Technology and outreach
Formal financial service providers face high costs when attempting to bring services to remote rural areas. Low density populations and poor roads make transaction costs high and typically the local economies are characterized by low levels of cash liquidity, seasonality of incomes, highly segmented markets and increased covariance risk. However, new technologies are redefining the possibilities, and increasing numbers of financial institutions - commercial banks, development banks and some microfinance organisations – are experimenting with mobile banking, automated teller machine (ATM) networks, smart card operations and other methods of providing low cost services.

Library Resources

resource title type year resource
Blockchain, Fintechs and their Relevance for International Financial Institutions Paper 2019

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This resource appears in: Technology and outreach

The purpose of this working paper is to provide a primer on financial technology and on Blockchain, while shading light on the impact they may have on the financial industry. FinTechs, the financial technology and innovation that competes with traditional financial methods in the delivery of financial services, has the potential to improve the reach of financial services to the broader public and facilitate the creation of a credit record, especially in the developing world. Some Blockchain applications like cryptocurrencies, could be problematic as cryptocurrencies cannot substitute traditional money due to the high risk of debasement, luck of trust and high inefficiencies relating to the high cost in electricity and human effort required to clear cryptocurrency transactions. Cryptocurrencies’ high volatility renders it a poor means of payment and store of value, while resembling a fraudulent investment operation. Yet, other Blockchain applications, like Blockchain securities, could facilitate the functioning of an International Financial Institutions (IFI) due to the volume of securities they issue as Blockchain securities enable an almost instantaneous trade confirmation, affirmation, allocation and settlement and reconciliations are superfluous releasing collateral to be used for other purposes in the market. IFIs could promote awareness and understanding about Blockchain technology among different IFI services and launch Blockchain labs in order to pilot projects that can improve governance and social outcomes in the developing world.

Author E. Davradakis & R. Santos
Publisher European Investment Bank
Number of Pages 40 pages
Primary Language English (en)
Region / Country Global
Keywords Capital Markets, Access To Finance, Mobile Banking
Related Resources
Taxing Mobile Phone Transactions in Africa: Lessons From Kenya Brief 2019

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This resource appears in: Technology and outreach

The taxation on mobile phone-based transactions and on airtime has been introduced in Kenya and is spreading to other African countries. Some countries in sub-Saharan Africa view mobile phones as a booming sub-sector easy to tax due to the increasing turnover of transactions and the formal nature of such transactions by both formal and informal enterprises. The increasing tax burden on the sub-sector and the consumers, though, has raised concerns that the massive gains made in financial inclusion in developing countries made possible by retail electronic payments platform via mobile phone transactions may be reversed—resulting in a return to cash transactions.

This paper shows that taxation on mobile phone airtime and financial transactions may not expand the tax base significantly but, rather, may reverse the gains on retail electronic payments and financial inclusion. A higher tax rate on low-level retail electronic transactions mostly levied on low-income earners that are sensitive to transaction costs may discourage the use of mobile phone-based transactions, incentivizing them to revert to cash transactions to evade taxes and so less tax revenue. This trend will deal a big blow to the financial inclusion success witnessed so far.

The data so far available shows that the contribution of mobile money-related taxes is less than one percent of total tax revenue, a negligible contribution to Kenya’s total tax income, at high economic costs. These lessons are not just relevant for Kenya but also for other countries in Africa with such tax propositions. Introducing and increasing taxes on mobile phone transactions may risk stalling progress on digitization and fiscal policy design as well as revenue administration.

Capturing Our Impact: Harnessing Innovation for Financial Inclusion Book 2019 English (en)

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This resource appears in: Technology and outreach, Inclusive finance

This e-book shows the transformative effect that technology and innovation has on the lives of the most vulnerable. The book contains impact stories, videos and photos that put faces behind the numbers and illustrate that digital innovation does not only unlock basic life-changing financial services for low-income people but also serves as an enabler for delivering clean water, solar energy, education, and more. This e-book is a product of the program Harnessing Innovation for Financial Inclusion (HiFi), the World Bank Group’s partnership aimed at scaling up financial inclusion on a sustainable basis through technology and innovation and funded with UK aid from the UK government. 

The e-book highlights cases which push the boundaries of what is possible in revolutionizing financial services through technology, particularly in the world’s most challenging markets. For example, in Ethiopia, World Bank is supporting digitization of social transfer payments for people who chronically lack adequate food through Productive Safety Net Program (PSNP). In Yemen, despite ongoing violence and severe security constraints, IFC helped Al Kuraimi Islamic Microfinance Bank (KIMB) successfully launch a mobile banking platform that allows its clients to access money when they can’t access a physical bank branch. And in Uganda, solar company Fenix partnered with CGAP to design education loan products to help its customers pay for school.

Capturing Our Impact: Harnessing Innovation for Financial Inclusion  -  English (en)

European Microfinance Award 2018: Financial Inclusion Through Technology - Digital Pathways in Financial Inclusion Paper 2019

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This resource appears in: Technology and outreach, Inclusive finance

The 2018 European Microfinance Award highlighted the role of technology in advancing financial inclusion, showing how technology-enabled services and solutions can help financial services providers such as microfinance institutions increase outreach to low-income and vulnerable segments. The 2018 Award invited applications from financial services providers (FSPs) that use technology innovations to expand outreach, broaden product offerings, improve the client experience, and increase operating efficiency, all guided by an unwavering focus on socially responsible finance.

This publication draws on the technology initiatives of the winners and semi-finalists of the 2018 Award, paving the way for how advances in technology can be adopted by financial services providers who serve the excluded.

Author Sam Mendelson, Lucia Spaggiari, Chiara Pescatori, Gabriela Erice, Gemma Cavaliere & Daniel Rozas
Publisher European Microfinance Platform (e-MFP)
Number of Pages 44 pages
Primary Language English (en)
Region / Country Global
Keywords digital financial services
Related Resources
Smart Mass Payments: Bulk Payments Made Easy Paper 2019

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This resource appears in: Remittances and payments, Technology and outreach

Smart Mass Payments: Bulk Payments Made Easy

This white paper was developed by the UN Capital Development Fund (UNCDF) in collaboration with various stakeholders in the digital financial services (DFS) industry, in order to highlight the potential for digital bulk payments as (i) a viable business tool to conduct mass payments in Zambia; (ii) a sustainable business case for DFS providers; and (iii) an inclusion mechanism for the financial- and economic-empowerment of users.

The key objectives of the research underpinning this paper were the following:

- Gather quantitative and qualitative insights on the market for digital bulk payments in rural and peri‑urban areas of Zambia as well as in refugee settlements.

- Collect insights for the development of a go-to-market strategy for digital bulk payments, including critical success factors for their deployment, by interviewing and engaging with potential partners (payers) and end beneficiaries (payees).

- Obtain insights on actual and potential use of digital bulk payments as well as customer preferences for bulk payment services.

- Gain insights on awareness of and trends in bulk payments among companies and other potential payers.

- Recommend ways in which DFS providers, bulk payers and other stakeholders, including government and development partners, can promote the expansion of appropriate, affordable and accessible bulk payments.

More than 115 interviewees from 22 organizations, comprising government regulators, ministries and agencies as well as private sector stakeholders, were consulted during the period of data collection: July 2017 to November 2018. Ten focus-group discussions were conducted with potential and existing payees in various locations across Zambia.

Author Nandini Harihareswara, Zerubabel Junior Kwebiiha, Brian Paul Katimbo, o Bezant Chongo
Number of Pages 32 pages
Primary Language English (en)
Region / Country Africa
Zambia
Keywords digital bulk payments, DFS
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The Case for Responsible Investing in Digital Financial Services Case Study 2019

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This resource appears in: Technology and outreach

These guidelines leverage IFC’s significant experience with the Equator Principles and responsible investing in micro, small, and medium enterprises (MSMEs) by focusing on strengthening governance, risk management, consumer protection, and financial well-being for the unbanked and underserved—as well as IFC’s experience as advisor and investor in the digital finance space.

Author M. Biallas, M. Aijazuddin, L. Camba Opem
Publisher IFC
Number of Pages 8 pages
Primary Language English (en)
Region / Country Global
Keywords Consumer Education and Protection, Financial Inclusion, digital finance
Related Resources
Mobile Money: Key Success Factors of a National Financial Inclusion Strategy Paper 2019

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This resource appears in: Technology and outreach

Blueprint for policymakers on maximizing the benefits of mobile money

Many national financial inclusion strategies (NFIS) recognize and leverage the power of digital technologies in achieving financial inclusion targets, and as more countries continue to make financial inclusion commitments, the fruits of NFIS in driving regulatory reforms are increasingly apparent.

By drawing examples from different countries, this paper highlights key enablers of a successful NFIS for mobile money, which include:

  • High-level project sponsorship.
  • Project planning.
  • Issue framing for excluded groups.
  • Stakeholder mapping.
  • Governance and implementation structures.
  • Public participation/stakeholder engagement.
  • Monitoring and evaluation (M&E).
  • Strategy refresh.
Agency Banking in Uganda: A New Channel to Increase Financial Inclusion 2019

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This resource appears in: Technology and outreach

Agency banking offers the potential to increase and deepen financial inclusion across Uganda. Following regulations passed in July 2017, banks in Uganda can use agency banking—an extension of services traditionally offered in bank branches whereby third parties (agents) o er these services on behalf of banks—to expand their presence, particularly in rural areas where brick-and-mortar branches are often expensive. For instance, estimates indicate that over 9 million Ugandans need to travel more than an hour to access a bank branch.1 For customers, agency banking means reduced travel time as well as greater access to and increased convenience of formal financial services.

Since 2014, the UN Capital Development Fund (UNCDF) has focused on improving access to financial services in Uganda through its MM4P programme. Core to this effort has been an initiative to support leading banks to implement agency banking as an alternative delivery channel. To do so, UNCDF partnered with five banks on projects between September 2016 and July 2018, providing technical assistance grants in addition to facilitating expert guidance through consultancy firms as the banks designed, piloted, and rolled out agency banking in Uganda.

This publication captures experiences from these projects, exploring key expectations, the status of digital financial services in Uganda before launching agency banking, regulatory aspects of the projects, insights from the projects, and future considerations. It also shares valuable lessons and recommendations that the projects revealed about agency banking regarding banks, agents and customers.

Fintech: The Experience so Far 2019

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The IMF and the World Bank Group launched at the 2018 Annual Meetings the Bali Fintech Agenda (BFA), a framework of high-level issues that countries should consider in their own domestic fintech policy discussions. The BFA is organized around a set of twelve elements aimed at helping member countries to harness the benefits and opportunities of rapid advances in financial technology that are transforming the provision of financial services, while, at the same time, managing its risks.

This paper is a follow up to the BFA and takes stock of country fintech experiences and identifies key emerging trends and policy issues confronting member countries and the international community, in light of the rapid transformation brought about by fintech and the rising engagements of the IMF and the World Bank regarding fintech-related issues and within their respective mandates.

Publisher International Monetary Fund (IMF), World Bank
Number of Pages 73 pages
Primary Language English (en)
Region / Country Global
Keywords FinTech, digital financial services
Related Resources
Blockchain: Opportunities for Private Enterprises in Emerging Markets Paper 2019

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This resource appears in: Technology and outreach

Blockchain is an emerging technology that offers the possibility of re-engineering economic models and enabling the creation of markets and products that were previously unavailable or unprofitable across emerging markets. This report is intended to introduce readers to current developments in distributed ledger technology, or blockchain, with the vantage point of possible benefits to emerging markets. The first six chapters were written a year ago, while the last three are more recent and bring the perspective of a year of development in the nascent technology. Chapter 1 provides an overview of blockchain technology, followed by a look at its unfolding applications in emerging markets in Chapter 2. Chapter 3 examines whether blockchain can be used to mitigate de-risking by financial institutions. Chapters 4 and 5 look more closely at the financial services sector, including an overview of how blockchain fits into the spectrum of financial technology (fintech) innovations and the resulting provision of financial services (Chapter 4), and an analysis of blockchain’s contribution to reaching the unbanked and underbanked in various emerging markets, including in Latin America, Asia, and Sub-Saharan Africa (Chapter 5). Chapter 6 looks beyond fintech to explore how developments in applied blockchain technology can impact agribusiness, drug safety, and more generally provide enforcement tools to promote the reach of sustainable and inclusive business. Chapter 7 discusses the proper regulatory environment needed to stimulate competition and investment in blockchain technologies in emerging markets and beyond. Chapter 8 examines the potential of blockchain to accelerate the transition to low-carbon energy solutions in these countries. Chapter 9 offers a review of legal issues associated with the use of blockchain and how these can be addressed.

Author Miller, Douglas; Mockel, Peter; Myers, Gordon I.; Niforos Marina; Ramachandran Vijaya; Rehermann Thomas; Salmon John;
Publisher International Finance Corporation (IFC)
Number of Pages 88 pages
Primary Language English (en)
Region / Country Global
Keywords Distributed Ledger Technologies; Blockchain
Related Resources
Basic Business Models for Banks Providing Digital Financial Services in Africa Report 2019

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This resource appears in: Business planning, Technology and outreach

Digital Financial Services have progressed rapidly since the first mobile-money services in East Africa a decade ago. Their early success in Kenya and Tanzania sent telecom firms, banks, technology firms, and development institutions scrambling to launch similar services. Yet many or most of these new services found only limited success of their own. The process delivered valuable lessons to the industry, however, including insights about scale, effective engagement models, the importance of adopting new technologies and rethinking corporate cultures, and the need for new digital financial services and products.

Client Voices: Rwandans Speak on Digital Financial Services Report 2019

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The Smart Compaign, 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.

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.

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.

 

 

Author Emily Farbrace; Loes van der Velde; Medha Sethia and Alexandra Rizzi
Publisher Center for Financial Inclusion at Accion
Number of Pages 68 pages
Primary Language English (en)
Region / Country Africa
Rwanda
Keywords Agent Banking, Client, digital credit, Telcos, Privacy, P2P
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API Pricing for Digital Financial Service Providers: Getting Started Guideline 2019

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This resource appears in: Technology and outreach

Digital financial services (DFS) providers face several challenges when developing pricing strategies for open application programming interfaces (APIs). They must balance their own business objectives, including the need to achieve a return on investment, with the needs of API consumers to experiment and learn as they build and grow their businesses.

This Technical Note aims to help DFS providers navigate these challenges and devise pricing strategies that:

  • Support the DFS provider to achieve specific business objectives.
  • Generate business value for each target API consumer segment.
  • Align with (or modify) prevalent market expectations and norms for pricing.
Fintechs and Financial Inclusion: Looking past the hype and exploring their potential Report 2019

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This paper documents CGAP’s work with 18 fintech pilots in Africa and South Asia. The goal of the paper is to explain innovations in a detailed way and generate insight on whether the services (i) work as stated, (ii) create value for underserved customers, and (iii) ease age-old pain points in delivering financial services to underserved customers. A separate set of case studies describes for each pilot the service that was piloted, the nature of the testing, and emerging lessons.

The paper is written for funders - donors, investors, development finance institutions, or philanthropic organizations - who engage with fintechs to advance financial inclusion. Many early-stage fintechs that have potentially game-changing ideas are considered too risky for private capital, so they depend on patient capital from global development and impact investing communities. The lessons learned through the pilots can help funders better understand the potential impact of fintechs in the financial inclusion space and inform their funding decisions. The research identifies five types of fintech innovation that offer potential for financial inclusion, and highlights challenges that these fintechs, particularly those in early stages, face that inhibit their ability to impact financial inclusion. 

The set of case studies describes for each pilot the service that was piloted, the nature of the testing, and emerging lessons. As is the nature of start-up innovation, not all pilots were successful. In fact, few were successful in exactly the way the researchers envisioned; however they exposed valuable learnings about areas that need to be reconsidered and reworked.

Mobile-Enabled Economic Identities for Smallholder Farmers in Ghana Report 2019

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Digitizing and documenting the economic behavior of end users

The aim of this research was to investigate the financial and identity needs of smallholder farmers in Ghana and to understand the unique position of mobile network operators in developing economic profiles that are specifically designed to address the financial inclusion challenges that these farmers face.

The report highlights key research findings that show how the ubiquity of mobile technology has created a platform for gathering, storing and processing data on the economic behaviors of end users, including smallholder farmers. Such platforms enable significant benefits to those who struggle to access formal financial services due to the fact that their financial history is comprised of economic behavior that is cash-based, varied, inconsistent and undocumented.

The research consisted of a mix of end-user focus group discussions, surveys and interviews with stakeholders that engage with this value chain, and aimed to answer the following questions:

  • What types of identity documents are available to smallholder cocoa farmers in Ghana in practice, and which ones are accepted as valid forms of identity when farmers need to access specific services?
  • What are the challenges of driving the use of digital financial services, from both a supply and demand perspective?
Pathways to a Better Life: The Intricate Role of Digital Finance in Reaching the Sustainable Development Goals Paper 2019

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Under the Impact Pathways project, UNCDF set out to explore the connection between financial service use cases and the Sustainable Development Goals (SDGs), in the hope of illuminating the multiple ways that formal financial service users might be experiencing impact. This focus note discusses the logic, conceptual framework, caveats and detailed methodology behind this new approach to mapping the thorny trail between the use of financial services and the SDGs.

Ultimately, the goal is that this conceptual framework and methodology offers a way to envision the journey from usage of financial instruments to achievement of the SDGs and can show the pathways by which financial inclusion efforts are improving the lives of low-income people. For many stakeholders, this framework and measurement methodology might be a way to both establish potential pathways and measure progress along them, providing increasing evidence as to how finance can ultimately help improve peoples' lives.

Author Daryl Collins, Liz Larson & Abby Butkus
Publisher United Nations Capital Development Fund (UNCDF), BFA
Number of Pages 13 pages
Primary Language English (en)
Region / Country Global
Keywords digital financial services
Related Resources
A G7 Partnership for Women’s Digital Financial Inclusion in Africa Report 2019

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This resource appears in: Technology and outreach, Gender

African governments are at the forefront of efforts to harness digital technologies to build more inclusive economies. Double-digit growth in mobile phone ownership in the first half of this decade has triggered a surge of innovative digital tools and services across the continent. However, the benefits of the digital age are not being shared equally. Women—especially those living in poor and marginalized communities—are most likely to be on the wrong side of a persistent digital divide.​

This report is a blueprint for closing that gap of 400 million and creating a world that is both more prosperous and more equal for everyone. It draws on the lessons Bill & Melinda Gates Foundation has learned about financial services for the poor since it started investing in the area about 15 years ago. It identifies five key ways in which G7 countries can support African countries as their leaders seek to include more than 400 million people in the digital economy for the first time.

  1. Build an interoperable digital payment infrastructure so that you can transact with anyone else, even if you have different service providers.
  2. Build equitable digital identification systems that cover each and every individual on the continent, giving all people the formal proof of identity they need to open and use financial accounts.
  3. Update financial regulations to make space for digital products and services while keeping the financial system secure.
  4. Help countries identify investments and policies that enable them to maximize the social and economic returns from digital technologies and infrastructure while minimizing potential harms.
  5. Research the best ways to design digital financial systems and deliver digital financial services to maximize gender equality.
FinTech and market structure in financial services: Market developments and potential financial stability implications Report 2019

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As FinTech firms, BigTech firms, and the markets for third-party services continue to develop, it will be important to continue monitoring these developments and their financial stability implications. Further efforts on third-party dependencies are ongoing in the Basel Committee on Banking Supervision (BCBS) and International Organization of Securities Commissions (IOSCO). The Financial Stability Board (FSB) Financial Innovation Network (FIN) is further exploring the market for third-party services for financial institutions, including how they manage lock-in risk and cross-border issues. Moreover, FIN is looking into the activities of BigTech in finance, including cross-border activities.

Charting the Customer Journey in the Digital Age Report 2019

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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. How are mainstream financial institutions creating effective digital customer journeys for underserved clients?

This report explores the three primary phases involved in digital transformation and provides examples of how innovative financial institutions are addressing its challenges with creative solutions for emerging customers.

Author Pablo Anton-Diaz and Amin Khairy
Publisher Center for Financial Inclusion at Accion
Number of Pages 15 pages
Primary Language English (en)
Region / Country Global
Keywords Client Research, Product Development, digital financial services
Related Resources
Digital Transformation of MFIs in Bangladesh Report 2019

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This resource appears in: Microfinance institutions, Technology and outreach

In 2017/18 the United Nations Capital Development Fund (UNCDF) undertook the first comprehensive review of micro-merchants in Bangladesh engaged in the retail sector, particularly in Fast Moving Consumer Goods (FMCG) operating mostly in rural areas.

The Landscape Assessment of Retail Micro-Merchants in Bangladesh showed that retail micro-merchants require access to financial services, and credit in particular. Their need for financial services is high, and microfinance institutions are well-placed to meet the growing credit needs of micro-merchants. Micro-merchants predominately borrow roughly 68.1% of total loans from microfinance institutions. With the introduction of digital technologies, microfinance institutions have a new opportunity to further expand financial services to micro-merchants by embracing digital and mobile technologies in their operations.

Keeping the micro-merchant market segment in mind, this report answers the questions of how and why microfinance institutions should make a switch to digital technologies to better meet their customers’ needs.

Author Bhavana Srivastava, Ravi Kant, Ishita Tarun Sharma, Sivakumar Krishnan and Sonal Agrawal
Publisher United Nations Capital Development Fund (UNCDF)
Number of Pages 125 pages
Primary Language English (en)
Region / Country Asia
Bangladesh
Keywords Digital technologies
Related Resources
How Low- and Middle- Income People Experience Digital Financial Services In Malaysia Report 2019

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This resource appears in: Technology and outreach

The UNCDF Malaysia team conducted primary research with low- and middle-income customers in different parts of Malaysia in order to understand their digital and financial lives and needs. The team spoke with a wide variety of population segments, of different ages, locations, genders and employment status.

The i3 Program, funded by MetLife Foundation and implemented by the UN Capital Development Fund (UNCDF), works to catalyse the use of digital technology to achieve the financial inclusion of people with low-to-moderate income in Bangladesh, China, Malaysia and Viet Nam. In Malaysia, the programme enables service providers, including financial institutions and fintech start-ups, to introduce products and services that promote inclusive finance and improve the financial health of low- and middle-income Malaysians across the country.

The Impact of Mobile Money on Monetary and Financial Stability in Sub-Saharan Africa Paper 2019

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Analysis of mobile money's impact on a country’s macroeconomic and financial sector development

The extent to which mobile money impacts a country’s macroeconomic and financial sector development has not been fully examined. To address this evidence gap, GSMA Mobile Money and GSMA Intelligence have undertaken a study to assess the impact of mobile money on monetary and financial stability across several countries in Sub-Saharan AfricaTo achieve this, they looked at trends in a number of monetary and financial outcomes, both in countries where mobile money adoption is widespread and where uptake has been limited.

Given the broad scope of countries covered in the study, these findings can help to inform policy discussions and support dialogue between regulators, mobile money providers and other financial service providers on reforms that can promote growth in the financial sector.

The Mobile Economy 2019 Report 2019

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By the end of 2018, 5.1 billion people around the world subscribed to mobile services, accounting for 67 percent of the global population. Of the 710 million people expected to subscribe to mobile services for the first time over the next seven years, half will come from the Asia Pacific region and just under a quarter will come from Sub-Saharan Africa. This growth in connectivity is helping the mobile industry increase its impact across all the UN’s Sustainable Development Goals and is spurring adoption of mobile-based tools and solutions (for example, in agriculture, education and healthcare) that aim to improve livelihoods in low- to middle-income countries.

This report provides the latest insights on the state of the mobile industry worldwide, providing a range of technology, socio-economic and financial datasets, including forecasts out to 2025. The paper contains the following sections:

  1. The mobile market in numbers.
  2. Mobile contributing to economic growth and addressing social challenges.
  3. Key trends shaping the mobile industry.
  4. Policies for digital advancement.
Data-Driven Segmentation in Financial Inclusion Guideline 2019

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Financial services providers can improve their businesses by using segmentation to develop a more accurate understanding of their customers. Segmentation can benefit providers in many ways:

  • Stronger and deeper customer relationships.
  • Improved product uptake.
  • Greater awareness of new product opportunities.
  • Flexibility and agility to adapt to customers’ needs.

This guide shows providers how they can use data analytics to understand their customers by performing more complex analyses and extracting insights that were previously hidden as well as how they can clean up and use this data to segment customers in powerful ways. It also explains how providers can leverage a qualitative understanding of their customers to analyze the data available to them and gain useful customer insights.

Improving Distribution of Digital Financial Services in Rural Areas Paper 2019

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Digital financial services are spreading in Senegal, where more than 5 million electronic money accounts were opened at the start of 2018. However, there is a real gap between large cities and rural areas in terms of penetration. It is in this context that the UN Capital Development Fund (UNCDF) is supporting the fintech InTouch to increase the number of active digital financial service agents in underserved areas of the country.

The project intends to promote prototypes that demonstrate the existing opportunities for digital finance in the country. Through an innovative solution of “guichet unique” that allows digital finance operations with multiple service providers, more than 400 agents have been deployed in rural Senegal, among which more than 300 active agents. A qualitative research shows interesting learnings during the implementation phase.

Author Ruth Thiémélé-Kadjo & Bery Dieye Kandji
Publisher United Nations Capital Development Fund (UNCDF)
Number of Pages 4 pages
Primary Language English (en)
Region / Country Africa
Senegal
Keywords digital financial services
Related Resources
Blockchain and Associated Legal Issues for Emerging Markets Brief 2019

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Blockchain, or distributed ledger technology (DLT), is a tamper-evident and tamper-resistant digital ledger implemented in a distributed fashion.1 This emerging technology, which enables direct transactions within a ledger without need for a central authority or trusted intermediary, has the potential to re-engineer economic models and enable the creation of markets and products previously unavailable or unprofitable across emerging markets. However, in considering the potential benefits of blockchain, organizations must also consider the associated risks and how they can be managed.

These risks include jurisdictional challenges, crypto assets, privacy and data protection, double spending, and distributed denial-of-service (DDoS) attacks. Several risks have been identified and overcome at similar innovative leaps in the recent past, including the commercialization of the Internet and cloud computing. It is essential that enterprises understand all risks inherent in blockchain systems, including being able to clearly identify who is accountable and legally responsible.

Author John Salmon and Gordon Myers
Publisher IFC
Number of Pages 8 pp.
Primary Language English (en)
Region / Country Global
Keywords Distributed ledger technologies
Related Resources
The State of Digital Microfinance in Bangladesh: A Digitization Snapshot 2019 Report 2019

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This resource appears in: Microfinance institutions, Technology and outreach

The Microfinance industry in Bangladesh is growing amidst renewed competition from the banking sector and new agent banking initiatives. As the industry tackles challenges of high cost of borrowings and expansion of business, digitization of transactions is gradually starting to take precedence, which would not only help microfinance institutions increase efficiency but potentially reduce interest rates and cost of borrowing for its underprivileged borrowers.

This study focuses on the current state of digitization and the unexplored opportunities in the microfinance industry. It looks at the opportunities of digitizing transactions, the benefits that can be gained through the process and the challenges that need to be addressed in order to successfully digitize transations.

API Pricing for Digital Financial Service Providers: Getting Started Paper 2019

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This resource appears in: Technology and outreach

Digital financial services (DFS) providers face several challenges when developing pricing strategies for open application programming interfaces (APIs). They must balance their own business objectives, including the need to achieve a return on investment, with the needs of API consumers to experiment and learn as they build and grow their businesses.

This Technical Note aims to help DFS providers navigate these challenges and devise pricing strategies that

  • Support the DFS provider to achieve specific business objectives.
  • Generate business value for each target API consumer segment.
  • Align with (or modify) prevalent market expectations and norms for pricing.

 

Small Businesses and Digital Financial Services – Predictive Modelling and Segmentation for Market Sizing and Product Design 2019

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Micro, Small, and Medium-Sized Enterprises are the backbone of vibrant and dynamic economies. But they are sometimes hard for financial institutions to identify because of the methods they use to conduct their transactions. This report discusses predictive data models to help a mobile network operator, identify MSMEs in its market and better understand how to serve them. Identification and segmentation of businesses that use mobile money services provides valuable information for product design and targeted marketing.

Multiple research components generated comprehensive insights into the MSME segment in the study country. Apart from analyzing mobile money usage patterns, the team also conducted a survey with MSMEs that was used to inform the development of an MSME identification model and to study and profile businesses. This report shows that MSMEs with an individual mobile money subscription can be identified based on their mobile money transaction behavior. A significant number of high-value customers on the digital channel are formal and informal businesses that transact using consumer-oriented products. Profiles and patterns emerge that help to even sub-segment MSMEs based on their usage of mobile money, their business characteristics, their financial needs, and current use of formal banking services.

Advancing Digital Financial Inclusion in ASEAN : Policy and Regulatory Enablers Report 2019

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Digital financial services (DFS) have the potential to overcome barriers to full financial inclusion (GPFI 2016; GPFI and G20 2017). A high percentage of the population in Association of Southeast Asian Nations (ASEAN) countries lacks access to basic financial services. In most ASEAN countries, less than 50 percent of the population owns an account at a formal financial institution. Digital payment penetration in most ASEAN countries is under 40 percent, and gaps in DFS adoption are higher when considering specific indicators, such as the proportion of adults who use a mobile phone to pay utility bills or to access a bank account. The digitization of government payments (inflows and outflows) is in progress but is still in its early stages.

The Working Committee on Financial Inclusion (WC-FINC) requested World Bank support to perform a stock-taking assessment of the status of digital financial regulatory frameworks in ASEAN countries, focusing on the regulations enacted by central banks or other main financial authorities. A regulatory survey was performed to capture the status of the ASEAN countries in the digitization of financial services from a financial inclusion perspective. The G20 (Group of 20) High-Level Principles for Digital Financial Inclusion was also used as reference.

This report focuses on the policy and regulatory aspects of DFS in ASEAN countries and will serve as a background for the work of the WC-FINC. Chapter 1 presents the methodology and scope of this report, and chapter 2 describes some features of the region’s DFS market context. Chapters 3 and 4 analyze ASEAN policies and regulations for DFS, and chapter 5 highlights some regulatory issues regarding emerging topics important to DFS expansion. Chapter 6 finishes the report by summarizing the main findings, challenges, and opportunities that the region faces going forward.

Author Aviles, Ana Maria; Sitorus, Djauhari; Trujillo Tejada, Veronica Paola
Publisher World Bank Group; Association of Southeast Asian Nations
Number of Pages 84 pages
Primary Language English (en)
Region / Country Asia
Keywords digital financial services, mobile money, Financial Inclusion, ASEAN
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Leveraging Technologies to Improve the Quality and Maximize the Productivity of Agent Models Report 2019

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This resource appears in: Loans and Lending Procedures, Savings and deposits, Technology and outreach

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.

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.

Autors 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, autors anticipate that in a future financial services ecosystem that is digital and cashless or cash-lite, authors will see the role of the agent evolving from transaction processors to solution providers.

Author Jacqueline Foelster; Amin Khairy
Publisher Center for Financial Inclusion at Accion
Number of Pages 24 pages
Primary Language English (en)
Region / Country Global
Keywords Agent Banking, Financial technology, Fintechs, Telcos
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FinTech in Sub-Saharan African Countries: A Game Changer? Paper 2019

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Policy measures are needed to reap the potential benefits of FinTech while managing associated risks. First, policymakers need to fill the large existing infrastructure gap in the region, starting with electricity and internet services. Second, there is a need to address the perennial race between fast-moving innovation and the slower pace of regulation. Third, policymakers should look beyond the potential benefits of FinTech in just the financial sector to consider the possible impact on employment and productivity, the digital economy, and more broadly, the scope for much needed structural transformation.

Author A. Sy, A. Massara, H. Perez-Saiz
Publisher International Monetary Fund (IMF)
Primary Language English (en)
Region / Country Africa
Keywords FinTech, Financial Inclusion
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Risk-Based Supervision in Low-Capacity Environments Paper 2019

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This resource appears in: Risk management, Technology and outreach

This paper is a supplement to the official and peer reviewed CGAP Technical Guide: A Guide to Supervising E-Money Issuers (EMIs), which aims to provide general guidance to supervisors designing proportional approaches to EMI supervision and drafting or improving EMI supervision manuals, while highlighting that a risk-based methodology would help EMI supervisors develop a proportional approach.  This paper summarizes the findings of our research on available guidance and challenges observed in emerging markets regarding the implementation of risk-based supervisory approaches that aim to support responsible financial inclusion, especially in the context of digital financial innovations. The paper also includes an illustrative case study on the Philippines and recommendations on areas for future work by the international community.  

    Disclaimer

    This work was funded in whole or in part by CGAP. Unlike CGAP's official publications, it has not been peer reviewed or edited by CGAP, and any conclusions or viewpoints expressed are those of the authors, and they may or may not reflect the views of CGAP staff.

    Potential Use Cases of Cryptocurrencies by Posts: A White Paper on Postal Financial Inclusion Paper 2019

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    This resource appears in: Remittances and payments, Technology and outreach

    The Post has held a central and trusted role in society over the last few centuries. It has done so by leveraging one of the largest physical distribution networks in the world offering unprecedented last mile access to deliver postal, social, and financial solutions. Posts are well positioned to address the main challenges that impede financial inclusion and studies have shown that Posts are comparatively better positioned than other financial institutions to provide financial services to segments of the population that tend to be excluded.

    There are already some examples of Posts around the world leveraging or experimenting with distributed ledger technology (DLT) to provide financial and logistics services. This white paper explores some of the current and potential use cases of DLT, blockchain, and cryptocurrencies by Posts

    Author Saleh Khan
    Publisher Universal Postal Union
    Number of Pages 13 pages
    Primary Language English (en)
    Region / Country Global
    Keywords Cryptocurrency; Financial Inclusion
    Related Resources
    FinTech in Financial Inclusion: Machine Learning Applications in Assessing Credit Risk Paper 2019

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    Recent advances in digital technology and big data have allowed FinTech (financial technology) lending to emerge as a potentially promising solution to reduce the cost of credit and increase financial inclusion. However, machine learning (ML) methods that lie at the heart of FinTech credit have remained largely a black box for the nontechnical audience. This paper contributes to the literature by discussing potential strengths and weaknesses of ML-based credit assessment through (1) presenting core ideas and the most common techniques in ML for the nontechnical audience; and (2) discussing the fundamental challenges in credit risk analysis. FinTech credit has the potential to enhance financial inclusion and outperform traditional credit scoring by (1) leveraging nontraditional data sources to improve the assessment of the borrower’s track record; (2) appraising collateral value; (3) forecasting income prospects; and (4) predicting changes in general conditions. However, because of the central role of data in ML-based analysis, data relevance should be ensured, especially in situations when a deep structural change occurs, when borrowers could counterfeit certain indicators, and when agency problems arising from information asymmetry could not be resolved. To avoid digital financial exclusion and redlining, variables that trigger discrimination should not be used to assess credit rating.

    Author Majid Bazarbash
    Publisher International Monetary Fund (IMF)
    Number of Pages 34 pages
    Primary Language English (en)
    Region / Country Global
    Keywords Financial technology, Financial Inclusion, Machine Learning, Credit Risk Assessment
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    Mobilising Cash and Voucher Assistance Programmes: The Case for Mobile Money Paper 2019

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    Recommendations for effective and efficient use of mobile money in humanitarian contexts

    The protraction of humanitarian crises requires innovative solutions to help ease stretched resources to enable their effective and efficient use. The humanitarian sector is rapidly increasing the amount of assistance they distribute as cash and are increasingly using or exploring digital payment systems such as mobile money to do so. Although the fastest means of disbursement at the immediate onset of a crisis is to deliver physical cash, digital options offer greater benefits longer term. 

    This report offers recommendations for both humanitarian organizations and mobile money service providers regarding the partnerships required to enable effective and efficient use of mobile money in humanitarian contexts.

    Toolkit: Access to finance for renewable energy technologies Toolkit 2018

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    Access to affordable, reliable and sustainable energy is often associated with economic development and considered as vital to alleviating extreme poverty. Yet access to clean sources of energy is still a challenge for many smallholder farmers, their families and other rural entrepreneurs. Recent advancements in renewable energy technologies (RETs) have started to make the achievement of Sustainable Development Goal 7 possible – “Ensure access to affordable, reliable, sustainable and modern energy for all”.

    Beyond technology development, the challenge now is to make these technologies accessible to rural populations. As RETs require some upfront investment, access to end-user finance is a key component to facilitate their wider adoption. In recent years, donors and financial service providers (FSPs) have increasingly been investing in demonstration projects to facilitate access to financial services for RETs. Recent experimentation offers key lessons for the design and delivery of suitable renewable energy finance options for rural populations.

    The toolkit focuses on end-user finance for renewable energy technologies for rural households, smallholder farmers, and rural micro, small and medium enterprises.​

    Author Michael Hamp, Marion Allet, Kerman Wildberger
    Publisher IFAD - International Fund for Agricultural Development
    Number of Pages 32 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Inclusive rural finance, Renewable Energy, Financial Inclusion
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    Financial Inclusion in the Digital Age Report 2018

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    How are technological innovations fostering creative new approaches to improve financial inclusion?

    This report highlights some of the central frictions that prevent greater financial inclusion and financial well-being, and associated technological innovations that are fostering creative new approaches to mitigating these frictions for individuals and small businesses globally.

    The innovations outlined in the report highlight different solutions to the three core problems across countries at different stages of development: (1) access, (2) product market fit, and (3) cost. The report does not aim to be complete but rather uses select examples of what can be achieved for financial inclusion by applying innovative business models and technology to different types of financial services for individual consumers and small businesses.

    At the end of the report, authors provide a list of 100 Fintech companies globally that are supporting “Financial inclusion in the Digital Age” across four main verticals of impact: payments, lending and related ecosystem, savings and financial planning, and  insurance.

    Harnessing the chances of digitalisation for rural development Guideline 2018

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    A practical guideline for projects and planning officers to:

    • Introduce important aspects such as equal access to ICT for women and young people
    • Capture and share lessons on applying digital solutions
    • Recommend to project managers how to plan and implement sustainable ICT4Ag business models

    The new release draws from 52 ICT4Ag solutions, which have been developed for 29 GIZ projects operating in 34 countries in Africa and Asia. It includes inspiring examples and ideas from within GIZ, lines out entry points and recommendations to fellow SNRD projects all with the aim to better integrate ICT4Ag solutions.

    It covers technical requirements and institutional considerations for integrations to stand a chance for sustainable success. At the end of its 110 pages, the guideline lists various existing ICT4Ag solutions with their respective purposes.

    A primer on blockchain technology and its potential for financial inclusion Paper 2018

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    The invention of Bitcoin in 2008/2009 gave consumers and businesses the possibility to transfer money nationally and internationally on a truly peer-to-peer basis (i.e. without a trusted central party such as a bank). Few people realised the full potential of the technology in the early days, but today blockchains are often referred to as the “internet of trust”. This term relates to the universal potential of blockchain technology, which goes beyond payment systems and enables people that do not trust each other to directly exchange (digitally representable) goods and services with each other. Today’s variety of blockchain technologies, including many crypto currencies, is impressive. Start-ups and IT incumbents are constantly reducing the speed, cost and effort it requires to transfer crypto currencies globally, while also increasing transaction capacity and offering services that go beyond payments. This discussion paper characterises the 10 biggest crypto currencies in terms of market capitalisation and explains the functioning principles of their underlying technologies. These variants of the technology are also essential for non-financial applications.
    A focus of this paper is the potential of blockchain technologies to improve (international) payments and land registries. Bitcoin-enabled payments were the first application of blockchain technology, and frictionless (international) payments are an essential part of financial inclusion. In contrast, improving land registries is a more innovative use of the technology, but the connection to financial inclusion is not straightforward. However, land registries may indeed play an important role in fostering access to credit for financially underserved people.
    Almost any technology comes with new risks, and blockchains are no exception to this rule. Although blockchains can provide a very high level of safety and immutability, it depends on the concrete design of the implementation whether this potential is realised. In addition, some blockchain technologies are very energy-intensive, which is an environmental risk. Finally, the high levels of volatility of most crypto currencies represent an economic risk for their users. National and international regulators are challenged by the rapid evolvement of the technology and should aim to mitigate its risks without compromising its potential.

    Author Ohnesorge, Jan
    Publisher German Development Institute
    Bonn
    Number of Pages 43 pp.
    Primary Language English (en)
    Region / Country Global
    Germany
    Keywords Blockchain, Financial Inclusion
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    Global Microscope 2018: The Enabling Environment for Financial Inclusion and the Expansion of Digital Financial Services Report 2018

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    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.

    Primary Language English (en)
    Region / Country Global
    Keywords Consumer Protection; Financial Inclusion
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    Finance for All: Wedded to Fintech for Better or Worse Report 2018

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    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.

    Number of Pages 52 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Financial Service Providers Risk Management Trends
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    Big Data Could Mean Big Opportunity: Why We Should Stay Excited for Data Analytics in Smallholder Finance 2018

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    This Learning Brief, the fifth in the Mastercard Foundation Rural and Agricultural Finance Learning Lab's research series, aims to provide a high-level understanding of how data analytics is used for smallholder farmers, introduce a new framework to understand the economics of data analytic investments, and highlight key innovators in the space.

    With a $150 billion smallholder finance gap, the use of data analytics could be the game change we need to serve smallholders profitably and at scale. And while early signs are promising, there is still a lot of work to be done. To bring data analytics to the next level, it will require a concerted effort from all players. Financial service providers and digital service providers will need to work together on a commercial scale to prove the business case and develop blueprints of success. Meanwhile, donors and investors will need to continue funding more and better innovative solutions to increase the possibility of innovation.

    Publisher The Mastercard Foundation Rural and Agricultural Finance Learning Lab
    Number of Pages 21 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Financial Inclusion; Data Collection; Spatial Data
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    Responsible Digital Credit: What Does Responsible Digital Credit Look Like? Paper 2018

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    Outlining the risks customers face and best practices for improving consumer protection

    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.

    This publication 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. It argues that ultimately, it will take a village to ensure that digital credit clients are protected—including governments, regulators, industry players, advocates and consumers themselves. The study offers three main activities as key to the future of what responsible digital credit looks like:

    • Industry self-regulation.
    • Certification of digital credit providers.
    • Directly empowering consumers.
    Basic Regulatory Enablers for Digital Financial Services Paper 2018

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    Digital financial services (DFS) differ from traditional financial services in several ways that have major implications for regulators. The technology enables new operating models that involve a wider range of actors in the chain of financial services, from design to delivery. The advent of DFS ushers in new providers such as nonbank e-money issuers (EMIs), creates a key role for agents in serving clients, and reaches customers who have otherwise been excluded or underserved. This in turn brings new risks and new ways to mitigate them.

    Through the research, authors aim to understand how a range of countries has addressed the four enablers in their regulatory frameworks and to see what lessons can be learned from their experience. The countries covered are Kenya, Rwanda, Tanzania, and Uganda in East Africa; Côte d’Ivoire and Ghana in West Africa; Bangladesh, India, and Pakistan in East Asia; and Myanmar in Southeast Asia.

    Mobile Money in Emerging Markets: The Business Case for Financial Inclusion Paper 2018

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    Mobile money systems offer a dual promise, as an engine for financial inclusion, and as an emerging markets business opportunity for providers. The scale of this opportunity is clearly understood; however, firms seeking to tap the mobile money opportunity are faced with a landscape of unknowns. How will the mobile money value chain work in practice? What do we know about consumer behavior?

    To answer some of these questions, and understand how digital payments providers can capture the opportunities while benefiting those without access to financial services, this research has examined the actual financial and transaction data of a sample of mobile money providers, all on a blinded basis. The benchmarking analysis focused most heavily in East Africa, but also included representative companies from both West Africa and Southeast Asia. The main findings from this research include:

    • Scale enables ultimate profitability but requires significant up-front spend.
    • Regulation can accelerate or hinder ability to grow—or make scale a prize not worth attaining.
    • Opportunities for providers will increase as mobile money business models evolve.
    • To seize current and future opportunities, providers will need to partner or acquire new skills.
    Author Philip Osafo-Kwaako, Marc Singer, Olivia White & Yassir Zouaoui
    Primary Language English (en)
    Region / Country Global
    Keywords Mobile Services; Mobile Providers; Financial Inclusion
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    Taming the Strange Beasts: Servicing and the Future of PAYGo 2018

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    Millions of people in Africa and Asia have gained access to payments, savings, and credit through digital finance. But most of them are still not able to access financing for assets that would help them to grow their incomes, mitigate shocks, and improve their quality of life—assets such as solar electricity, clean cookstoves, vehicles, and processing equipment.

    Pay-as-you-go (PAYGo) solar is the first of what we hope will be many industries that upend this dynamic. These companies provide financed solar home systems to off-grid households by connecting financing to use: when users make a payment, their system is activated to function during the amount of time purchased. At the end of that time, it shuts off. Once the customer has purchased the contracted amount of time, the system unlocks permanently and becomes his or her property.

    Author Daniel Waldron; Geoffrey Manley; Emma Hawkins; Alexander Sotiriou; Mathilde Girard
    Number of Pages 26 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords PayGo
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    Digital Financial Services for Agriculture: Handbook Guideline 2018

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    This handbook offers financial services providers (FSPs) an understanding of smallholder farmers and agricultural value chains, and practical guidance on how to develop and launch sustainable financial services for the agricultural sector. It surveys the current landscape in terms of existing DFS offerings in the agricultural sector, to share actual market experience and lessons learned from the pioneers in the market.

    The handbook contains approaches, examples, and tools to help FSPs understand how to engage the agriculture sector and serve a range of rural customer segments through innovative digital solutions, from farmers all the way up the value chain. Throughout this handbook, case studies are interspersed to emphasize ideas and highlight findings. These studies draw content and context from actors currently working at the intersection of DFS and agriculture. There are also reference guides, worksheets, and other materials located in the annexes. These are designed to aid readers seeking to develop or advance project planning, research, or conversations around the topic of DFS and agriculture within their organizations.

    Author Lesley Denyes, Nicholas Lesher, Meritxell Martinez, Hamilton McNutt & Mandana Nakhai
    Number of Pages 236 pp.
    Primary Language English (en)
    Region / Country Africa
    Keywords digital financial services, Rural and Agricultural Finance
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    State of the Digital Financial Services Market in Zambia, 2017 Paper 2018

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    This publication provides key insights into the state of the Zambian digital financial services (DFS) market, drawing on data collected through the 2018 UNCDF-MM4P Annual Provider Survey, and complemented by data from other sources such as GSMA and the Agent Network Accelerator Survey conducted by the Helix Institute of Digital Finance.

    The survey was developed by the UNCDF-MM4P team and administered to providers that offer digital financial solutions, including mobile money operators, banks and third-party operators in Zambia. The survey included both quantitative and qualitative questions. Quantitative data were collected on the following indicators:

    • Total number of customers, registered and active (90 days).
    • Number of unique active customers by service type.
    • Volume and value of transactions conducted by customers through customer accounts. 
    • Volume and value of transactions conducted by customers at agent locations. 
    • Number of agents, registered and active (30 days).
    • Total volume and value of transactions at agent locations.
    • Commissions paid to agents.

    Qualitative information was collected on the performance of the institutions interviewed along with their strategic focus areas, key challenges and engagement level with the UNCDF-MM4P programme in Zambia.

    FinTech for Financial Inclusion: A Framework for Digital Financial Transformation Paper 2018

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    Four pillars for a staged and progressive approach

    The full potential of FinTech for financial inclusion may be realized with a strategic framework of underlying infrastructure and an enabling policy and regulatory environment to support digital financial transformation. Drawing from experiences in a range of developing, emerging and developed countries, this research suggests that the best approach is staged and progressive, focused on four main pillars:

    1. Building digital identification and e-KYC systems to simplify access to the financial system.
    2. Digital payment infrastructure and open electronic payments systems.
    3. Combining the promotion of account opening and access with the electronic provision of government services, particularly for public transfers and payments, to scale up the use of digital finance and related services.
    4. Design of digital financial markets and systems.
    Building Inclusive Payment Ecosystems in Tanzania and Ghana Technical Note 2018

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    Building Inclusive Payment Ecosystems in Tanzania and Ghana published by CGAP, offers insight into how Digital Financial Services (DFS) transformed the financial services ecosystem in Tanzania and Ghana. The frameworks of these two sub-Saharan countries are used as case studies to understand their approach to implementing DFS within their respective economies.

    The stories are told through the lens of five key components of inclusive payment ecosystems identified by CGAP through research in each country: regulatory approach, executive commitment and investment, competitive landscape, interconnected services, and compelling use cases.

    A Primer on Blockchain Technology and its Potential for Financial Inclusion Paper 2018

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    The development of Bitcoin marked the advent of blockchain technology in 2008/2009. The pseudonymous developer of Bitcoin was the first person to solve the “double-spend problem” (i.e. the problem that simple digital files representing monetary units can be copied and spent twice). In conventional digital payment systems, the central actor (e.g. a bank) ensures that monetary units can only be spent once. By inventing a blockchainpowered solution to the double-spend problem, Bitcoin was able to create the first international payments network that does not need a central party. The crypto currency operates on a peer-to-peer basis.

    In all blockchains, transactions (or other forms of data) are bundled in blocks, which are cryptographically interlinked. Due to this, the manipulation of a certain block is visible in every block that is created on top of this block. Additionally, the blockchain is stored on the computers of a large number of network participants, so manipulation is made even harder due to the sheer number of copies of the ledger. Since the advent of Bitcoin, blockchain technology has rapidly progressed, and today hundreds of functional crypto currencies exist. In fact, blockchains are today only a subset of “distributed ledger technologies”. All functional distributed ledger technologies guarantee a high level of immutability and are stored on many computers across the network. This is not always achieved by bundling transactions in blocks, however. Nevertheless, the shorter term “blockchain” is often (including in this paper) used when distributed ledgers are meant, and the differentiation between the two terms is not relevant for the argument being made. This discussion paper gives an overview of some important forms of distributed ledger technology, using concrete crypto currencies as examples. It thereby aims to equip the reader with an intuitive understanding of the different technologies as well as their benefits and drawbacks.

    When aiming to use distributed ledgers to foster financial inclusion, it is essential to keep in mind the diversity of the technologies and their properties. Efficiency losses and a suboptimal user experience are the likely consequences of solely focussing on the most wellknown forms of distributed ledgers. Regulators should follow a proportionate approach that balances the benefits and risks of the many forms of this groundbreaking technology.

     

    Author Jan Ohnesorge
    Publisher German Development Institute
    Number of Pages 43 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Blockchain, Financial Inclusion
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    Protecting Savings Groups Reached Through High-Tech Channels: Guidance from the New Client Protection Principles for a Digital Savings Product Paper 2018

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    Desipte what now appears to be ubiquitous acceptance and excitement that the world’s poor are or soon will be transacting financially through their mobile phones, digital finance, and in particular digital savings, is still relatively new. For countries like Burkina Faso, there is still significant ground to cover in digital financial services. Seventy-one percent of the population lives in rural areas. In 2014, it was estimated that there were approximately nine internet users per 100 people in Burkina Faso, but almost 80 percent of the population had a mobile phone connection (this references the number of unique mobile subscribers, which risks double counting since it is based on the number of SIM cards, and one individual could have multiple mobile connections). The promise of digital services is significant for the rural unbanked in Burkina Faso. However, there are very few clear-cut best prac ces for designing these services. There are even fewer best practi ces when designing for client protection. This case study, from the Freedom from Hunger’s Bridge to Financial Inclusion project based in Burkina Faso, highlights the experiences of integrating client protection principles – the minimum standards microfinance clients should expect – into the initial design and roll-out of a digital savings product designed for savings groups.

    Author Brusky, B; Gray, B; Loupeda, C; de Briey, V.
    Publisher United Nations Capital Development Fund (UNCDF)
    Number of Pages 42 pp.
    Primary Language English (en)
    Region / Country Africa
    Burkina Faso
    Keywords digital financial services, Savings Groups
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    A Guide to Supervising E-Money Issuers Guideline 2018

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    Although a specialized regulatory window for e-money issuers (EMIs) has been recognized as a key regulatory enabler for inclusive digital financial services, regulation alone is not enough. It needs to be complemented by an efficient and effective supervisory regime to enforce compliance. While there is a solid body of evidence about how to regulate EMIs, much less guidance exists on how to supervise them. The role of supervision is to (i) ensure risks are identified, managed, and mitigated by EMIs; (ii) enforce compliance with regulatory requirements; and (iii) manage EMI crises. Proportional, risk-based supervision helps EMDEs keep e-money markets safe while advancing financial inclusion.

    EMIs—which could be banks or nonbanks—have, by regulation, a much more limited scope of activities than banks. By posing less risk and being less complex, EMIs warrant a lower level of supervisory attention. A key regulatory provision is fund safeguarding rules that require EMIs to back e-money liabilities with safe and liquid assets. If such fund safeguarding requirements are effectively implemented by EMIs, the risk of clients losing their money is curtailed significantly. Hence, ensuring compliance with fund safeguarding requirements is a key aspect of EMI supervision.

    This guide does not present a single recipe for the scope and depth of EMI supervision, as it recognizes the differences in risk depending on the EMIs’ scope of operations and scale and country-specific factors that may impact how EMI supervision is done. As in other areas of supervision, following a risk-based methodology is key, because it requires supervisors to allocate their scarce resources to areas of highest risk (i.e., on the most important EMIs and their highest risks). The level of supervisory intensity will vary across EMIs: offsite monitoring and enforcement of fund safeguarding rules might suffice for most EMIs while other (larger, systemic, or problematic) EMIs may require periodic, in-depth examinations. Country-specific factors such as concurrent supervisory priorities and available expertise also matter in achieving proportionality. Lastly, effectiveness in EMI supervision depends heavily on the availability of good data about EMIs and their operations.

    This guide draws on the authors’ own experiences, interviews with EMI supervisors, and available literature to provide guidance to EMDE supervisors who wish to design a proportional approach to EMI supervision. While it does not provide detailed guidance on all areas of EMI risk, it can serve as a reference for drafting or improving EMI examination or offsite monitoring manuals in the following key areas of EMI supervision: fund safeguarding, operational risk, anti-money laundering and countering of financing of terrorism, and assessment of EMI performance. The guidance, particularly the detailed examination procedures described in this paper, should be used wisely in accordance with the risk-based approach to supervision adopted in each country.

    Author Denise Dias; Stefan Staschen
    Publisher CGAP
    Number of Pages 53 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords E-Money supervising, digital money, mobile money
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    A New Kind of Conglomerate: Bigtech in China Paper 2018

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    China is seeing the rise of a new kind of conglomerate, companies that occupy unprecedented roles in the world’s second largest economy. With business models built around advanced technology and data, and with the advantages of an immense domestic market, a supportive policy environment, and ample capital, these companies are constructing a new corporate model—one with reach into virtually every sector of the economy and state. This includes financial services and digital ID systems, areas that are directly relevant for financial inclusion.

    This paper examines the role and reach of Chinese bigtech, with a view toward understanding implications of this new model for China and other markets. 

    Author Dennis Ferenzy
    Number of Pages 33 pp.
    Primary Language English (en)
    Region / Country Asia
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    Digital Finance and Data Security 2018

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    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:

    • To whom am I giving my data? And who else do they allow to access it? For what purposes?
    • How do the companies protect data so that people who do not have legitimate access cannot use or steal it?
    • What rights and options do I have if something does go wrong?

    The goal of this research, conducted by CFI Fellow Patrick Traynor, is to examine how well digital lenders are responding to these questions.

    Somali: Rapid Growth in Mobile Money - Stability or Vulnerability? Report 2018

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    Somalia’s economy grew by 2.3 percent in 2017. The economy remains vulnerable to recurrent shocks. Between 2013 and 2017, real annual GDP growth averaged 2.5 percent. Growth occurred despite adverse weather conditions that severely reduced agricultural output in late 2016 and early 2017. For Somalia to enhance and sustain economic growth and escape chronic poverty, it must increase its resilience to shocks. Growth recovery is set to continue beyond 2018, lifted by gains from ongoing reforms as well as improved security. Rising domestic demand, remittances, and donor inflows and consolidation of peace and security are expected to drive growth in 2019–20. Achieving higher growth will require acceleration of structural reforms, particularly in three areas: fiscal policy and public financial management, provision of basic services (to promote human development and inclusion), and improved resilience to weather shocks particularly in the agriculture sector. Mobile money is an essential part of Somalia’s economic ecosystem. Almost three-quarters of the population aged 16 and above use mobile money on a regular basis. It is now the main transaction instrument used by both individuals and businesses across the country: presenting an opportunity to increase access to finance, spur inclusive growth, and promote resilient communities. However, with increasing dependence on mobile money as a medium of exchange comes increased vulnerabilities.

    Launching Into Space: Using Satellite Imagery in Financial Services Case Study 2018

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    Can earth observation data be leveraged to improve smallholder finance?

    To help close the credit gap for farmers, innovative FinTech companies are testing whether earth observation data can be converted into data that financial service providers can use in credit scoring models that assess a farmers' creditworthiness. Indeed, earth observation satellites, especially in rural areas, capture data that traditional means cannot—farm crop yields, mapping of crops, geotagging farmland to specific farmers, farm diversification, planting cycles, and trends in production—and that can help forecast revenues, potential repayment deficits, and timing of income. While still nascent, emerging evidence indicates that using satellite data can reduce the transactional costs of reaching rural farmers and, ultimately, make finance more affordable for smallholder farmers.

    This case study explores the use of satellite imagery in financial services through the work of two FinTech organizations: Apollo Agriculture and Harvesting Inc. Specifically, this case study investigates how these organizations implemented earth observation technology and the journeys on which each organization embarked as they integrated satellite imagery into their business models and product offerings.

    Digital Access: The Future of Financial Inclusion in Africa Report 2018

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    The launch and growth of digital financial services has led to an unprecedented increase in the number of people enjoying access to formal financial services. Today, Africa is home to more digital financial services deployments than any other region in the world, with almost half of the nearly 700 million individual users worldwide. Mobile money solutions and agent banking now offer affordable, instant, and reliable transactions, savings, credit, and even insurance opportunities in rural villages and urban neighborhoods where no bank had ever established a branch. This is, quite literally, banking at your fingertips – for everyone. It is revolutionary.

    This publication brings to the fore the voices of Africa’s consumers, as well as those of financial services industry leaders. We believe that they offer deep and thoughtful analysis for everyone working in this area of international development. 

    Author Ann Miles; Lindsay Wallace; Ruth-Dueck Mbeba; Sebastian Molineus; Martin Holtmann; Aliou Maiga; Riadh Naouar
    Publisher IFC, MasterCard Foundation
    Number of Pages 97 pp.
    Primary Language English (en)
    Region / Country Africa
    Keywords Access To Finance, Mobile Banking
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    Mobile Money in Emerging Markets: The Business Case for Financial Inclusion Paper 2018

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    Mobile money systems offer a dual promise, as an engine for financial inclusion, and as an emerging markets business opportunity for providers. The scale of this opportunity is clearly understood; however, firms seeking to tap the mobile money opportunity are faced with a landscape of unknowns. How will the mobile money value chain work in practice? What do we know about consumer behavior?

    To answer some of these questions, and understand how digital payments providers can capture the opportunities while benefiting those without access to financial services, this research has examined the actual financial and transaction data of a sample of mobile money providers, all on a blinded basis. The benchmarking analysis focused most heavily in East Africa, but also included representative companies from both West Africa and Southeast Asia. The main findings from this research include:

    • Scale enables ultimate profitability but requires significant up-front spend.
    • Regulation can accelerate or hinder ability to grow—or make scale a prize not worth attaining.
    • Opportunities for providers will increase as mobile money business models evolve.
    • To seize current and future opportunities, providers will need to partner or acquire new skills.
    Author Philip Osafo-Kwaako, Marc Singer, Olivia White & Yassir Zouaoui
    Primary Language English (en)
    Region / Country Global
    Keywords Mobile Services; Mobile Providers; Financial Inclusion
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    How to Succeed in Your Digital Journey: A Series of Toolkits for Financial Service Providers Toolkit 2018 English (en)

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    This is the final toolkit in the series of six toolkits aimed at supporting financial service providers (FSPs) to integrate digital channels into their service delivery approaches. With this series of digital finance toolkits, a financial institution will be able to choose the best business model based on an assessment of its environment (political, economic, social, technological, and regulatory), objectives, capacity and readiness to carry out the efforts required.

    The first two business models of this framework, Toolkit #1: Use Mobile as a Tool and Toolkit #2: Be an Agent, consist in using mobile as a service where basic transactions are performed by staff of the FSP using mobile devices. Toolkit #3: Leverage an Existing Agent Network and Toolkit #4: Develop Own Agent Network describe agency banking, where agents assist clients with the transactions if needed. Toolkit #5: Create Your Own Mobile Banking Channel describes mobile banking, where clients transact directly on their financial institution account, performing the operations themselves using their mobile phones.

    Toolkit #6 describes different paths for an FSP to become a provider of mobile banking services that clients can access from their mobile phones. In this model, the ultimate objective is to digitize all operations, from collection of client data and credit applications to disbursement and repayment of loans and collection of savings.

    http://www.uncdf.org/article/3322/dfs-toolkit-6-become-a-digital-provider  -  English (en)

    Publisher United Nations Capital Development Fund (UNCDF), Mastercard Foundation, PHB Development
    Number of Pages 87 pp.
    Volume / Issue# Toolkit #6
    Primary Language English (en)
    Region / Country Global
    Keywords Mobile Banking, digital financial services
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    Mobile Money in Somalia - Household Survey and Market Analysis Paper 2018

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    73% of the population above age 16 use mobile money services, broken down as 83% in urban areas, 72% rural areas. Overall, Somalis praise Mobile Network Operators for providing much needed services in the entire country. However some do not trust them as the system remains unregulated. Mobile money is deemed fast and convenient by Somalis, with a 92% satisfaction rate. However Somalis think that mobile money can be prone to technical issues and mistakes. Users also deplore some problems with e-float management/cash-out and the lack of interconnectivity between the different mobile money services.

    Publisher Altai Consulting
    Number of Pages 27 pp.
    Primary Language English (en)
    Region / Country Africa
    Keywords Financial Infrastructure, Access To Finance, Mobile Banking, Payment Systems
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    Responsible Digital Credit Report 2018

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    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 Responsible Digital Credit, 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 Smart Campaign and was made possible by support from Mastercard Foundation and other partners.

    Publisher Center for Financial Inclusion
    Number of Pages 48 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Consumer Protection Credit Credit Provision Responsible Digital Finance
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    G20/OECD INFE Policy Guidance on Digitalisation and Financial Literacy Paper 2018

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    The digitalization of financial products and services, and the consequent need to strengthen digital financial literacy has become an important component of the global policy-making agenda. This guidance aims to identify and promote effective initiatives that enhance digital and financial literacy in light of the unique characteristics, advantages, and risks of digital financial services and channels. It also aims to support their evaluation and dissemination, and to promote a responsible and beneficial development of digitalization by building trust and confidence in the acquisition and use of digital financial services by the financially excluded.

    This guidance note offers actionable steps in the design and implementation of financial education initiatives on DFS to strengthen the digital financial literacy of consumers and entrepreneurs, in five key areas:

    1. Develop a national diagnosis of the impact of digital finance on individuals and entrepreneurs.
    2. Ensure coordination between public authorities and private and not-for-profit stakeholders.
    3. Support the development of a national core competency framework on digital financial literacy.
    4. Support effective delivery of financial education through digital and traditional means.
    5. Facilitate and disseminate evaluation of financial education programmes addressing DFS.
    Opportunities for Digital Financial Services in the Cocoa Value Chain in Côte d’Ivoire : Insights from New Data Paper 2018

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    Côte d’Ivoire has the world’s largest cocoa sector, producing over 1.4 million metric tons of raw cocoa per year, accounting for thirty two percent of world production. Harvest payments often arrive late due to the complex logistics of cash-based payments and, it is not uncommon for the amount farmers receive to be somewhat below market value due to high commissions taken by chains of intermediary middlemen. Cognizant of these costs and inefficiencies, many actors in the cocoa value chain are exploring alternatives. One such alternative is paying farmers through Digital financial services (DFS). This research focuses specifically on mobile money accounts and discusses, first, how these have already expanded financial inclusion in Côte d’Ivoire and, secondly, how mobile money could help deliver products to cocoa farmers that meet their needs. The study is a knowledge product of the Partnership for Financial Inclusion, a joint initiative of IFC and The MasterCard Foundation to expand microfinance and advance digital financial services in Sub-Saharan Africa. It is organized as follows: The first section reviews the financial inclusion landscape in Côte d’Ivoire, revealing that DFS has unusually high penetration in rural areas. The second section analyzes the specific financial behavior of cocoa farmers based on new data collected by IFC,and is followed by a third section presenting a framework for how DFS could help improve farmers’ lives. The report concludes with a call to stakeholders to keep piloting and innovating with products and payment channels that cater to the financial needs of rural communities in Côte d’Ivoire and beyond.

    Author Lonie, Susie Martinez, Meritxell Oulai, Rita Tullis, Christopher
    Publisher The World Bank
    Number of Pages 32 pp.
    Primary Language English (en)
    Region / Country Africa
    Côte d’Ivoire
    Keywords digital financial services, Cocoa
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    Growing Big While Still Small: A Case Study on Kazang Prepaid 2018

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    Sales and distribution is a difficult business because the small revenue margins mean successful companies need large operations to make a meaningful profit. Small companies that want to compete in this space must find clever ways to grow quickly with minimal staff and limited budgets. Being in this position is especially hard in an industry like digital finance, where third-party providers compete with large corporates (e.g., mobile network operators).

    Focusing on a third-party provider in Zambia, Kazang Prepaid, this case study is part of the Global Learning Agenda series of the UNCDF MM4P program in digital finance. It explores Kazang’s approach to dealing with the classic challenges impeding the expansion of profitable and sustainable agent networks in Zambia.

    Kazang has been scaling up aggressively, but the company wants to grow smarter by better understanding how to select and support successful agents as well as to offer more products. UNCDF MM4P partnered with the consulting firm HORUS Telecom & Utilities to help Kazang develop a strategy, one that includes a mobile-based application to collect information and better manage the recruitment and monitoring of its agent network.

    Growing With Pain: Digital Financial Inclusion in China Paper 2018

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    Current status and future outlook for the digital finance industry

    Active users of digital financial inclusion (DFI) have reached almost 1 billion in China. Due to various socioeconomic factors or personal reasons such as lack of financial literacy, however, DFI has yet to achieve universal coverage. A significant portion of the low- and medium-income population has yet to benefit from digital finance but has to resort to a hybrid of traditional and digital means to access financial services and still some people have no access to any financial service at all.

    This report introduces the current industry status, accomplishments and challenges, regulatory efforts and future outlook for each of the five elements of DFI, namely internet financing, digital credit service, digital payment, digital wealth management and digital insurance.

    Exploring New Frontiers in Fintech Investments in East Africa Report 2018

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    Even with the robust growth in FinTech, some questions remain unanswered - what spurred the FinTech growth? Is it scaleable? Is it sustainable? How are global economies such as India and China accommodating the FinTech disruption? This report traces back the evolution of FinTech on one of Africa’s early adopting regions, East Africa and covers the views of various voices in the ecosystem, each providing the uniqueness of the emerging sector, sub-models, their value propositions and feasibility, in an attempt to demystify this complex ecosystem. The report’s core explores the funding options currently available for the sector ranging from debt offering, grants and equity provision. With the increased success of FinTech players in East Africa, investors are keen to understand the opportunities available for capital deployment in East Africa’s FinTech space. Here, we have assessed the financing options currently available in the market for target investors. We have also explored the risks associated with the sector and how other investors deal with this. Finally, the report has explored returns available for FinTech investors in East Africa, to provide guidance on the region’s earnings potential.​

    Author Himanshu Bansal; Vineeth Menon; Nikhil Jambawalikar; Anthea Muthusi
    Publisher EAVCA
    Number of Pages 118 pp.
    Primary Language English (en)
    Region / Country Africa
    Uganda, Tanzania, Rwanda, Kenya, Ethiopia, Burundi, South Sudan
    Keywords Access To Finance, Mobile Banking, FinTech
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    Driving Digital Financial Services through High-Volume Payments Report 2018

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    The future success of inclusive digital finance depends on finding better and more affordable uses for digital wallets that will encourage low-income customers to use them regularly and repeatedly. High-volume payments (HVP) have gained industry attention as a means to drive or diversify usage, particularly among low-income customers. To better understand the prerequisites to implement HVP digitally and to unlock the opportunity of digital finance, the UN Capital Development Fund (UNCDF) has sought greater clarity on the requirements necessary for HVP to drive active account usage as well as the roles and activities of different actors involved in the digitization effort. This report combines the key observations, hypotheses and recommendations from this research. It draws on information available and insights from projects that UNCDF has implemented with partners between 2015 and 2017.

    Publisher UN Capital Development Fund (UNCDF)
    Number of Pages 20 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords mobile money, digital finance, Financial Inclusion, High-Volume Payments
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    The Tech Touch Balance: How the Best Fintech Startups Integrate Digital and Human Interaction to Accelerate Financial Inclusion Paper 2018

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    Digital technology continues to drive massive change throughout the financial sector. Acting strategically, inclusive fintech startups can use technology to increase access to, improve the quality of, or reduce the cost of financial services for the underserved. However, in too many instances, fintech startups make the same mistake time and again: they build technology for technology’s sake. These fintech models are great on paper but don’t consider the needs and preferences of their customers. They do not use new technologies strategically and fail to transform finance into a sector that works for everyone.

    This paper highlights the innovative approaches eight of Accion’s portfolio companies use to balance tech and touch. These case studies offer insights into how companies approach this question, the factors that affect their decision-making, and the outcomes that result from balancing tech and touch correctly. The companies profiled offer a range of services, work in different markets, and serve various customer segments around the world, but are all committed to delivering high-quality, affordable financial services.

    Author Coryell Stout; Amee Parbhoo
    Number of Pages 28 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords FinTech, digital finance
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    G20 Digital Identity Onboarding Paper 2018

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    A unique, legal identity is necessary to allow all individuals to participate fully in society and the economy. The ability to prove one’s identity underlies the ability to access basic services and entitlements from healthcare through to pensions and agriculture subsidies. This is especially true for marginalized segments of society such as women, poor rural farmers, refugees and also extends to MSMEs (micro, small and medium enterprises). The importance of legal identity has been acknowledged by the international community through agreement of target 16.9 of the Sustainable Development Goals, which calls for all UN member States to “provide legal identity for all, including birth registration” by 2030.

    Author World Bank Group; Global Partnership for Financial Inclusion
    Number of Pages 89 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords digital services, Digital identity, Identity for development
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    Using Satellite Data to Scale Smallholder Agricultural Insurance Brief 2018

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    How can satellite data help to reduce delivery costs of area-yield index insurance?

    Smallholder families that use agricultural insurance can increase investments in more productive farming and nonfarming ventures as they feel more confident in managing related risks. However, significantly scaling the use of agricultural insurance among smallholders has been difficult in many parts of the world, especially in Africa.

    Increasingly, satellite data are being explored to drive further innovation in smallholder agricultural insurance, as illustrated by a collaboration in Nigeria and Kenya between CGAP and Pula, an insurance and technology company that targets smallholders in Africa and Asia. This brief shares lessons from this collaboration and suggests a practical way that satellite data can be used to significantly reduce delivery costs of area-yield index insurance offered to smallholder families in Africa.

    Exploring Blockchain Applications to Agricultural Finance Paper 2018

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    The rapid pace of technological transformation across the developing world has important implications for the financial inclusion of the world’s poor. Amid this change, new technologies that enable inclusive agricultural finance have garnered heightened interest. From mobile phones to drones, digital tools may one day overcome longstanding barriers to reaching the world’s 500 million smallholder farming households.

    A Sense of Inclusion. An Ethnographic Study of the Perceptions and Attitudes to Digital Financial Services in Sub-Saharan Africa. Report 2017

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    This study aims to understand what digital financial inclusion means in different African contexts in relation to historical, cultural and social factors. It is a comparative ethnographic exploration of the usage, perceptions and attitudes towards digital financial services in Cameroon, the Democratic Republic of Congo, Senegal and Zambia that ultimately aims to give a voice to both DFS users and non-users to provide insights for financial inclusion. It focused primarily on four key research questions: What is the contextual infrastructure of digital financial services in Sub-Saharan Africa? How is the meaning of money changing due to digitization? What are the factors informing people’s perceptions and attitudes towards DFS? What is the impact of DFS on financial inclusion, beyond the numbers that measure access to formal financial accounts? Ethnographic research is qualitative rather than quantitative in nature, and the findings of this study are based on field observations, interviews, focus group discussions and archive research carried out by the research teams in all four countries.

    Author Anna Koblanck; S. Heitmann; G. Davico
    Publisher International Finance Corporation (IFC),
    Number of Pages 36 pp.
    Primary Language English (en)
    Region / Country Africa
    Zambia, Senegal, Democratic Republic of the Congo, Cameroon
    Keywords Access To Finance, Mobile Banking
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    SMS Messages for Financial Inclusion in the Dominican Republic Report 2017

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    This report was commissioned by the MIF’s Remittances and Savings Program. The objective of this regional initiative is to contribute to the reduction of household vulnerability in Latin America and the Caribbean through the design and distribution of financial products and services adapted to the needs and preferences of remittance clients. To this end, the program provides technical support to a variety of financial institutions and commissions studies to generate and disseminate information on best practices and successful models for the financial inclusion of remittance clients. The program is supported by the MIF and the Government of Australia.

    Technology Inequality: Opportunities and Challenges for Mobile Financial Services Report 2017

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    This study investigates existing and evolving technologies in MFS systems: mobile data “bearer” technologies, access platforms and user devices. The author unpacks the issues surrounding policy, pricing of bearer services, network access coverage, cost of devices, evolution of consumer-facing technology designs, security challenges, type and quality of devices being used, and the usability of various access devices. The report is meant to motivate providers, vendors and regulators to improve upon existing devices, system security and the regulatory environment as it affects the ability of BoP customers to access and use MFS effectively. It seeks to generate a discussion on the technical and related challenges faced by the MFS ecosystem and to spark action to solve these key challenges.

    Data Analytics and Digital Financial Services Book 2017

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    This is the third handbook on digital nancial services (DFS) produced and published by the Partnership for Financial Inclusion, a joint initiative of IFC and The MasterCard Foundation to expand micro nance and advance DFS in Sub- Saharan Africa. The first handbook in the series, the Alternative Delivery Channels and Technology Handbook, provides a comprehensive guide to the components of digital nancial technology with particular focus on the hardware and software building blocks for successful deployment. The second handbook, Digital Financial Services and Risk Management, is a guide to the risks associated with mobile money and agent banking, and o ers a framework for managing these risks. This handbook is intended to provide useful guidance and support on how to apply data analytics to expand and improve the quality of nancial services. 

    Author Dean Caire, Leonardo Camiciotti, Soren Heitmann, Susie Lonie, et al.,
    Publisher International Finance Corporation (“IFC”), The MasterCard Foundation
    Number of Pages 160 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords digital financial services
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    Banking in sub-Saharan Africa - Interim Report on Digital Financial Inclusion Report 2017

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    This report summarizes the discussions held in the context of the Roundtable on Digital Financial Inclusion in Africa during the 2017 EIB Africa Day, which was co-organized in Berlin on July 6th, 2017 by the EIB, Afrika-Verein der Deutschen Wirtschaft and the German Federal Ministry for Economic Cooperation and Development. It aims at providing an interim thematic update in between two editions of the EIB’s Study of Banking Sectors in sub-Saharan Africa. The EIB roundtable on Digital Financial inclusion in SSA addressed how to engage the bottom of the pyramid, including female entrepreneurs and MSMEs. There is a need to strike the right balance between leveraging opportunities and managing risks. Issues of trust, financial capability, regulation, compliance and inter-operability loom large. The role that FinTechs and banks can play in inclusive finance crucially depends on the features of the market in which they operate. Reaching the bottom of the pyramid requires client-centred innovation and the design of products targeting minorities and vulnerable segments of society, including older and disabled people and recognising gender as an additional layer of inequality.

    Author J-P. Stijns; S. Borysko; B. Marchitto
    Publisher European Investment Bank
    Number of Pages 24 pp.
    Primary Language English (en)
    Region / Country Africa
    Keywords Access To Finance, Mobile Banking
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    Fintech in Africa: Unpacking Risk and Regulation 2017

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    In May 2017, Bowmans hosted a conference in Johannesburg, South Africa, titled Fintech in Africa: Unpacking Risk and Regulation. The conference addressed the following themes: The African Fintech landscape in comparison with those of other jurisdictions; Developments and trends in Fintech regulation; Considering risk and managing fallout; Regulatory developments in relation to crowdfunding; Different jurisdictions’ experiences in relation to payment systems; Where to next for Blockchain? This document is a high-level summary of key points discussed and priorities going forward. The growing impact of digital technology in various sectors of the economy, specifically the financial services sector (as Fintech) is squarely on the agenda for regulators and supervisory bodies across the globe. In February 2017, Fintech was mentioned in the Budget Review published by the South African National Treasury and acknowledged as a relevant factor in the transformation of the financial services sector in South Africa. The fact that regulators and supervisory bodies across the world are creating ‘regulatory sandboxes’ as controlled environments within which innovation can occur is evidence that they acknowledge that Fintech presents both opportunities and challenges. Some of these challenges arise in the areas of risk and regulation.

     

     

    Banking in sub-Saharan Africa - Interim Report on Digital Financial Inclusion Report 2017

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    This report summarizes the discussions held in the context of the Roundtable on Digital Financial Inclusion in Africa during the 2017 EIB Africa Day, which was co-organized in Berlin on July 6, 2017 by the EIB, Afrika-Verein der Deutschen Wirtschaft and the German Federal Ministry for Economic Cooperation and Development. It aims at providing an interim thematic update in between two editions of the EIB’s Study of Banking Sectors in sub-Saharan Africa.

    The EIB roundtable on Digital Financial inclusion in SSA addressed how to engage the bottom of the pyramid, including female entrepreneurs and MSMEs. The panel addressed the key challenges and opportunities associated with digital financial inclusion from the perspective of consumers, SMEs, financial market players and policy-makers.

     

    Mobile Infrastructure and Rural Business Enterprises Paper 2017

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    Business enterprises and non-agricultural startups in rural economies play crucial roles in ending the vicious cycle of poverty. The propagation of business enterprises are, however, subject to a high degree of institutional frictions and vacuums e.g., information; but mobile infrastructure which has the externality of flowing information can help overcome most of these vacuums through reduced fixed costs, lower cost of information or search, and outreach to a broader customer base. This paper studies the effects of mobile infrastructure ("mobile use activity") on propagation of rural business enterprises in Niger. Instrumental variable estimates exploit the exogenous introduction of the 2013 national mandatory SIM registration reform which provides a quasi-experimental set-up for mobile use and activity. The mandate deactivated about one-third of all existing prepaid SIMs and led to a remarkable decline in mobile use activity. The results suggest that there is economically substantial effect of mobile infrastructure on propagation of business enterprises. Moving a household with mobile use activity to a no mobile use activity environment due to SIM deactivation results in roughly 33.1 percent points decline in the likelihood of engaging in non-agricultural business enterprises. Most of this effect come from three major sources: households' ownership of a business service or center; ownership of small income generating activities; and involvement in the transformation of agricultural products. There is suggestive evidence that the reform's impact is disproportionately larger for women. With the expansion of mandatory SIM registration reforms in developing countries, the findings have extended implications in these contexts.

    Data Collection by Supervisors of Digital Financial Services Paper 2017

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    Reliable, timely, complete, and readily accessible data are crucial for efficient and effective risk identification and assessment in financial sector supervision and enforcement. They are particularly important for financial supervisors in emerging markets and developing economies (EMDE) who face fast innovation and a regulatory perimeter that is getting bigger because of growing digital financial services (DFS) for financial inclusion in EMDE. Which data should the DFS supervisor collect? How frequently? In what format? Through which means? How should the DFS supervisor improve data? What aspects should be considered? Based on primary and secondary research, this working paper highlights practices in data collection for DFS supervision and the issues and emerging trends in regulatory data collection mechanisms that are relevant to DFS supervisors. It provides material for DFS supervisors to exploit opportunities created by developments such as RegTech and SupTech to rethink their approach to data collection, with the goal of strengthening supervision while fostering financial inclusion.

    Author Denise Dias; Stefan Staschen
    Publisher Consultative Group to Assist the Poor (CGAP)
    Primary Language English (en)
    Region / Country Global
    Keywords Access To Finance, Mobile Banking, Legal & Regulatory Environment
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    How to succeed in your digital journey: a series of toolkits for financial service providers Toolkit 2017

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    PHB Development, in collaboration with UNCDF MicroLead, will release a series of practical toolkits to spur digital initiatives among financial institutions eager to make headway towards digital finance yet uncertain how to go about it. These toolkits complement and capitalise on existing research and publications available to digital financial service (DFS) providers, while leveraging more than a hundred digital financial services implementations worldwide. Further, these toolkits aim at filling a knowledge gap in the sector, as existing studies on digital finance tend to give emphasis to mobile network operators and East African models, while so few are available to the Francophone community. 

    With this series of toolkits, a financial institution will be able to choose the best business model based on an assessment of its environment (‘macro-environmental’ (political, economic, social and technological) and regulatory), its objectives, capacity and readiness to carry out the efforts required.

     The goal of the toolkits is threefold:

    • Help financial institutions identify financially sustainable DFS business lines that fit their needs;
    • Provide practical tools (institutional assessment, checklists, etc.) that financial institutions can use in their journey towards digital finance to support the effective implementation of the most suitable business model; and
    • Present and learn from MicroLead partners’ and other financial institutions’ DFS experiences.
    Digital Finance: new times, new challenges, new opportunities Paper 2017 English (en)

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    Since the end of the great crisis of 2007-10, the financial services industry began a process of accelerating change. New business models based on convergent technological developments are challenging the status quo of a long-established and traditional industry. The purpose of this document is to consider the latest developments in the financial services industry and to discuss how they might affect the ability for firms--particularly small- and medium-sized enterprises (SMEs)--and individuals to access financing. It concludes that the transformative developments in the financial services industry will most likely improve and expand access of firms and individuals to finance, as well as increase formalization and financial inclusion. Some hurdles and risks that may hamper and/or delay the process are identified: the reaction of the industry incumbents, the lack of appropriate and timely regulation, the lack of access to good-quality and affordable digital connectivity (broadband access), and the unforeseen and seriously disruptive changes that might come from the payments space. To confront these risks, the public sector must define a set of proper and timely responses. The strategy for public interventions must be defined based on a deep understanding of the forces that are driving the change.

    Digital Finance: new times, new challenges, new opportunities  -  English (en)

    Regulatory Framework for Digital Financial Services in Côte d'Ivoire - A Diagnostic Study Paper 2017

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    Regulation plays a critical role in the development and spread of digital financial services (DFS). This paper offers an analysis of the regulatory framework for DFS in Côte d’Ivoire, including its coverage, its conducive features, and its gaps and obstacles. Côte d’Ivoire is a regional leader in DFS, particularly in the use of mobile money. It is a lower-middle-income country that has nearly 8 percent annual GDP growth. It has a high rate of mobile phone penetration (estimated at 113 percent), and a more modest rate of formal financial inclusion (46 percent of adults, including bank, microfinance, postal, and mobile money accounts). Mobile network operators (MNOs) have been the lead players thus far. They account for three of the five mobile money deployments and the majority of agents. MNOs have mainly partnered with banks that issue e-money. However, in the wake of recent regulatory changes, MNOs are moving to establish e-money subsidiaries. Over-the-counter (OTC) services providers, who provide affordable transfer services to clients, including those without digital accounts, are also significant. Any discussion of legal or policy matters in Côte d’Ivoire must pay close attention to the rules laid down by the West African regional institutions of which that country is a member. In this paper, we are principally concerned with the West African Economic and Monetary Union (WAEMU), a currency union and evolving free trade zone. The WAEMU’s central bank, BCEAO (Banque Centrale des Etats de l’Afrique de l’Ouest), exercises exclusive authority over the money supply and is the primary authority (with the participation of the regional Banking Commission) for the regulation and supervision of financial institutions (FIs), payment systems, and digital finance.

    Author Patrick Meagher
    Publisher Consultative Group to Assist the Poor (CGAP)
    Number of Pages 57 pp.
    Primary Language English (en)
    Region / Country Africa
    Côte d'Ivoire
    Keywords Access To Finance, Mobile Banking, Legal & Regulatory
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    Bringing E-money to the poor : successes and failures Study Guide 2017

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    South Asia plays a key role in the global development arena, with the world’s largest working-age population, a quarter of the world’s middle-class consumers, the world’s greatest number of poor and undernourished people, and several fragile states of global geopolitical importance. This study aims to identify countries that have demonstrated notable success in applying new e-money technologies and innovative thinking in providing first entry points into the financial system for poor and vulnerable population segments. Case studies are used to emphasize detailed contextual analysis of certain critical conditions and their relationships to the success or failure of these interventions. Although new technologies and innovative methodologies in the finance industry are numerous, the study narrowly focuses on e-money initiatives such as mobile money, interoperable and multifunctional automated teller machines (ATMs), and prepaid debit cards for social grant programs as the first entry points to financial inclusion. The focus is on analyzing the provision of cost-effective, reliable, and safe access to basic cash-in/cash-out, utility, and bill payment services to financially unserved or underserved people through the selected e-money interventions. This study also aims to identify new approaches to improving financial inclusion in South Asia. It documents innovative uses of technology in the form of digital financial services operating within a balanced regulatory environment that can be key to improving financial inclusion

    State of the Digital Financial Services Market in Zambia, 2016 Report 2017

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    The 2016 State of the Digital Financial Services Market in Zambia provides key insights into the state of the Zambian DFS market, drawing on data collected through the 2016 UNCDF-MM4P Annual Provider Survey (APS), and complemented by data from other sources such as GSMA and the Agent Network Accelerator Survey conducted by The Helix Institute of Digital Finance.

    The UNCDF-MM4P APS was launched to provide industry participants and observers with a more comprehensive picture of the state of the DFS market, regarding customer adoption, usage and trends of DFS in Zambia. On an individual basis, the APS will also give DFS providers insights into the performance of their products and services relative to the market.

    The survey was developed by the UNCDF-MM4P team and administered to providers that offer digital financial solutions, including mobile money operators, banks and third-party operators in Zambia. The survey included both quantitative and qualitative questions.

    Digital Financial Services Price Transparency and Awareness in Malawi Paper 2017

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    While traditionally considered an issue relevant to consumer protection and market conduct, the lack of pricing transparency of digital financial services (DFS) can hinder adoption and usage of digital financial products and services as customers will focus on what they have been ‘traditionally’ accustomed (i.e., cash or the use of alternative rudimentary ways to transfer money). Where consumers have difficulty understanding or accessing the price of products, they are unlikely to use the products and may be restricted in their ability to compare the offers available in the market across various providers. This situation may limit the uptake of DFS if customers (incorrectly) perceive the products as too expensive and could as well result in a lack of competitive pressure on providers to offer value for money and innovative products and services. Price transparency is therefore important for ensuring effective financial inclusion and competition. It is also a basic aspect of most DFS providers’ internal compliance for agents/outlets, so it is critical to understand whether or not relevant rules are being followed.

    In Malawi, the Digital Financial Services Coordinating Group (DFSCG) Annual Workplan, developed by MM4P and approved by DFSCG members, included the development of a whitepaper on a topical DFS industry issue. At its Q1-2017 meeting, DFSCG identified the need for transparency and consumer awareness of transaction costs as one of the barriers for adoption of DFS in the country and thus agreed to develop this whitepaper on ‘Digital Financial Services Price Transparency and Awareness in Malawi’.

    Author Nandini Harihareswara; Zerubabel Junior Kwebiiha; Fletcher Chilumpha
    Publisher UN Capital Development Fund
    Number of Pages 16 pp.
    Primary Language English (en)
    Region / Country Southern Africa
    Malawi
    Keywords digital finance
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    Mobile Technologies and Digitized Data to Promote Access to Finance for Women in Agriculture Report 2017

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    The evidence that women both drive agricultural production and rely on it for their livelihoods means that greater financial and informational service provision to women, especially through digital channels, could increase the efficiency and effectiveness of their labor. While the numerous barriers to women’s access to Digital financial Services (DFS) are clear, clarifying the best methodologies by which to overcome these is both dependent on situational context and still subject to research and testing. This report provides the state of play of current and promising efforts that use mobile technology and digitized data to close the gap in access to finance for women in agriculture. It includes three components: 1) a review of the financial characteristics and needs of women in agriculture, based on an extensive literature review; 2) a stock taking of initiatives that use mobile technologies and digitized data for agricultural finance and women’s financial inclusion; and 3) an analysis of gaps in existing initiatives that would increase access to DFS by women farmers, laborers and women-owned agricultural MSMEs. The report also examines the regulatory environment around DFS and ways that regulators are working to increase responsible access to women.

    Author Panos Varangis; Juan Buchenau; Toshiaki Ono; Rachel Sberro-Kessler et al.
    Publisher World Bank Group
    Number of Pages 88 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Gender, Access To Finance, Digitized Data, Mobile Technologies
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    The Role of Digital Payments in Sustainable Agriculture and Food Security Report 2017

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    The report examines how shifting to digital payments can provide powerful solutions to help countries improve agricultural productivity and ensure food security, bringing higher incomes and greater financial inclusion.

    The paper aims to help economies begin and accelerate their shift to digitize payments in their agriculture sectors. By providing data and recommendations, the paper is designed to assist countries in fulfilling their commitments towards Sustainable Development Goal #2: “End hunger, achieve food security and improved nutrition and promote sustainable agriculture” through digital payments.

    Publisher The Better Than Cash Alliance, United Nations Capital Development Fund
    New York
    Primary Language English (en)
    Region / Country Global
    Keywords sustainable agriculture, digital finance, Food Security
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    Responsible Digital Payments Guidelines Guideline 2016

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    The Better Than Cash Alliance Responsible Digital Payments Guidelines identify eight good practices for engaging with clients who are sending or receiving digital payments and who have previously been financially excluded or underserved.
     
    The focus of the Guidelines is on the common types of digital payments services provided to the financially underserved such as electronic money transaction accounts. For clients to adopt and use digital payments, they need to feel protected from risks such as loss of privacy, exposure to fraud, and unauthorized fees. This means that service providers need to proactively take steps to protect their clients and that regulators should ensure a sound consumer protection regulatory framework.
     
    This is especially true for financially excluded and underserved clients and those with low financial and technological capability who are participating in a world of rapid innovation involving new types of financial services, providers, partnerships, and distribution channels. In an inclusive digital payments ecosystem, it is important for all the stakeholders to do their part to ensure that digital payments are made responsibly.
     
    The Guidelines’ aim is to provide a helpful tool for all stakeholders supporting responsible practices in the move from cash to digital payments in order to reduce poverty and drive inclusive growth.
     

    Digital Financial Services and Risk Management Handbook Report 2016 English (en)

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    The research for this handbook included three components: interviews with approximately 30 practitioners, four in-depth case studies with Tigo Tanzania (MNO), FINCA DRC (MFI), Kopo Kopo Kenya (PSP) and Fidelity Bank in Ghana, and a two-day client workshop held in Cape Town in November 2015. The research objectives were to:  

    1. Clearly define and describe all types of risks that may be faced by financial service providers using digital financial services;
    2. Provide easy-to-use guidelines for conducting risk diagnostics, assessments, developing risk frameworks, and implementing risk management tools;
    3. Analyze how different types of financial institutions currently assess risk and implement risk management tools;
    4. Identify general lessons learned by financial service providers about DFS risk management that are relevant to other markets and organizations on such issues as integration with exiting institution-wide risk frameworks, key risk indicators, most common types of risks faced, how to best mitigate risk, and best practices for DFS risk management. 
    Digital Financial Services and Risk Management Handbook  -  English (en)

    Author International Finance Corporation (IFC) , The MasterCard Foundation
    Publisher International Finance Corporation (IFC) , The MasterCard Foundation
    Number of Pages 116 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Risk Management, digital financial services, Financial Services
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    Guide to the Use of Digital Financial Services in Agriculture Study Guide 2016 English (en)

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    The goal of this Guide is to identify specific challenges in value chains that can be addressed by improved payments or financial services, and then to identify corresponding DFS solutions to these specific challenges, with the aim of improving the ability of value chains to increase farmer incomes. In doing so, it is possible to increase farmer household access to a transaction account that builds household resiliency and offers access to payments and financial services long after an aid project or intervention is complete. Ultimately, this will move us closer to Feed the Future’s joint high-level objectives of inclusive agricultural sector growth and improved nutritional status. 

    Guide to the Use of Digital Financial Services in Agriculture  -  English (en)

    Author Martin, C., Harihareswara, N., Diebold, E.; Kodali, H., Averch, C.
    Publisher United States Agency for International Development (USAID)
    Number of Pages 70 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Agriculture, digital financial services, Financial Services
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    The Long-Run Poverty and Gender Impacts of Mobile Money Paper 2016 English (en)

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    Mobile money, a service that allows monetary value to be stored on a mobile phone and sent to other users via text messages, has been adopted by the vast majority of Kenyan households. We estimate that access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty. The impacts, which are more pronounced for female-headed households, appear to be driven by changes in financial behavior—in particular, increased financial resilience and saving—and labor market outcomes, such as occupational choice, especially for women, who moved out of agriculture and into business. Mobile money has therefore increased the efficiency of the allocation of consumption over time while allowing a more efficient allocation of labor, resulting in a meaningful reduction of poverty in Kenya.

    The Long-Run Poverty and Gender Impacts of Mobile Money  -  English (en)

    Conferencia Centroamericana y del Caribe de Microfinanzas 2016 Website 2016 Spanish (es)

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    Tecnología: Competitividad e Inclusión Financiera

    La Asociación Nicaragüense de Instituciones de Microfinanzas (ASOMIF) y la Red Centroamericana y del Caribe de Microfinanzas (REDCAMIF), celebrarán la “VIII Conferencia Centroamericana y del Caribe de Microfinanzas”, con el lema “Tecnología: Competitividad e Inclusión Financiera”, actividad que se llevará a cabo en Managua, Nicaragua,  del 3 al 5 de agosto de 2016, en el Centro de Convenciones Crowne Plaza.

    REDCAMIF, organiza cada dos años la “Conferencia de Microfinanzas”, en la cual participan profesionales de las entidades de Microfinanzas, proveedores de servicios vinculados a las microfinanzas, funcionarios de gobierno, representantes de organismos financieros internacionales y de cooperación Internacional, consultores, académicos, investigadores, inversionistas sociales y microempresarios que llevan a cabo actividades comerciales y sin olvidar a los diversos patrocinadores que promueven sus productos durante el evento, con el fin de vender sus servicios y conocer las necesidades de sus potenciales clientes de la industria microfinanciera.

    De acuerdo al equipo organizador para su preparación “se requiere una amplia planificación y una serie de preparativos, ya que cada evento se desarrolla en torno a una temática y un objetivo en el que se basarán cada Conferencia Magistral y Paneles de discusión”.

    El evento atraer cada dos años a participantes de todas partes del continente Americano, Europa y áfrica, en el que se inscriben profesionales de las entidades de Microfinanzas. La “Conferencia de Microfinanzas”, es una de las actividades más importantes a nivel nacional e internacional que celebra REDCAMIF, debido a la variedad de información sobre el sector y las experiencias que se comparten de los nuevos productos, servicios y métodos de créditos habilitados para satisfacer las diversas necesidades microfinancieras, a las personas de bajos ingresos a nivel de Latinoamérica.

    Link a la pagina de internet  -  Spanish (es)

    Digital finance for all: Powering inclusive growth in emerging economies Report 2016

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    This report draws on the findings of field visits to seven emerging economies: Brazil, China, Ethiopia, India, Mexico, Nigeria, and Pakistan and more than 150 expert interviews. The research finds that widespread adoption and use of digital finance could increase the GDPs of all emerging economies by 6 percent, or a total of $3.7 trillion, by 2025. Stakeholders across these countries would benefit in terms that around 1.6 billion unbanked people could gain access to formal financial services, out of which more than half would be women. Also, an additional $2.1 trillion of loans to individuals and small business could be made as providers expand their deposit bases and have a newfound ability to assess credit risk for a wider pool of borrowers. The resulting increase in aggregated demand could create nearly 95 million new jobs across all sectors. However, to achieve this opportunity joint effort by business and government leaders is needed.

    Spore Magazine - Agriculteurs connectés Journal Article 2016 French (fr)

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    Le dossier de l’édition mars-avril du magazine Spore a été consacré aux technologies permettant de connecter les agriculteurs aux marchés, aux services financiers et de santé, aux connaissances. Dans un 20ième siècle axé sur les connaissances, qu’est-ce qu’un agriculteur connecté ? Quels sont les types d’outils, d’aides et d’approches qui vont permettre aux producteurs de réaliser leur potentiel ? Le dossier est accompagné d’un reportage à Trinité-et-Tobago, sur une plateforme numérique appelée D’Market Movers, une initiative innovante qui établit une connexion directe entre les agriculteurs et le marché en permettant aux consommateurs d’acheter des produits alimentaires en ligne.

    Lien vers la publication  -  French (fr)

    Digital Financial Services and Risk Management Book 2016

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    In 2016, the Mastercard Foundation and IFC’s Partnership for Financial Inclusion Program jointly published the Digital financial services and risk management handbook for any type of financial institution offering or planning to offer digital financial services, such as mobile money and agent banking. This includes microfinance institutions, banks, mobile network operators, or third party payment service providers. 

    The handbook aims to help thes financial institutions understand the importance of and necessary steps to ensure their sustainability and reliability via the implementation of effective and responsible risk managementpractices.

     

    Geodata and ICT Solutions for Inclusive Finance and Food Security Document 2016

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    This paper presents an overview of the possibilities and challenges of using geo-data and ICTs to improve agricultural production and access to finance for smallholder farmers. Recent technological developments can assist in increasing agricultural production, adapting and mitigating the effects of climate change and further expand financial inclusion. The most important areas of ICT development for smallholders are:

    1. improving agricultural production;
    2. facilitating market access, and;
    3. improving access to financial services.

    While these applications are very promising for improving agricultural production and growth in outreach of financial services; there are still few cases that combine the two aspects. The paper argues that such a combination would be able to trigger the much needed growth in agro-finance. An inquiry into the lessons learned identified several areas that are relevant for speeding up developments that benefit smallholder farmers and the financial institutions that serve them:

    1. A good policy and regulatory environment is needed to streamline actors and interventions.
    2. Design appropriate information packages for farmers
    3. Financial institutions, especially those operational in rural areas, need guidance and support to enter into the digital highway.
    4. New technology needs high upfront development costs.

    From this paper, it becomes clear that innovative partnerships are required.

    Author Mariel Mensink and Martijn Vranken
    Publisher NpM Rural Finance, Rabobank Foundation, The Netherlands Space Office
    Number of Pages 21 pp.
    Primary Language English (en)
    Region / Country Global
    Keywords Ict For Development, Ict Solutions, Rural Finance, Financial Inclusion
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    Assessing Risk in Digital Payments Report 2015 English (en)

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    This report aims to help accelerate this process, with a particular focus on digital payments serving the poor in developing countries. It has three primary objectives:

    • Provide a common language and framework to guide dialogue on risk associated with digital payments, and its bearing on financial inclusion
    • Examine whether inclusion of non-bank providers or development of innovative distribution channels creates new types of risk for consumers (particularly the poor), providers, or the financial system at large
    • Describe approaches for assessing the economic impact of risk in digital payments from the perspectives of consumers, providers, and the system

    In working towards these objectives, we have built our framework so it can be extended to risks associated with digital financial services beyond payments and to risks associated with overall provider sustainability. The ultimate goal of financial inclusion requires strong risk manage- ment and deliberate regulation across these areas as well as in digital payments.

    This report contributes to the discussion started by our Fighting poverty profitably: Transforming the economics of payments to build sustainable, inclusive financial systems (2013). That report offered an extensive analysis of the economics of payment systems around the world. It concluded that digital technologies can significantly reduce the cost of payment systems, and make them more efficient, sustainable, and accessible to poorer consumers, while at the same time boosting revenues for financial providers by supporting activities, both financial and non-financial, that generate non-payments revenue. Risk is a contributing part of the equation.

    The authors have developed the perspectives in this report based on three primary activities. First, we drew on the latest risk management thinking in banking, payments, and other areas, in- cluding manufacturing and capital-intensive industries. Second, we assessed risk in digital payments in India and Kenya, two large markets with different payments system structures and levels of maturity. Kenya is the most developed mobile money market in the world. In India, emerging digital payments are linked largely to bank accounts, and increasingly en- abled by a universal ID system. To examine these two systems, we conducted field visits to more than 10 organizations across the value chain. Third, we supplemented our fact base with research on digital money and agent banking in Tanzania, Uganda, Nigeria, Ghana, Indonesia, Pakistan, Bangladesh and Brazil.

    After a brief summary of the key findings emerging from this work, the body of this report first offers a framework for understanding digital payments systems and the risks inherent in them. Next, the report discusses three broad categories of risk. Section I covers opera- tional risk and Section II covers solvency and liquidity risk, both in digital payments. Section III provides an overview of other risks associated with digital financial services beyond payments and overall provider sustainability. The report concludes with some advice and implications for stakeholders who choose to embark on the journey to improving financial inclusion.

    Assessing risk in digital payments  -  English (en)

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