governance. Previously, he was IT Director for Airtel Malawi and later Rwanda. Dr. Mtumbuka has also held prior roles as Head of Technical Services for MALSWITCH, the premier provider of banking technology solutions in Malawi. Before that, Dr. Mtumbuka held IT management roles covering eight countries in Shell’s Exploration and Production – Europe. In 2012, Dr. Mtumbuka was elected an Archbishop Tutu Fellow by the African Leadership Institute, as one of the 25 high potential young African leaders. Dr. Mtumbuka is also a reputable international motivational speaker.

Board Member – NBS Bank, Malawi

Matthews Mtumbuka

Mr. Ngwenya joined NBS Bank as CEO in April 2017 after completing a 2 year contract as CEO for Opportunity International Bank of Malawi. His role is to provide overall direction and leadership of the bank and ensure that all aspects of the bank’s activities are managed efficiently and effectively to achieve the best interest of shareholders, customers and employees. He previously worked for Steward Bank as its first CEO and Executive Director. He is currently the Chairman of National Switch Malawi, Vice President of Bankers Association of Malawi and a board member of Nico Technologies.

CEO – NBS Bank, Malawi

Kwanele Batshele Ngwenya

Elisabeth Rhyne is the managing director of CFI. As senior vice president of Accion since 2000, Beth led Accion’s initial entry into Africa and India, directed the organization’s research efforts to develop new financial products, and managed Accion’s publications and educational activities.
Recognized as a leading thinker and writer in the field of microfinance, Beth has published numerous articles and four books on the topic, including Mainstreaming Microfinance: How Lending to the Poor Began, Grew and Came of Age in Bolivia (Kumarian Press, 2001). She was also co-editor of The New World of Microenterprise Finance (Kumarian, 1994), which provided the introduction to microfinance for many of the field’s current professionals.
Beth was director of the Office of Microenterprise Development at the U.S. Agency for International Development (USAID) from 1994 to 1998, where she developed and led USAID’s Microenterprise Initiative. While there, she contributed to the founding of the Consultative Group to Assist the Poor (CGAP) and the Boulder Institute of Microfinance. Beth’s experience includes eight years of residence in Africa (Kenya and Mozambique) and independent consulting on microfinance policy and operations for governments, international organizations and microfinance institutions.
She holds a master’s and Ph.D. in public policy from Harvard University. She earned a bachelor’s degree in history and humanities from Stanford University.
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Managing Director

Elisabeth Rhyne

In her role as vice president of the Smart Campaign, Ms. Barrès leads global efforts to keep clients first in financial inclusion. She comes to the Smart Campaign with over 20 years of experience in financial inclusion and banking. Deeply motivated to reduce inequality and improve the lives of vulnerable people, she has devoted her career to spearheading innovative solutions that increase access to quality financial services and contribute to improving people’s lives. From 2007 to 2010, she managed Kiva’s early operations and developed its global strategy to maximize social impact. She helped to create the MIX in 2002, and led its strategic initiatives until 2007. Ms. Barrès has been a key contributor to best-practice publications on standards and financial performance monitoring, and is a founding member of Women Advancing Microfinance.
Ms. Barrès holds a bachelor’s degree in economics from the University of Montréal, an MBA from McGill University, and a post-graduate degree in development economics from the Sorbonne and is fluent in English, French and Spanish.

Vice President, Smart Campaign

Isabelle Barrès

Deborah leads the Africa Board Fellowship Program, which is dedicated to strengthening governance and improving risk management and strategy for CEOs and board directors of sub-Saharan African financial institutions. She also directs the Financial Inclusion Equity Council (FIEC), a membership organization of private entities making equity investments in financial institutions in the developing world.
Deborah is co-editor of The Commercialization of Microfinance: Balancing Business and Development, and the co-author of Alchemists for the Poor: NGOs as Financial Institutions. Prior to joining Accion, Ms. Drake was a banking specialist at the World Bank and a commercial banker. She serves on the boards of the Calmeadow Foundation and Root Capital, and Root’s Peruvian subsidiary, ACCDER.
Ms. Drake is a graduate of Georgetown University and holds an MBA from Babson College. She speaks English, Spanish and Portuguese.

Vice President, Investing in Inclusive Finance Program

Deborah Drake

Eric conducts and performs financial inclusion research at CFI, helping to ensure that research leads to action. In addition to overseeing CFI&#8217;s research portfolio on financial inclusion innovation, financial capability, financial health, and digital finance, Eric will focus on stakeholder and industry engagement, partnership development, the CFI Fellows Program, Financial Inclusion Week, and the HBS Accion Program on Strategic Leadership in Inclusive Finance.
Prior to joining Accion, Eric worked as Research Director at Microfinance Opportunities, where he completed 14 research projects in Central America, South and Southeast Asia, and Southeastern Africa, producing analysis from surveys with up to 30,000 interviews. During that time, he worked on data management tools to increase research productivity, and directed a multi-country team of up to 60 people. He has also worked as a consultant for the U.S. Agency for International Development, a research assistant, and a math teacher.
Eric holds a Master’s in Public Administration from Syracuse University, and a Bachelor&#8217;s Degree in Economics and Political Sciences from the University of Nevada.
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Senior Research Director 

Eric Noggle

Pablo managed CFI&#8217;s research projects on financial inclusion topics as diverse as client consumer protection, financial capabilities, financial health and human centered design for digital credit innovations.
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Former Research Manager

Alexandra (Kobishyn) Rizzi is the Senior Director of the Smart Campaign and works closely with the Vice President on Campaign strategy, communications and management.  Prior to joining Accion, Alex was a Project Development Manager at Innovations for Poverty Action where she helped create the Microsavings and Payments Innovation Initiative (now part of the Global Financial Inclusion Initiative), a research fund focused on rigorous impact evaluations of savings products and payment systems.  She has also worked at the Centre for Micro Finance at IFMR Research in Chennai India, where she was the Head of Knowledge Management and Dissemination and contributed to the launch of the Microfinance Researchers Alliance Programme (MRAP).
Alex holds a bachelor’s degree in political science from Princeton University, and a Master of Science in Foreign Service from Georgetown University where she focused on international development and was part of the business diplomacy program.
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Senior Director, The Smart Campaign 

Our Experts

Benin’s microfinance industry continues to grow and the country boasts the largest number of institutions in the West African Economic and Monetary Union (WAEMU). Between May-October 2014, BFA conducted qualitative and quantitative data collection, guided by a National Advisory Council chaired by the Alafia Network. What did client voices in Benin tell us?

Benin’s Client Voice research includes the voices of over 1,500 current and former microfinance clients to understand the market’s consumer protection challenges. The Smart Campaign selected Benin as the African market for the Client Voices project for several reasons. First was the need for more demand-side research in Francophone West Africa, as relative to Anglophone East Africa. The Campaign also believed that the relevance of the Benin findings would likely extend beyond the country itself to the other seven members of the West African Economic and Monetary Union (WAEMU) given their operating under a common regulatory regime. Finally, Benin was selected because of the engagement of local stakeholders such as the Consortium Alafia – a 34-member local microfinance association.
<blockquote>Transparency, fair and respectful treatment of clients, and complaint resolutions mechanisms are the key consumer protection concerns for clients in Benin.</blockquote>
From May – October 2014, Bankable Frontier Associates (BFA) and its local research partner the Centre pour L’Environment et le Developpement en Afrique, Benin (CEDA Benin) carried out qualitative and quantitative research. The quantitative survey reached 1,733 Beninois (1,028 current MFI clients, 526 former clients, and 179 non-clients).

Key client protection risks emerged around the issues of transparency, fair treatment and complaint resolution mechanisms. Addressing these concerns requires a market-level approach that takes into consideration the unique role that regulators, the MFI industry, and clients themselves each must play. This page contains the results of the initial qualitative research, the follow-up quantitative survey and the final country report which weaves both pieces together. Finally the page has a link to the raw, anonymized data from the quantitative survey along with the survey instrument so that fellow researchers and client protection data wonks can play draw their own conclusions.

Client Voices: Benin Country Report

Georgia’s microfinance industry’s robust regulatory framework is undergoing reform. The Consumer Protection Division is in the process of becoming an independent agency, highlighting the country’s ongoing dedication to client protection. The reform makes the Client Voice report research timely. Between March and July 2015, BFA conducted qualitative and quantitative research to determine the concerns of microfinance clients in Georgia. What did client voices in Georgia tell us?

Georgia Client Voice research included the perspectives of 1,000 current and former microfinance clients to identify the consumer protection impediments that persist in the country. The Smart Campaign selected Georgia as the market in Eastern Europe and Central Asia for the Client Voices project for several reasons, primarily because of the current regulatory reform at the national level. As the Consumer Protection Division becomes its own entity, operating outside of the regime of the National Bank of Georgia, this research will enrich the discussion and inform the next steps in the country’s consumer protection arena. The building blocks for a thriving industry are already set, including a credit bureau, CreditInfo. Regulators, local partners, and microfinance institutions all have a role to play to raise awareness among clients and cement customer protection in the industry.
<blockquote>Top concerns among microfinance clients in Georgia are: over-indebtedness, appropriate product design and delivery, and transparency.</blockquote>
Various research methods were implemented in the qualitative phase, including focus group discussions, individual in-depth interviews, and a photography exercise to gain a deeper and contextualized understanding of clients’ views of good and bad treatment. The quantitative sample consisted of 800 currently clients and 200 former clients, 59 percent of whom were women.

The research finds that the majority of clients, around 66 percent, are happy with their institutions and thus stay with their institutions for a long time. Primarily, microfinance institutions’ service and treatment was ranked as matching or exceeding commercial banks. However, clients’ understanding of terms and conditions is still lacking, especially around the high risks associated with taking loans in U.S. Dollars.

Client Voices: Georgia Country Report

Pakistan has a thriving microfinance sector and one of the most enabling regulatory environments among microfinance markets globally. From March to October 2014, BFA conducted qualitative and quantitative research in the provinces of Punjub and Sindh, the regions most saturated with microfinance. What did client voices in Pakistan have to tell us?

Pakistan’s Client Voice research includes the voices of roughly 1,000 current and former microfinance clients to identify consumer protection challenges in the country. The Smart Campaign selected Pakistan as the market in Asia for the Client Voices project for several reasons. Notably, a priority objective of this research is to catalyze industry discussion, which requires strong and engaged local partners. The Pakistan Microfinance Network (PMN) has long-demonstrated its leadership and commitment to client protection among its members and was a natural partner for this exercise.
<blockquote>Top concerns among microfinance clients in Pakistan are transparency, fair and respectful treatment of clients, and mechanisms for resolving complaints.</blockquote>
Between March and October 2014, Bankable Frontier Associates conducted qualitative and quantitative research. The qualitative portion included individual interviews as well as participants taking photographs that represented their positive and negative experiences with microfinance. On the quantitative end, over 900 clients and 100 former clients participated in a survey expressing any concerns related to microfinance practices.

The research confirms Pakistan’s advanced consumer protection ecosystem while underlining the issues that persist. Key client protection risks emerged around the issues of harsh treatment of clients, inflexibility in the case of late repayment, and unclear terms and conditions. Unlike other markets, the regulatory environment for the microfinance industry is well-developed in Pakistan with the Credit Information Bureau (MF-CIB) exclusively monitoring activity.

Building on the country’s strong regulatory environment and addressing these client protection concerns requires a market-level approach that takes into consideration the unique role that regulators, local partners, microfinance institutions, networks, and clients themselves each must play.

Client Voices: Pakistan Country Report

Peru has the most conducive environment for microfinance, as evidenced by its top position in the 2015 Global Microscope for its  leading client protection regulatory frameworks. From January through July 2015, BFA conducted qualitative and quantitative research in Peru to determine the biggest concerns of microfinance clients. What did client voices in Peru tell us?

Peru’s Client Voice research included the perspectives of 1,000 current and former microfinance clients to identify consumer protection challenges and opportunities in the country. The Smart Campaign selected Peru as the market in Latin America for the Client Voices project because of its strong consumer protection regulations, recourse mechanism, and well-functioning credit reporting system.
<blockquote>The top concerns that emerged for clients in Peru are prevention of over-indebtedness, transparency, and fair and respectful treatment of clients.</blockquote>
Between January and July 2015, Bankable Frontier Associates (BFA) and Datum International, a local research firm, conducted qualitative and quantitative research. Peruvian clients of savings and loan institutions, cooperatives, and NGOs offering group loans participated in the qualitative research. The quantitative research included 550 current clients and 450 former clients.

Peru has a favorable environment for financial services, in recent years earning the top spot in the Economist Intelligence Unit’s Global Microscope rankings. Although a strong government consumer complaints institution (INDECOPI) exists, over-indebtedness, transparency, and fair and respectful treatment emerge as the most prevalent concerns for clients in Peru. Addressing these concerns requires a market-level approach that takes into consideration the unique role that regulators, the microfinance industry, and clients themselves each must play.

Client Voices: Peru Country Report

Keeping focus on who matters most in financial inclusion

Keeping Clients First

Client Voice Research

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>.

Inclusive Insurance: Closing the Protection Gap for Emerging Customers

Mainstreaming Financial Inclusion Series

Finance for All

Global Findex

Financial Health

Global Microscope

Keeping Client First

Explore Report Series

Institutional partnerships make our research possible.

Susy Cheston

This report illuminates the market opportunities and challenges associated with expanding coverage to underserved customer segments and the efforts insurers and banks around the world are making to help them manage and mitigate financial risk.

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Research