MICROFINANCE PUBLICATION ROUND-UP: Driving Scale, Agent Network Density in Peru; Youth Banking in the Dominican Republic; Aging, Financial Inclusion in Colombia

“Aging and Financial Inclusion: An Opportunity;” published by HelpAge International and Accion’s Center for Financial Inclusion; 2015; 40 pages; available at https://centerforfinancialinclusionblog.files.wordpress.com/2015/02/aging_and_financial_inclusion_an_opportunity.pdf

This report highlights various barriers and opportunities in providing financial services to older people and helping younger people plan for old age, focusing on middle-income countries, in particular Colombia. The authors draw on previously published literature, an online poll of financial services professionals and the results from focus groups of older people in Colombia. The report suggests that policymakers and service providers recognize that older people are an increasingly growing and important consumer demographic whose needs differ from those of young adults. The authors recommend: (1) lenders loosen age caps to make credit more accessible to older people; (2) the industry as a whole enhance financial education and consumer protection; and (3) support the goal of universal pension coverage by integrating social pensions, personal savings, corporate pensions and other fixed-income streams.

“Building a Sustainable Youth Proposition: Lessons from Banco ADOPEM;” published by Womans’ World Banking; 2015; 16 pages; available at http://www.womensworldbanking.org/wp-content/uploads/2015/01/WomensWorldBanking_BuildingSustainableYouthProposition_LessonsBancoADOPEM1.pdf

This case study examines “Mia” savings accounts, which were launched to target youth in 2010 by Banco Adopem of the Dominican Republic. The authors suggest marketing schemes be used to promote the value of youth savings accounts among both youth and their parents, investing in financial education, and planning for the financial stability of such programs beyond private donor funding. Forty-four percent of parent-opened accounts in 2010 lost all of their value through dormancy fees, but only 13 percent of the parent-youth accounts did.

“Driving Scale and Density of Agent Networks in Peru;” published by CGAP (Consultative Group to Assist the Poor); 2015; 4 pages; available at http://www.cgap.org/sites/default/files/Brief-Driving-Scale-and-Density-of-Agent-Networks-in-Peru-Jan-2015.pdf

This paper analyses the impact of the design of agent networks in Peru on the ability of such networks to deliver financial services to poor people and sparsely populated areas of the country. It is based on a study of five agent networks, which collectively have 26,000 agents facilitating 24 million monthly transactions. The report identifies three major network design strategies as optimal: aggregation of services into single conglomerate networks, simplifying transactions and processes, and reducing network strain by favoring lightweight network operating models. According to the authors, increases in regulatory compliance costs can reduce the ability of networks to remain feasible in areas with lower population density. Possible means of addressing this issue include offering different service levels across different geographic areas. Additionally, the study notes that maintaining the option of cash transactions rather than focusing exclusively on mobile money is beneficial in rural areas as they allow rural agents to increase the potential transactional pool in areas with low traffic.

 

By Makai McClintock, Research Associate

Sources and Additional Resources:

“Aging and Financial Inclusion: An Opportunity;” https://centerforfinancialinclusionblog.files.wordpress.com/2015/02/aging_and_financial_inclusion_an_opportunity.pdf

“Building a Sustainable Youth Proposition: Lessons from Banco ADOPEM;” http://www.womensworldbanking.org/wp-content/uploads/2015/01/WomensWorldBanking_BuildingSustainableYouthProposition_LessonsBancoADOPEM1.pdf

“Driving Scale and Density of Agent Networks in Peru;” http://www.cgap.org/sites/default/files/Brief-Driving-Scale-and-Density-of-Agent-Networks-in-Peru-Jan-2015.pdf

MicroCapital Universe Profile: Center for Financial Inclusion (CFI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Center+for+Financial+Inclusion+%28CFI%29

MicroCapital Universe Profile: CGAP (Consultative Group to Assist the Poor), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+%28Consultative+Group+to+Assist+the+Poor%29

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

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