Rural Finance and Investment Insights: October 2018
Dear RFILC members,
We would like to dedicate our October newsletter to the topic ofFinancial Technology (FinTech). The interest on the FinTech domain is on the rise among researchers, policy makers and stakeholders in the financial inclusion arena, as these innovations play an essential role in empowering smallholders to improve their livelihoods while delivering a food secure future. That is why we would like to highlight a new World Bank Group publication “G20 Digital Identity Onboarding”. This report analyzes the role that robust, inclusive and responsible ID systems can play in enhancing financial access and inclusion. With a focus on digital ID, this paper is intended to guide interventions at country level, as well as to outline some key policy considerations. 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 capacity to access basic services and entitlements ranging from healthcare services, topensions and agricultural subsidies. This is especially true for marginalized segments of society such as women, poor rural farmers, refugees and also extends to micro, small and medium enterprises.
While 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, with online finance offerings being 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?”. That is why our second highlight of this month is a recent report entitled “Digital Finance and Data Security”, developed by the Center for Financial Inclusion. This research raises important concerns about how digital finance companies currently address data privacy and security issues and points to areas for improvement when creating strong defense mechanisms and privacy policies that protect consumer data.
Finally, we would like to mention that the “Inclusive Insurance for Emerging Markets” conference is going to take place in Lusaka, Zambia, on November 6-8, organized by the Munich Re Foundation. This event will bring together over 400 participants from around the world to discuss and identify ways of accelerating growth and economic viability through microinsurance. The microinsurance sector has experienced persistent growth in client outreach and premium volumes over the past ten years. Today, nearly 300 million low-income citizens in developing countries are covered by an insurance policy, with technologies increasingly expanding market coverage. Nonetheless, many people are still without cover or alternative risk management options. To discuss these and other issues, during the conference around 80 expert speakers are expected to share their knowledge on the microinsurance domain.
The Rural Finance and Investment Learning Centre is a part of the CABFIN Partnership Project which aims to promote and facilitate capacity building in rural finance. The concerns of rural finance are to ensure that people living in rural areas have access to financial services such as deposit and money transfer facilities, insurance and loan products. Effective use of these services can help to improve livelihoods and reduce rural poverty. The following CABFIN Partners have provided financial support to the RFILC: