Rural Finance and Investment Insights: November 2018
Dear RFILC members,
Our November’s issue is dedicated to the topic of digital financial services. The first highlight is the handbook titled “Digital Financial Services for Agriculture”, developed by the International Finance Corporation (IFC) and the Mastercard Foundation. Financial inclusion is one of Africa’s great success stories of the past decade: just over 43 percent of adults on the continent today have access to formal financial services, compared to the 23 percent registered in 2011. This is primarily due to the introduction of digital financial services and their contribution to the creation of a market for affordable, accessible and sustainable financial services, specifically for those actors who were previously excluded from accessing traditional banking services. IFC and the Mastercard Foundation have worked with 14 financial services providers across the continent, leverage new technologies to build and test innovative business models for financial inclusion. This report captures the ongoing transformation of the financial sector in Africa, sharing the most important lessons learned and casting an eye towards the future of financial inclusion in the region.
The second highlight is a report by the Accion Venture Lab and the Mastercard foundation, titled “The Tech Touch Balance: How the Best Fintech Startups Integrate Digital and Human Interaction to Accelerate Financial Inclusion”. Even where customers in emerging markets have overcome some of the barriers that limit the use of digital technologies — and have access to affordable handsets, reliable internet connectivity, and stable power — many among them still look for human interaction when accessing digital financial services. Reasons for this include a limited comfort and familiarity with digital technologies; a limited understanding of financial products; a general lack of trust in financial service providers; and a limited awareness of startup brands engaged in the fintech domain. This can leave fintech startups caught between having to choose whether to adopt these highly efficient technologies, or respond to the clients’ preferences for high-cost human interaction. The report explains why both “tech” and “touch” matter for fintechstartups. It also presents case studies of businesses that have successfully found this balance,while offering a way forward to follow for those financial service providers that are seeking to achieve the same. The report also provides valuable insights into the future direction of “tech” and “touch”, as well as guidance on where startups should begin in designing their own customer experience.
Finally, the Agriculture Value Chain for Microfinance and SME Practitioners intensive training programme hosted by the Microfinance Association, will take place in Nairobi, Kenya from 4th to 6th December 2018. This course provides a thorough understanding of the gaps and challenges of agriculture finance, enabling participants to sharpen their awareness of the fundamental issues associated to providing capital to agribusinesses and agri-SMEs. The program presents a range of different business models and risk management tools that have succesfully adopted innovative methodologies and systems for agri-financing, illustrating their functioning through a series of related successful case studies.
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: