MICROFINANCE PUBLICATION ROUND-UP: ING’s Billion to Gain: Geographic Variations in Microfinance Impact; Indian Mobile Wallet Market Growth; Profiting From Financial Inclusion

“A Billion to Gain? Microfinance Clients Are Not Cut from the Same Cloth,” by G. Hieminga, R. Budjhawan, S. Eriksen, I. Unger; published by ING Bank; November 2015; 8 pages; available at: http://www.ingcb.com/insights/research/microfinance-emancipating-the-worlds-poorest

This report analyzes one case study each in Ghana and India, concluding that the impact of microfinance differs both between as well as within countries. Therefore microfinance institutions (MFIs) should assess the impact of microfinance on their client base instead of simply basing their strategy on research conducted in other regions. Additional main findings include that: (1) “The Poorest of the poor benefit most”; (2) “Impact is higher for women with initial debt”; (3) “Financial training improves impact on income and savings”; (4) “Overall, not much difference is found” in groups with or groups without a leader; and (5) Variations in education, housing quality and asset accumulation do not lead to a difference in microfinance impact between groups.

“Indian Mobile Wallet Market Opportunities & Forecast, 2020,” published by TechSci Research; September 2015; 88 pages; available for purchase at: http://www.techsciresearch.com/report/india-mobile-wallet-market-forecast-and-opportunities-2020/446.html

This report forecasts potential growth in the Indian mobile wallet market based on interviews with mobile wallet service providers and desk research. The authors predict the Indian mobile wallet market to reach approximately USD 7 billion, from USD 1.15 billion in 2015, by 2020 based on: (1) “rising smartphone penetration rate”; (2) the “growing mobile internet user base”; (3) “increasing government support”; (4) the observation that “wallet companies have increasingly formed collaborations with service providers and financial institutions”; (5) and “regulatory approval of payment bank licenses”.

According to Karan Chechi, the Research Director at TechSci Research, “a large number of banking, financial services and insurance, and telecom companies have entered into the mobile wallet market in India. Tier I cities such as Delhi, Mumbai, Kolkata, Bangalore, Pune […]  have been the early users of the mobile wallet market for shopping, money transfer, mobile recharge and payments […]. The mobile wallet trend is gaining momentum in Tier II cities such as Jaipur, Lucknow, Chandigarh, Indore, Patna, […] on account of rising smartphone and mobile internet penetration rates”.

“How Banks in Emerging Economies Can Grow Profitably by Being More Inclusive;” by G. Boyle, S. Whitehouse, L. C. James, F. E. Kolnes; published by Accenture and CARE International; November 2015;  28 pages; available at https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_23/Accenture-Banking-WithinReach.pdf

This report presents how financial inclusion can be a viable business strategy for banks, based on an analysis of emerging financial markets and technologies. According to the authors, funding small enterprises at average interest rates and offering “fee-based services” could lead to USD 270 billion in additional revenue. In addition, the inclusion of “unbanked adults” could generate USD 110 billion.

“The traditional view has been that banking the unbanked and underbanked tended to be low-end, unprofitable and philanthropic,” said Simon Whitehouse, senior managing director in Accenture’s Financial Services Operating Group. “But new business models, enabled by digital technologies, are helping banks write a new rulebook for what is possible.”

In order to make financial inclusion more viable for banks, the report advises: (1) “Simplify existing financial products, like an entry-level savings account”; (2) “Use digital-enabling solutions, such as smartphones and point-of-service devices that enable fast account openings”; (3) “Be willing to partner with alternative providers, such as governments and telecom companies”; (4) “Join forces with the development sector, like utilizing NGOs to get access to savings”.

By Kevin van den Brink, Research Associate

About ING Bank

ING (Internationale Nederlanden Groep) Bank is a Netherlands-based banking and financial services corporation founded in 1991 upon the merger of Nationale-Nederlanden and NMB (Nederlandsche Middenstandsbank) Postbank Group. ING’s core businesses are retail banking, direct banking, commercial banking, investment banking, asset management and insurance services. As of December 2014, ING reported EUR 993 billion (USD 1 trillion) in assets under management and return on equity (ROE) of 9.9 percent.

About TechSci Research

TechSci Research is a market research and consulting company with offices in Canada, UK and India. It provides services in six industries – information technology, chemicals, water & water recycling, consumer goods & retail, automotive and energy & power. Financial details on the firm are unavailable.

About Accenture

Accenture is a company providing services in strategy, consulting, “digital”, technology and operations. Accenture has 358,000 employees working in approximately 120 countries. As of August 2014, Accenture reported total assets of USD 18 billion, return on assets of 17.4 percent, and return on equity of 55.5 percent.

About CARE International

CARE (Cooperative for Assistance and Relief Everywhere) International is a Switzerland-based non-governmental organization seeking to reduce poverty. Founded in 1945 with the aim of sending supplies to post-war Europe from America, it has evolved into a multipurpose humanitarian organization aimed at developing women’s economic capabilities. In 2014, CARE reportedly supported 880 projects in 90 countries that reached 72 million people. In 2014 it reported total assets of USD 285 million.

Sources and Additional Resources

PRNewswire, News, “India Mobile Wallet Market to Reach US$ 6.6 Billion by 2020, Says TechSci Research,” 

TechSci Research, News, “India Mobile Wallet Market Forecast & Opportunities, 2020,” 

Accenture, News, “Banking Within Reach,”

MicroCapital Universe Profile: ING Bank

MicroCapital Universe Profile: TechSci Research

MicroCapital Universe Profile: Accenture

MicroCapital Universe Profile: CARE International

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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