Library: All Frontier Issues

Description:
We see a pattern repeating worldwide—the poor often accumulate astonishingly high amounts of savings, but they hold these savings in informal vehicles, not formal bank accounts. And even if an informal saver opens a bank account, they usually don’t use the account for meaningful savings or as a way to take advantage of payments, credit, insurance, or other offerings. This Focus Note is the first in a series of shared learnings from GAFIS—the Gateway Financial Innovations For Savings project. The GAFIS project will create market-based, sustainable solutions to financial inclusion.

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BFA Senior Associate Daryl Collins is profiled in an article showcasing "Power Players" among "money-minded pros."

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Provides market participants a sharper understanding of the demand for domestic payment services in the Philippines. The study examines the market for remote bill payments and domestic money transfers among formal and informal providers, including banks and PSPs such as pawnshops and payment centers, then examines the challenges facing market entrants such as low cost mobile-money services.

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This report informs financial policymakers and regulators by summarizing client experiences of branchless banking models in Brazil, Kenya, and South Africa, with a specific focus on the most vulnerable. The paper focuses on the types of problems encountered by branchless-banking consumers, showing how these experiences shape consumer practice and perceptions. A framework for analysis, both for building the survey questionnaire and for reaching conclusions from its results, is suggested. Lessons learned about how to gather relevant and useful data in order to promote and provide guidance for future studies about consumer experience are shared.

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Provides insights into the South African Mzansi account drawing upon data gathered through the use of Financial Diaries in order to investigate how the accounts have been used by clients. It compliments a previous paper written to provide an introduction to the Mzansi account and present the successes and shortcomings of the initiative.

Description:
As branchless banking and other efforts to increase financial inclusion extend the financial access frontier outward, the newly banked are exposed to both new opportunities as well as new risks.We often assume that financial capability must be strengthened in order to drive uptake of new services, improve the impact of services on consumers, ensure consumer protection, and make financial markets more efficient information processors. But are we sure that a single concept can indeed fill all these functions in one fell swoop? Is there is a particular part of financial capability that might be more powerful than others in advancing financial inclusion while protecting consumers?

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Reviews the findings of the Small Business Financial Diaries pilot, a study designed to gather cash flows and qualitative information for small businesses. The objectives of this report are two-fold: a. To describe the Small Business Financial Diaries methodology and to review the success of the methodology as an effective data collection tool; and b. To use the pilot data to come to some initial conclusions about the financial services and training needs of small business.

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Reviews various data sources that have a bearing on microfinance or access to finance more broadly, and discusses their relevance by exploring the range of questions these data might be able to inform. Attention is restricted to multiple country sources that achieve some level of comparability of data.

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Analyzes whether age drives efficiency improvements both at institutional and industry levels, and illustrates what effects efficiency improvements have for individual clients as well as for the institutions. Quantitative analysis is conducted using MIX Market data.

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Provides a formal analysis of the economic drivers for branchless banking solutions. It exposes the design trade-offs that occur at each of the key layers of service: the retail network (transaction acquisition), payments network (transaction aggregation and routing) and account/service platforms. It also reviews the volume drivers of various existing deployments.

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Presents ten key service design features that have facilitated the rapid adoption and active use of M-Pesa in Kenya. These relate to branding and messaging, ease of use, consistency of customer experience, agent monitoring, instantaneous customer registration, free deposits, ability to send money to non-registered customers, and agent channel growth.

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Takes the perspective of mobile operators in exploring what roles they can play in expanding access to finance. It presents the comparative advantages mobile operators bring to the table, the opportunities for them, the partnership options open to them, and the risks involved.

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This Briefing Note includes new ratings of the enabling environment for mobile financial services in five Latin American countries - Brazil, Mexico, Ecuador, Bolivia, and Peru - drawing on information from a 2008 report by Afi. This Note is therefore another step in the process of broadening the country coverage and enhancing the rating methodology for tracking changes in the environment across a wider group of countries.

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Seeks to understand the environmental dynamics (rather than business model or service design factors) affecting the uptake of mobile money in developing countries. It identifies country conditions that may be conducive to success, and explores whether the apparent difficulty of replicating M-Pesa’s success outside of Kenya relates to contextual drivers.

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Discusses the role of savings as a tool for people to be able to invest in their productive activities and stabilize their expenditures in food, health and education. Emphasis is given to making savings services available close to where poor people live and linking accounts to electronic payment networks in order to enhance the convenience and usefulness of savings.

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Overview piece calling for new banking models that allow poor people to save daily, right from their neighborhoods and villages. It explains how one can leverage existing non-bank retail outlets to serve as cash transaction points acting on behalf of licensed financial institutions, and mobile operators acting as channel managers and transaction aggregators.

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Empirical investigation comparing the growth patterns of MFIs and commercial banks. It concludes that MFIs’ growth is largely driven by greater distribution (more branches) rather than at leveraging the use of branches – i.e. extensive rather than intensive growth. The evidence also supports the well established notion that the potential for intensive use is larger on the deposit mobilization than the lending side.

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Examines how M-Pesa in Kenya achieved critical mass, thereby defeating the problems of trust, network effects and customer-agent interdependencies that affect all new payment systems. It complements the earlier paper in Innovations by focusing more narrowly on branding, channel management and pricing.

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Provides a process for identifying and assessing risks in the mobile channel, and then suggests controls for their mitigation.

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Reviews 7 common themes that emerge from the early experience in developing branchless banking models across a range of developing countries, relating to customer behavior, the roles of various players, products and technology platforms. It also presents 4 key uncertainties and 4 predictions that appear to emerge from the key insights we identified.

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Extends the branchless banking vision by describing a system in which retail stores act as agents for all banks. The analysis is centered on the benefits of shared agent networks in terms of scalability and ubiquity, the roles and responsibilities of the various players involved, and approaches for mitigation of potential risks.

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This paper seeks to review some of the most recent innovations in housing finance, focusing more specifically on the role of housing microfinance.

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The work described in this report builds on and extends earlier work towards developing a methodology for identifying key features of an environment which would enable transformational branchless banking approaches to develop. First, it seeks to simplify the diagnostic approach to test whether regulators themselves may be able to respond to a self-diagnostic. Second, it seeks to systematize earlier insights about the relative openness and certainty of different regimes by developing these into a scoring model based on the responses obtained.

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Explains in detail how the retail agent model of banking works, and how it can help banks achieve much broader and deeper reach into underserved communities. Drawing mainly on the practical experience with banking agents in Latin America, it discusses the various strategic options for banks from a technology, commercial and operational point of view.

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Examines how banks can leverage the broad availability of mobile phones to expand financial access for poor people. It provides frameworks to help banks define the strategic objectives for mobile banking and navigate through key implementation choices. There is a basic review of the principal technology platforms on which mobile banking services can be built.

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Reviews the various commercially-available access bearer technologies that can be used by microfinance institutions to connect their devices or applications. It discusses the technical characteristics and possible business limitations of each connectivity solution.

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Places the development of ubiquitous, low-cost retail payment networks at the heart of financial service delivery for poor people. It explains the basic financial needs that can be met through a ‘payments utility,’ and discusses challenges in developing customer propositions, a business case for retail agents, incentives for banks to serve all, and platform interoperability.

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Reviews some big failures and more promising experiences in the use of smartcards and mobile phones as payment instruments in developed countries. It highlights the need to ensure there are demonstrable customer benefits when pushing the frontier of electronic money and payment instruments.

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Reviews the Spanish experience with regulating the competition aspects of new mobile payment networks in the absence of formal technical standards. It explores whether there was a “rush to regulate” by Spanish authorities.

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This report builds on the framework for analysis created by our first scoping paper for DFID in 2006 which made the case to design enhanced payment arrangements for social transfer schemes, and provided a process outline of how to do so. This report re-examines and extends the earlier framework by summarizing and assessing new evidence which has come to light in the past two and a half years looking in particular at payment arrangements for new transfer schemes in five countries.

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Using a new data set of daily income, expenditure and financial transactions collected over a year from a total of 181 poor households in South African rural and urban areas, the report evaluates the financial impact of death due to HIV/AIDs, particularly with regard to savings and insurance behavior.

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Drawing evidence from the Financial Diaries dataset, this report looks at the retirement support being accessed by the poor, how well they prepare most adults for retirement, and accordingly offers policy recommendations.

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This report investigates the extent to which the expansion of mobile telephony is likely to lead to the expansion of access to appropriate financial services in developing countries, especially Africa.

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Assesses the role of technology in promoting financial inclusion

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This report categorizes the options and discusses the issues involved in the design of enhanced payment arrangements for social transfer schemes. It is intended to provide a primer for those involved in the consideration and design of social transfer schemes.

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This focus note brings together evidence from the South African Financial Diaries with Bangladesh and Indian Financial Diaries to expand our understanding of how poor families perceive and finance housing expenditures. Through a mix of case studies and data aggregated across the samples, the note provides a critical look into how poor housesholds "turn money into house."

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Uses the data from the Financial Diaries to contribute to the existing knowledge about medical expenditures of the poor by reporting on medical spending and insurance within the context of other financial instruments and other spending items.

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Explores the question: How much variation can we find in the financial behavior of households in the low income sector? Information was drawn from placing the 152 Financial Diaries households into 6 different livelihood profiles and determining the financial instrument portfolios for each profile.

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Examines the financial decisions related to funeral cover to assess the value that is added by various forms of funeral insurance. Rather than looking at each funeral plan on the market, the Financial Diaries data allow us to look at funeral cover within the context of how actual households are using them, relative to their income and other circumstances.

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In order to explore potentially useful means of segmentation of savings' markets as the basis for strategies by financial providers, government and donors to scale-up savings, this report examines how different groups among the poor are saving based on evidence arising from cross-country data sets as well as micro-level household panels.

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This paper sets out the 'access frontier' approach to understanding how markets work over time and in particular, how they work to increase access by poor people.

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Provides a short overview of housing microfinance.

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Short presentation which provides support for the claim that a double-bottom line approach is possible and sustainable over time.

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This paper aims to deepen and extend the "Making markets work for the poor" (MMW4P) approach by applying it to a specific sector (financial services) and geography (South Africa), based on the experience of the FinMark Trust programme from 2002 to date.