MICROCAPITAL BRIEF: Financial Inclusion 2020 Announces Roadmap to Financial Inclusion, Highlights Importance of Technology

Financial Inclusion 2020 (FI2020), a campaign to extend financial inclusion to 2 billion people in developing countries by the year 2020, recently announced the findings of a survey of 300 financial sector practitioners on their perspectives about opportunities and challenges to FI2020’s goals. The Roadmap to Financial Inclusion is a result of participants’ responses and focuses on five specific areas to improve financial inclusion: expanding technology, meeting customer needs, implementing credit reporting, increasing financial capability and improving client protection [1].

The Roadmap indicates that as demand for financial services increases, innovative technologies, such as mobile money services and business models that improve access to services in rural areas, are essential to improving financial inclusion and decreasing the costs of financial services [1]. According to a statement attributed to Elisabeth Rhyne, the Managing Director of the Center for Financial Inclusion at the US-based nonprofit Accion, “The Roadmap emphasizes new concepts that are generating excitement but are not yet mainstream, like the power of behavioral economics to guide product design, capability building and client protection, or the use of data analytics in creating alternative credit reporting systems and targeting new market segments. [1]” The key findings of the Roadmap include the following:

  • As demographic shifts, economic growth and innovative technology create a huge new market for financial services, especially in the developing world.
  • Technology and new business models are lowering the cost of services, improving access in remote areas and extending the reach of financial education.
  • Technology is the biggest driver of the expansion of financial services.
  • To advance financial inclusion, synergy between private enterprise and policy and protective regulation is needed.

Approximately 40 organizations participated in constructing the Roadmap. Bill Gajda, Head of Strategic Partnerships at the US-based financial services corporation Visa and Chair of the FI2020 Technology Working Group, reportedly stated that “while reaching full financial inclusion remains a significant challenge, we are seeing a remarkable convergence of governments, civil society and the private sector all working to advance this effort. [1]” The Roadmap will be further discussed at the FI202 Global Forum taking place in London on October 28-30, 2013.

FI2020 is managed by the Center for Financial Inclusion at Accion in partnership with US-based financial corporations Citi, Visa and MasterCard; the Bill and Melinda Gates Foundation; Western Union and MetLife Foundations.

As of 2012, Accion reports total assets of USD 326 million, an active loan portfolio of USD 7.1 billion and 6 million borrowers.

By Anesa Kratovac, Research Associate

About Accion

Accion is a private, US-based nonprofit organization with the mission of alleviating poverty by offering financial products such as microenterprise loans and business training. Accion was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions provide loans to men and women entrepreneurs through 62 microfinance institutions (MFIs) in 31 countries in the Americas, Asia and Africa. As of 2012, Accion reports total assets USD 326 million and an active loan portfolio of USD 7.1 billion serving 6 million borrowers.

Sources and Additional Resources:

[1] PRNewswire Article, September 24, 2013, “Coalition of Public, Private and Civil Society Leaders Unveils Roadmap to Financial Inclusion,” http://www.prnewswire.com/news-releases/coalition-of-public-private-and-civil-society-leaders-unveils-roadmap-to-financial-inclusion-225012372.html

Microfinance Event, September 24, 2013, “European Microfinance Platform (e-MFP) to Host European Microfinance Week 2013, Luxembourg, November 12-14, 2013, With On-site Coverage Provided by MicroCapital,” https://www.microcapital.org/microfinance-event-european-microfinance-platform-e-mfp-to-host-european-microfinance-week-2013-luxembourg-november-12-14-2013-with-on-site-coverage-provided-by-microcapital/

MicroCapital Article, September 27, 2013, “Central Bank of Liberia Loans $483k to Three Counties in Western Liberia to Promote Financial Inclusion,” https://www.microcapital.org/microcapital-brief-central-bank-of-liberia-loans-483k-to-three-counties-in-western-liberia-to-promote-financial-inclusion/

Microfinance Event, September 11, 2013, “Center for Financial Inclusion to Host Financial Inclusion 2020 Global Forum, October 28-30, London,” https://www.microcapital.org/microfinance-event-center-for-financial-inclusion-to-host-financial-inclusion-2020-global-forum-october-28-30-london/

MicroCapital Article, August 16, 2013, “Fiji’s National Financial Inclusion Taskforce (NFIT), Reserve Bank of Fiji (RBF), Pacific Financial Inclusion Program (PFIP) Make Progress Towards 2014 Goal of Financial Inclusion for 150k Unbanked Citizens,” https://www.microcapital.org/microcapital-brief-fijis-national-financial-inclusion-taskforce-nfit-reserve-bank-of-fiji-rbf-pacific-financial-inclusion-program-pfit-make-progress-towards-2014-goal-of-financial-inclusion/

MicroCapital Universe Profile: Accion, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Accion

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.

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