This paper cites several financial service providers (FSPs) in emerging markets in exploring how recent advancements in digital technology have enabled new business models, transforming the market for financial services. The authors argue that these FSPs have deconstructed the financial services market into separate modules, allowing these modules to be reassembled in innovative ways. These modules include:
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MICROFINANCE PAPER WRAP-UP: “Agri-SME Finance: Navigating Volatility in the Wake of the War in Ukraine;” Published by IFAD, IFC, SAFIN
The authors describe the recent turmoil in global food markets and the resulting “worst food crisis in generations.” The war in Ukraine has had a major impact on markets in Russia and Ukraine, which together previously produced a quarter of the wheat and most of the sunflower oil sold worldwide. Meanwhile, increases in
MICROFINANCE PAPER WRAP-UP: “Strategies to Optimise MSME-centred Supply Chain Finance Solutions: A Study of Ghana, Ethiopia and Nigeria;” by Adebiyi Fajemisin, Anifat Ibrahim and Raliat Sunmonu; Published by Accion
This report describes how several supply chain finance (SCF) solutions were deployed with the intent of benefiting micro-, small and medium-sized enterprises (MSMEs) in Ethiopia, Ghana and Nigeria. The authors deem these countries particularly “promising markets for MSME-led digital financial inclusion,” and they argue that SCF can provide
MICROFINANCE PAPER WRAP-UP: “Leveraging Digital ID and e-KYC for the Financial Inclusion of Forcibly Displaced Persons: Risks and Opportunities;” Published by Alliance for Financial Inclusion
The authors of this paper discuss the use of electronic know-your-customer (e-KYC) procedures and digital forms of identification (ID) to support financial inclusion for forcibly displaced persons (FDPs) in Eswatini, Mauritania and Rwanda.
In Eswatini, refugees and asylum-seekers may apply for refugee ID cards and non-Swazi ID cards, respectively. After acquiring IDs, individuals may access
MICROFINANCE PAPER WRAP-UP: “The Global Findex Database: Financial Inclusion, Digital Payments and Resilience in the Age of COVID-19;” by Asli Demirguc-Kunt, Leora Klapper, Dorothe Singer, Saniya Ansar
This report presents findings from a World Bank survey of approximately 125,000 adults in 123 emerging markets regarding financial inclusion. The survey was conducted during 2021 and follows analogous surveys performed in 2011, 2014 and 2017.
Account ownership among respondents in all regions has been growing rapidly, from 51 percent in 2011 to
MICROFINANCE PAPER WRAP-UP: “The Business Case for Linkage With Informal Savings;” by Constantin Albot, Stephen Peachey; Published by MasterCard Foundation, Oxford Policy Management
This report describes Savings at the Frontier (SatF), a partnership between Canadian NGO MasterCard Foundation and UK-based consultancy Oxford Policy Management, that provided USD 17.6 million in technical assistance and direct funding to establish relationships between formal financial service providers (FSPs) and informal savings mechanisms (ISMs). The program ran from 2015 to 2022, engaging 10 FSPs in
MICROFINANCE PAPER WRAP-UP: “Pacific Insurance and Climate Adaptation Programme: Gender Equality and Social Inclusion Strategy,” Published by UNCDF
The authors of this paper note that the accessibility of climate- and disaster-risk financing and insurance instruments is growing globally and especially in the Pacific Island region. This region is particularly susceptible to climate risk because of factors such as
MICROFINANCE PAPER WRAP-UP: “60 Decibels Microfinance Index,” by Sasha Dichter, Devin Olmack, Ellie Rodgers, Akanksha Singh
Using data from approximately 18,000 beneficiaries of 72 microfinance institutions (MFIs) in 41 countries, the authors of this report rank the participating MFIs based on social impact. The researchers collected the data via surveys administered to 250 randomly selected clients for each MFI. The surveys covered 18 indicators, such as
MICROFINANCE PAPER WRAP-UP: “The Value of Pay-as-you-go Solar for Mobile Operators: Insights from Customer Journeys in Benin and Côte d’Ivoire,” Published by GSMA
This analysis of data from Benin and Côte d’Ivoire addressed “the impact of mobile consumers adopting pay-as-you-go (PAYG) solar on their mobile usage.” Based on 120 interviews with end-users of PAYG technologies, the authors found that access to energy via solar home systems resulted in:
MICROFINANCE PAPER WRAP-UP: “Savings and Retail Banking in Africa: Unpacking the Customer Through Demand Side Data,” published by World Retail Savings and Banking Institute, MasterCard Foundation
This report offers three case studies on how financial services providers (FSPs) may expand and improve their usage of data to devise client-centric services and minimise account dormancy. The first case study is on the
MICROFINANCE PAPER WRAP-UP: “The Growth and Performance of Affordable Housing Finance Lenders in India;” by Nadeem Karmali, Guillermo Rodriguez Ruiz
In studying the growth of affordable housing finance corporations (AHFCs) in India, the authors review the history of the Indian housing market and related government policies. After independence in 1947, the Indian government acted as a direct provider of housing. Since then, the government migrated its role into being a “facilitator of housing.” Starting in the 1990s,
MICROFINANCE PAPER WRAP-UP: “Translating Digital Credit Transaction Data Into Consumer Protection Supervision,” by Daniel Putman, Published by Innovations for Poverty Action
The adoption of digital financial services (DFS) has increased significantly in lower- and middle-income countries in recent years, specifically the usage of digital credit via mobile phone messaging, mobile apps and web browsers. Among the benefits of digital loans is the
MICROFINANCE PAPER WRAP-UP: “Fintech: Financial Inclusion or Exclusion?”; by Yoke Wang Tok, Dyna Heng; Published by International Monetary Fund (IMF)
Based on a review of existing literature, the authors find that the global gender gap in digital financial inclusion is 11 percent points and the rich-poor gap is 15 percent points. They then perform a regression analysis drawing from a wide range of datasets on digital financial inclusion; traditional financial inclusion; proxies for financial technology (fintech) such as fundraising; and measures of the digital divide by gender, income, and urban versus rural. The three main results are:
MICROFINANCE PAPER WRAP-UP: “Merchant Expansion Through Digital Acceptance and Liquidity (MEDAL) Facility Report;” Published by Jordan Payments & Clearing Company, GIZ
The Merchant Expansion Through Digital Acceptance and Liquidity (MEDAL) Facility was created in Jordan to test methods for supporting “mobile payment service providers (mPSPs) [attempting] to meet certain merchant acquisition and QR-code transaction targets by experimenting with and developing business, operational and awareness strategies.” The program eventually provided two mPSPs a total of JOD 47,500 (USD 67,000) each because they met all three sets of the program targets, thus receiving the funds in three tranches. The targets included
MICROFINANCE PAPER WRAP-UP: “Central Bank Digital Currencies: A New Tool in the Financial Inclusion Toolkit?”; by Raphael Auer et al; Published by Bank for International Settlements, World Bank Group
The authors of this study interviewed representatives of nine central banks that are at various stages of exploring the possible creation of central bank digital currencies (CBDCs) with the goal of increasing financial inclusion. Among the barriers to financial inclusion CBDCs might address are:
MICROFINANCE PAPER WRAP-UP: “Outcomes Management for Financial Service Providers: A Proposed Standard Framework Aligned With the Sustainable Development Goals,” Published by European Microfinance Platform, Cerise, Social Performance Task Force
This paper builds on the publishers’ past work to create an updated “methodology for outcomes management and a set of standard outcomes indicators” that are mapped to the UN’s Sustainable Development Goals (SDGs) and the targets that make up each SDG. The aim is for the indicators to be “actionable” and the methodology to be “simple” to
MICROFINANCE PAPER WRAP-UP: “Platforms, Livelihoods and Inclusive Finance,” Published by Center for Financial Inclusion at Accion
Ms El-Zoghbi and Ms Michaels explore the role of digital platforms in supporting financial inclusion and livelihoods. Their background research indicates that such platforms have transformed some economies significantly by (1) helping businesses recover from the early stages of the COVID-19 pandemic; and (2) providing employment opportunities for disadvantaged populations such as youth, women and rural residents. In particular, e-commerce, gig working, social media and agricultural platforms have been found to improve the livelihoods of low-income consumers as well as increase the strength of micro-, small and medium-sized enterprises. The
MICROFINANCE PAPER WRAP-UP: “Women’s Agent Network – the Missing Link in India’s Financial Inclusion Story: A Supply-Side Perspective,” by Akhand Tiwari et al, Published by MicroSave
Based on a survey of 12 private-sector business correspondent network managers (BCNMs), the authors seek a supply-side perspective on the challenges and opportunities for expanding the reach of female business correspondents (BCs) in India. BCs are agents who contract with banks to offer banking services outside of bank branches. The authors find that women are underrepresented among BCs, but that “according to BCNMs, more female BC agents would improve the quality of the agent network.” One possible reason