{"id":34875,"date":"2019-04-09T18:04:37","date_gmt":"2019-04-09T18:04:37","guid":{"rendered":"https:\/\/content.centerforfinancialinclusion.org\/?p=34875"},"modified":"2019-04-10T13:55:39","modified_gmt":"2019-04-10T13:55:39","slug":"advancing-digital-financial-inclusion-in-asean","status":"publish","type":"post","link":"https:\/\/cfi.accion-staging.flywheelsites.com\/advancing-digital-financial-inclusion-in-asean\/","title":{"rendered":"Advancing Digital Financial Inclusion in ASEAN"},"content":{"rendered":"
This post originally appeared on the World Bank’s blog<\/a>.<\/em><\/p>\n How can digital financial services effectively support financial inclusion? To answer this question, the World Bank recently collaborated with the Association of Southeast Asian Nations (ASEAN) Working Committee on Financial Inclusion (WC-FINC) on a study titled \u201cAdvancing Digital Financial Inclusion in ASEAN: Policy and Regulatory Enablers<\/a>.\u201d This study analyzes a wide range of digital financial services (DFS) through a framework based on that of the Payment Aspects of Financial Inclusion (PAFI) report<\/a>.<\/p>\n According to the use of the PAFI framework (see figure below), three foundations must be present to enable the spread of DFS: government and private sector commitment to DFS development, a sound legal and regulatory framework concerning DFS, and an enabling financial and information and communications technology infrastructure. Atop these three foundations stand four catalytic pillars that increase uptake and use of DFS: improving the design of DFS products (and of the regulations that govern them), expanding agent networks and other access points, spreading financial literacy, and shifting large payment streams to flow through digital channels.<\/p>\n <\/p>\n Conducting this study did not come without challenges. From its start, in early 2017, the authors struggled to define such fundamental concepts as DFS itself. (At the time, terms for the fledgling industry and its products, such as \u201cDFS,\u201d \u201cFinTech,\u201d and \u201ce-money,\u201d were often applied loosely and interchangeably.) They also struggled, at times, to tease out the effects of prudential regulations and financial data on financial inclusion, because many regulatory bodies treat the topic in isolation from other objectives. But the study team persevered, and they emerged from their task with the following advice for DFS policy makers and regulators.<\/p>\n The policy and regulatory framework for DFS should be approached comprehensively, looking to enable not just the digital economy (through enhancing connectivity, ID and data infrastructure, institutional capacities, and inter-institutional coordination mechanisms) but also financial inclusion (through supporting expansion of financial infrastructure, products geared toward low-income customers, and nonbank financial institutions). The ASEAN countries vary widely in their level of financial system development, and thus they have a wide range of needs in the DFS space, from increasing the efficiency or interoperability of their basic digital payment infrastructures to refining regulations for novel DFS products such as crowdfunding and P2P lending. But despite this variance, several of the study\u2019s recommendations apply to all ASEAN countries, including the following:<\/p>\n The policy and regulatory framework for DFS should be approached comprehensively, looking to enable not just the digital economy but also financial inclusion.<\/p><\/blockquote>\n The final shapes of the DFS ecosystems of ASEAN countries remain to be seen, but the work that ASEAN authorities have done and continue to do to understand these ecosystems, adjust their policies concerning them, and share the lessons they\u2019ve learned with their regional and global neighbors is an encouraging start. The World Bank congratulates the ASEAN WC-FINC for having undertaken this study.<\/p>\n","protected":false},"excerpt":{"rendered":" This post originally appeared on the World Bank’s blog. How can digital financial services effectively support financial inclusion? To answer this question, the World Bank recently collaborated with the Association of Southeast Asian Nations (ASEAN) Working Committee on Financial Inclusion (WC-FINC) on a study titled \u201cAdvancing Digital Financial Inclusion in ASEAN: Policy and Regulatory Enablers.\u201d […]<\/p>\n","protected":false},"author":75,"featured_media":34878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"regions":[3135],"series":[],"types":[3123],"client":[],"topics":[49,3251],"personas":[],"institutional_partnerships":[],"clients":[],"program_teams":[],"acf":{"types":{"term_id":3123,"name":"Blog Post","slug":"blog-post","term_group":0,"term_taxonomy_id":3123,"taxonomy":"types","description":"","parent":0,"count":2142,"filter":"raw","term_order":"0"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":"Effective and use of digital financial services requires a comprehensive approach, according to a recent World Bank study. "},"post_default":{"description":""}},"authors":[{"ID":34885,"post_author":"75","post_date":"2019-04-09 17:51:28","post_date_gmt":"2019-04-09 17:51:28","post_content":"","post_title":"Veronica Trujillo","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"veronica-trujillo","to_ping":"","pinged":"","post_modified":"2019-04-09 18:01:22","post_modified_gmt":"2019-04-09 18:01:22","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?post_type=people&p=34885","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":false,"acf":{"person_name":{"first_name":"Veronica ","last_name":"Trujillo"},"title":"Financial Inclusion Specialist, Finance, Competitiveness and Innovation","position":"staff","social_media_links":{"email":"","linkedin":"","twitter":""},"body":"","header":{"header_type":"people_aligned","people_aligned":{"description":""}},"blocks":false,"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""},"is_author":true},"url":"veronica-trujillo"},{"ID":34882,"post_author":"75","post_date":"2019-04-09 17:49:07","post_date_gmt":"2019-04-09 17:49:07","post_content":"","post_title":"Ana Maria Aviles","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"ana-maria-aviles","to_ping":"","pinged":"","post_modified":"2019-04-09 18:01:16","post_modified_gmt":"2019-04-09 18:01:16","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?post_type=people&p=34882","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":false,"acf":{"person_name":{"first_name":"Ana Maria","last_name":"Aviles"},"title":"Senior Financial Sector Economist, World Bank","position":"staff","social_media_links":{"email":"","linkedin":"","twitter":""},"body":"","header":{"header_type":"people_aligned","people_aligned":{"description":""}},"blocks":false,"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""},"is_author":true},"url":"ana-maria-aviles"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":false,"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""},"related_content":{"cards":[{"ID":42635,"post_author":"75","post_date":"2021-06-17 16:22:03","post_date_gmt":"2021-06-17 20:22:03","post_content":"A household budget, saving for a business investment, or managing an unforeseen emergency can cause stress in the most adept household, let alone those experiencing the vulnerability and volatility of poverty. Learning to navigate financial systems and products is a long-term endeavor.\r\n\r\nBuilding financial capability \u2014 that is, the knowledge, skills, attitudes, and behaviors needed to make sound financial decisions to support well-being \u2014 can take time and creativity. The ultimate goal is to equip all people with the skills to navigate financial services safely and effectively and allow them to accrue their benefits. For poor and rural communities, this can mean increasing resiliency and reducing exposure to economic shocks, improving income growth and investment, and promoting more sustainable and equitable development. And for women, in particular, the accrued benefits can mean navigating financial choices with confidence, seeing themselves \u2014 and being seen \u2014 as financial clients, and accessing and using technology with ease.\r\n\r\nWhile overall progress has been made in advancing financial inclusion, progress for women continues to lag. Globally, male ownership is likely to be higher than female ownership of accounts<\/a>, with a gap of nearly 7 percent, which has persisted despite the overall rise in account ownership. The gender gap is much worse in some countries, where social norms govern financial access and decision-making<\/a>. For instance, in Pakistan, while account ownership doubled since 2011, most of the growth was driven by accounts owned by men. Similarly, in Ethiopia, account ownership by men increased by roughly twice the size of the increase among women since 2014.\r\n\r\nWe must invest in building women\u2019s financial capability to close this gap and make meaningful progress in women\u2019s access to and usage of financial services. Doing so will require a deeper understanding of the economic and social constraints women face in accessing financial services. Yet existing tools for building financial capability have a mixed track record and there is scarce evidence on which approaches and delivery channels are likely to produce lasting impact.\r\n\r\nThis publication examines how best to share information, build capability, and enable lasting behavior change in a context in which women may have limited say in their own economic choices or require additional support or flexibility to overcome trust and care responsibilities. We examine the characteristics and success of existing approaches to building women\u2019s financial capability and find a gap in programming that sufficiently accounts for women\u2019s preferences, which are largely influenced by gendered social norms.\r\n\r\nReaders of this report will come away with:\r\n Mobile money agents serve as the infrastructural backbone of the mobile money system and are brand ambassadors of digital finance providers. They are often a community\u2019s human touch point<\/a> to mobile money, helping build their communities\u2019 capabilities in mobile money services and products. Agents provide essential services to individuals and businesses in rural and other difficult to reach areas not served by traditional financial institutions, but are limited by their own liquidity. Many agents tend to have a limited amount of cash on hand \u2014 approximately two months\u2019 worth in Kenya, for instance \u2014 to be able to buffer against any emergency or shock, founder and CEO Andrew Matua said in a December 2020 interview.<\/p>\n In serving a network of more than 7,600 mobile money agents across Kenya (and soon Tanzania), the majority of whom run microbusinesses of their own in addition to their mobile money businesses, PesaKit has a deep understanding of the links between financial resilience and financial health, and crucially the interconnectedness between the microentrepreneurs\u2019 household finances and the businesses themselves. PesaKit\u2019s goal is to strengthen their agents\u2019 defenses against emergencies or shocks by building a safety net of Ksh 15,000 to Ksh 60,000 so that agents and their families can sustain themselves for a period of one to four months without any income.<\/p>\n <\/p>\n To accomplish this, after completing a simple onboarding process, PesaKit equips agents with liquidity management tools, which are crucial to agents\u2019 ability to build and maintain trust with their customers. Liquidity management remains a notoriously difficult challenge in operating mobile money agent networks, and as noted by PesaKit founder and CEO Andrew Mutua, liquidity is \u201cactually what they [agents] are in business for. If they have enough float or enough cash, they are able to serve customers. If you don\u2019t have that [as an agent], you are losing income and you are also losing your reputation and the community trust.\u201d<\/p>\n Liquidity management remains a notoriously difficult challenge in operating mobile money agent networks.<\/p><\/blockquote>\n Leveraging data generated through agents\u2019 interactions with PesaKit\u2019s app and predictive analytics, its cash flow insights tool provides agents with the granular information agents need to effectively manage their liquidity, such as how much cash they need, how much float they need, how many customers they might serve, and how much they might earn in commissions.<\/p>\n The biggest challenge for PesaKit has been getting enough robust and consistent data to provide agents with accurate and relevant business insights. While M-Pesa\u2019s continued domination of the Kenyan mobile money market impedes PesaKit\u2019s ability to directly access some mobile money transaction data, PesaKit collects other data through agents\u2019 interaction with its app that reveals key information about agents\u2019 businesses (e.g., demand, business operations, footfall). This information helps agents access small loans that will then generate a credit history and afford them the opportunity to access larger value loans over time.<\/p>\n The pandemic reinforced the important role of PesaKit\u2019s data-driven model, as COVID-19 presented significant challenges to business as usual. At the height of the pandemic, starting in March 2020, the Kenyan government imposed a strict 7 p.m. curfew, which curtailed agents\u2019 hours of operation, restricted the movement of cash, and placed a heavier financial burden on agents overall. PesaKit agents faced increased costs to rebalance their cash flows, as customers were making more deposits than withdrawals, coupled with having to equip their locations with the personal protective equipment, hand sanitizers, cleaning products, and masks they needed to be able to serve their customers safely while observing social distancing guidelines.<\/p>\n To strengthen agents\u2019 social safety net in this time of immense need, PesaKit introduced a 12-month hospital cash insurance cover to provide agents with greater financial security if they tested positive, were quarantined, or were hospitalized due to COVID-19. Again, PesaKit\u2019s proximity to clients enabled them to move quickly and provide appropriate services to help their customers navigate these difficult times.<\/p>\n"},{"acf_fc_layout":"text_block","heading":"reach 52","quick_links":false,"heading_label":"","subheader":"","body":" reach52 seeks to shield low-income, underserved households in rural areas from the disruptive financial burden of out-of-pocket (OOP) health expenditures and protect their livelihoods by providing access to affordable and comprehensive health insurance and healthcare services.<\/p>\n Research by CGAP<\/a> found that those living in low- and middle-income countries pay as much as 60 percent of their health expenditures out of pocket. An unexpected health crisis can force a family to make one of two nearly impossible choices: borrow from an informal moneylender at great expense or sell a household asset to make ends meet. If neither of these are options, families have to suffer poor, if not catastrophic, health outcomes by rationing necessary medical treatment or forgoing it entirely.<\/p>\n <\/p>\n Insurance products are meant to help households avoid facing any of those decisions, yet providers often find that insurance is a difficult product to sell to low-income, underserved households<\/a>. Consumers with less experience or comfort with the formal financial system don\u2019t always understand the basics of how insurance works, how it benefits them, what adverse events it protects or mitigates against, and how claims on their policies are paid. Rather than focusing on the intangible nature of insurance and the functional details of their plans and policies, reach52 taps into the emotional and practical benefits of insurance. \u201cNobody really wants to buy insurance,\u201d notes Rich Bryson, Chief Strategy and Marketing Officer at reach52. \u201cBut everybody does want to protect their families and look after them. That is a universal trait and that is absolutely the case in the communities that we\u2019re operating in.\u201d<\/p>\n \u201cNobody really wants to buy insurance. But everybody does want to protect their families and look after them.\u201d<\/p><\/blockquote>\n reach52 builds on communities\u2019 trust of local leaders, fellow residents, and community-based nongovernmental organizations that are already locally embedded to drive adoption of its insurance products and to scale its solutions more widely. \u201cTrust is absolutely huge,\u201d continues Bryson. \u201cThere can be distrust of external organizations in communities where information is less available and quite a lot of scamming goes on. Partnering with NGOs and individuals in the communities to run the services helps to overcome this. You can then build trust obviously as more people use the service and by sharing positive claims stories, showing how community members have benefited from insurance when they needed it most.\u201d<\/p>\n reach52 recruits and equips Marketplace Area Managers (MAMs) from these aforementioned groups to lead its outreach and onboarding efforts, either in sites directly managed by reach52, or those run by reach52\u2019s on-the-ground partners such as NGOs. MAMs serve as the bridge that connects low-income and rural clients with established insurance providers, using the reach52 marketplace mobile app to help clients find affordable health coverage, as well as prescription and over-the-counter medicines to meet their unique needs.<\/p>\n reach52 drew from a wealth of guidance from its local teams and partners to understand how it could operate safely given travel restrictions and social distancing protocols. With its teams not able to travel, the fintech shifted to focus on its strategy, response, and the development of remote services that could help healthcare workers and the local community. For instance, they developed Facebook Messenger-enabled health chatbot services \u2014 used by more than 100,000 people \u2014 for sharing information on topics such as COVID-19 and its symptoms.<\/p>\n Specifically, reach52 has focused its recent efforts on combatting COVID-19, addressing barriers to healthcare access the pandemic has created for rural and low-income populations, and examining the adverse economic impacts it has had on livelihoods. In partnership with Johnson & Johnson<\/a>, reach52 has provided upskilling and remote learning opportunities for nearly 2,000 of its community health workers in the Philippines and Cambodia through its mediconnect platform. It has also expanded the range of healthcare products and services available through the reach52 marketplace, including reach52\u2019s launch into India<\/a> and Cambodia<\/a>.<\/p>\n reach52 has focused its recent efforts on combatting COVID-19, addressing barriers to healthcare access the pandemic has created for rural and low-income populations<\/p><\/blockquote>\n More broadly, the increased focus on global health and health access issues has accelerated reach52\u2019s partnerships with public and private sector health actors and other key stakeholders, including Pfizer, Biocon, Allianz, and UNICEF Innovation, among others. These new initiatives have ranged from exploring new models of care to address both communicable and chronic health conditions (e.g., dengue fever, diabetes, and hypertension) to new insurance plans and mobile wallet services for low-income communities.<\/p>\n"},{"acf_fc_layout":"text_block","heading":"Conclusion ","quick_links":false,"heading_label":"","subheader":"","body":" reach52 and PesaKit credit their success to placing their end users at the center of everything they do. By focusing on developing solutions that address customer pain points and working to provide additional opportunities for agents to generate income, PesaKit stakes its success on the success of its agents, which it believes will build and maintain customer loyalty and is key to the sustainability of its business over time.<\/p>\n Emphasizing the importance of community and global health, Bryson of reach52 argues that \u201cno one is protected until everyone is protected [\u2026] it is critical that we look at global health and by nature the global economy\u201d as being interconnected in this way.<\/p>\n As the world continues to grapple with the health and economic fallout from the COVID-19 pandemic, the financial needs of customers will continue to evolve. Inclusive fintechs must remain agile and continue adapting to the ever-changing context and evolving needs of their customers. Doing so can help customers manage their immediate needs while also building their financial resilience to mitigate against future crises.<\/p>\n"},{"acf_fc_layout":"logo_wall","title":"Inclusive Fintech 50 Sponsors","heading":"","description":"","logo_cards":[{"logo":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2018\/08\/Screen-Shot-2018-08-31-at-3.31.34-PM.png","company_title":"Metlife Foundation ","meta_label":"","description":"","link_url":"https:\/\/www.metlife.com\/sustainability\/MetLife-sustainability\/MetLife-Foundation\/"},{"logo":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2021\/01\/Visa_2014_logo_detail.jpg","company_title":"Visa ","meta_label":"","description":"","link_url":"https:\/\/usa.visa.com\/about-visa\/philanthropy\/visa-foundation.html"},{"logo":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2021\/01\/blackrock-inc-vector-logo.png","company_title":"BlackRock","meta_label":"","description":"","link_url":"http:\/\/www.blackrock.com"},{"logo":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2019\/04\/CRJOA_Logo_White_Background_RGB-1.png","company_title":"Jersey Overseas Aid and Comic Relief","meta_label":"","description":"","link_url":"https:\/\/www.comicrelief.com\/partners\/jersey-overseas-aid\/"},{"logo":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2018\/09\/Accion.jpg","company_title":"Accion ","meta_label":"","description":"","link_url":"https:\/\/accion.org"},{"logo":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2018\/08\/ifc_vertical_logo.jpg","company_title":"IFC","meta_label":"","description":"","link_url":"http:\/\/www.ifc.org"}]}],"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""}},"url":"agility-breeds-resilience-a-tale-of-two-fintechs-innovating-in-the-face-of-a-pandemic"},{"ID":37699,"post_author":"75","post_date":"2020-02-03 11:23:39","post_date_gmt":"2020-02-03 15:23:39","post_content":"In January, I joined Caribou Digital\u2019s immersive Live Learning<\/a> program in Indonesia. The program included visits to all the major digital players in the country including ride hailing, e-commerce, digital payments, peer-to-peer platforms and digital value chain actors. One of the most interesting parts of the program was talking to the merchants, producers and gig workers who are using the new digital economy to make a living. Many of these digital platforms that are driving this new economy rely on a ubiquitous digital payment system that\u2019s enabling transactions to take place between micro-merchants and gig workers and the buyers of their products and services. Ride and e-commerce platforms are not only serving as an important driver to bring people into the formal financial system, they\u2019re creating new and more lucrative opportunities for work for millions of merchants, producers and service workers.\r\n\r\nIn the West, the rise of the gig economy and the platforms that enabler it has been viewed by some as contributing to the deterioration of stable jobs and an erosion of worker protections<\/a>. While the gig economy is recognized for offering workers flexibility and a chance to be their own bosses, there\u2019s evidence that remuneration has not lived up to what many of the gig platforms promise, and workers are working longer hours for less<\/a>.\r\n The impact of these platforms on the Indonesian economy are being noticed. In 2018, Tokopedia generated 10.3 percent of all new jobs<\/a> (in the form of merchants) in Indonesia. Grab<\/a>, the other major ride hailing platform, currently has 2.6 million agents which serve 46 million end users. Incomes of agents increased by 30 percent last year.<\/p>\n These benefits were evident when we met with individual agents, merchants and gig workers. One merchant we met who sells skull caps made from bamboo on three e-commerce sites was able to add an important livelihood to his normal construction job when he discovered he could buy from local producers and market on these e-commerce sites himself. He only had a primary school education, but he was able to get the hang of these e-commerce sites on his own. Another woman who works as a masseuse on the GoMassage platform hosted on Gojek had nearly doubled her income as the platform has expanded her market substantially. We heard similar stories from agents, drivers, and cleaners who deliver their services on these platforms.<\/p>\n We need to focus attention on research and documenting the impact of these new jobs in emerging markets.<\/p><\/blockquote>\n Undoubtedly the individuals we met were not representative of the entire universe of merchants and gig workers in Indonesia. To better understand whether these anecdotal experiences are exceptions or the norm, we need to focus some attention on doing research and documenting the impact of these new jobs of the future in emerging markets. This will certainly be an area of focus for CFI in the future. Stay tuned.<\/p>\n"},{"acf_fc_layout":"image","image":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2020\/02\/grab-kios-indonesia-live-learning.jpg","caption":"Grab, known primarily as a ride hailing platform in Southeast Asia, also offers offline-to-online payments and digital onboarding through agent networks, especially in rural areas where digital finance penetration is lacking. ","full_width":false}],"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""}},"url":"financial-inclusion-and-future-jobs-what-the-market-in-indonesia-tells-us"},{"ID":31988,"post_author":"62","post_date":"2017-11-08 21:21:05","post_date_gmt":"2017-11-08 21:21:05","post_content":"Contrary to the popular narrative, financial institutions view fintechs as partners in innovation, not threats to their core business. By offering better, less expensive, and more innovative products, financial institutions can assert their continued relevance as customer-facing institutions with help from fintech partnerships.\r\n\r\nThis webinar will explore how partnerships between mainstream financial institutions (e.g., banks, insurers, and payment companies) and fintechs are addressing financial inclusion challenges and expanding access to the formal financial economy for underserved segments of the global population, particularly in emerging markets. It will share insights from a recent report from the Center for Financial Inclusion and the Institute of International Finance.\r\n\r\nThe report incorporates 24 in-depth interviews with people at the frontlines of this innovation and highlights 14 partnerships focused on financial inclusion that we think exemplify best-case scenarios and good practice.","post_title":"Webinar: How Financial Institutions and Fintechs Are Partnering for Inclusion","post_excerpt":"","post_status":"publish","comment_status":"open","ping_status":"open","post_password":"","post_name":"how-financial-institutions-and-fintechs-are-partnering-for-inclusion","to_ping":"","pinged":"","post_modified":"2018-09-17 13:16:57","post_modified_gmt":"2018-09-17 13:16:57","post_content_filtered":"","post_parent":0,"guid":"http:\/\/cfi.accion.flywheelsites.com\/?p=31988","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2018\/09\/How-Financial-Institutions-and-Fintechs-Are-Partnering-for-Inclusion.png","acf":{"types":{"term_id":3126,"name":"Webinar","slug":"webinar","term_group":0,"term_taxonomy_id":3126,"taxonomy":"types","description":"","parent":0,"count":13,"filter":"raw","term_order":"0"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":""},"post_default":{"description":""}},"authors":[{"ID":26351,"post_author":"1","post_date":"2018-08-20 13:50:32","post_date_gmt":"2018-08-20 13:50:32","post_content":"","post_title":"Sonja Kelly","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"sonja-kelly","to_ping":"","pinged":"","post_modified":"2021-04-21 12:14:58","post_modified_gmt":"2021-04-21 16:14:58","post_content_filtered":"","post_parent":0,"guid":"http:\/\/cfi.accion.flywheelsites.com\/people\/sonja-e-kelly\/","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":26360,"post_author":"1","post_date":"2018-08-20 13:50:32","post_date_gmt":"2018-08-20 13:50:32","post_content":"","post_title":"Allyse McGrath","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"allyse-mcgrath","to_ping":"","pinged":"","post_modified":"2018-09-05 19:25:26","post_modified_gmt":"2018-09-05 19:25:26","post_content_filtered":"","post_parent":0,"guid":"http:\/\/cfi.accion.flywheelsites.com\/people\/allyse-mcgrath\/","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":28638,"post_author":"66","post_date":"2018-08-30 20:16:56","post_date_gmt":"2018-08-30 20:16:56","post_content":"","post_title":"Dennis Ferenzy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"dennis-ferenzy","to_ping":"","pinged":"","post_modified":"2018-08-30 20:16:56","post_modified_gmt":"2018-08-30 20:16:56","post_content_filtered":"","post_parent":0,"guid":"http:\/\/cfi.accion.flywheelsites.com\/?post_type=people&p=28638","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":[{"acf_fc_layout":"iframe","title":"","view_more_button_text":"","view_more_button_url":"","iframe_code":"\n
\r\n \t
China to big tech: put on your helmets, because we are getting off the sidelines.<\/blockquote>\r\nIn the last four months, China has published a slew of regulations (some still in draft form) aimed at big tech and their outsized role in the economy. This includes the draft Personal Information Protection Law<\/a> (PIPL), new rules including capital requirements and caps for online lenders, as well as draft anti-trust rules for digital platforms. And, dramatically, China called off Ant Group\u2019s globally anticipated IPO in November, in December launched an anti-trust probe into Ant\u2019s ecommerce parent Alibaba, and in February 2021 told Ant to restructure itself into a financial holding company.\r\n\r\nThe scale of big tech\u2019s reach into China\u2019s financial sector is worth reiterating. A billion Chinese consumers<\/a> use Alipay, owned by Ant, to pay for everything from groceries (even in the U.S.<\/a>) and utilities, to school tuition and traffic tickets. Alipay, and its competitor WeChat Pay (owned by TenCent), have deftly created business models that leverage increasing use of smartphones, allow for easy funding of digital wallets through linked bank accounts, and coax users into their digital ecosystem through low transaction fees and an ever-increasing array of services. Cross-selling through this ecosystem can be lucrative. For instance, Alibaba\u2019s product Yu\u2019E Bao rapidly became the largest money market fund in the world for a time.\r\n\r\nMore recently, Ant has received attention for facilitating hundreds of millions of online loans to consumers, many of whom could not qualify for bank-issued credit cards. Despite the mammoth amount of outstanding debt, Ant has taken on limited risk and acted as more of a facilitator than a lender. For instance, at the end of June 2020, Ant had approximately $267 billion in outstanding consumer debt, but just 2 percent of that amount was funded by Ant.\r\n\r\nWhose portfolios are on the hook? Ant has partnered with more than 100 commercial lenders and regional banks, collecting fees on interest income from them, and utilized colossal troves of transactional Alipay data to facilitate underwriting. This frenzy of unsecured lending has raised concerns around the concentration of risk that sits with lenders and not facilitating platforms.\r\n
Ant has utilized colossal troves of transactional Alipay data to facilitate underwriting.<\/blockquote>\r\n
New Rules of the Road<\/h2>\r\nNew regulation from China\u2019s Banking and Insurance Regulatory Commission clamps down on both sides of the online lending partnerships. For the lenders, regional banks are no longer permitted to lend outside their geographies, and there will be new caps on how much of a bank\u2019s capital and portfolio can be lent online. And for the platforms, starting in 2022, they will have to fund at least 30 percent<\/a> of every loan they make in concert with banks. These measures may take some needed steam out of the ballooning online lending market.\r\n\r\nDigital platforms are also the subject of new draft anti-monopoly rules<\/a> by the State Administration for Market Regulation, which targets practices such as the use of data and algorithms to offer different prices to different consumers, as well as self-dealing through elevating their in-house products compared to competitors who are selling on their platform. As they take comments on proposed revisions, antitrust authorities have increased the number of investigations and in recent months fined Alibaba, Tencent Holdings as well as smaller platforms like Pinduoduo and Meituan.\r\n\r\nThe PIPL, when approved, will be the country\u2019s first comprehensive data protection regime applicable to all data processors, including big tech. The draft PIPL contains some similarities to the European GDPR<\/a>, including provisions for the legal basis for processing data and enumerating data rights for consumers such as the right to rectify data mistakes. PIPL diverges from GDPR in terms of a larger focus on data localization, however.\r\n\r\nTaken in aggregate, the package of emerging regulations demonstrates resolve among Chinese authorities to get tougher in the face of the enormous market power of big tech, which during the pandemic only embedded itself further into daily life.\r\n\r\nHowever, beyond the heavyweight bouts between big tech and political authorities and implications for the companies, it is important to monitor how consumers are impacted by the new rules. Hopefully, consumers will benefit from more responsible online lending practices, fewer scams and predatory pricing, and more communication around the use of their data. As one Chinese internet regulator stated, consumers should not be \u201cprisoners to algorithms<\/a>.\u201d We\u2019ll be closely watching the market to understand how fintechs and consumers are responding and to understand what lessons other markets might draw from the Chinese approach to checking the power of big tech.\r\n\r\nIn the meantime,\u00a0 read our recent publication, The Stories Algorithms Tell: Bias and Financial Inclusion at the Data Margins<\/em><\/a>, about how FSPs are using algorithmic data to make credit decisions, how those affect low-income consumers globally, and what regulators can and should do.","post_title":"Regulatory Headwinds on the Horizon for Chinese Fintechs: Where Do Consumers Fit In?","post_excerpt":"","post_status":"publish","comment_status":"open","ping_status":"open","post_password":"","post_name":"regulatory-headwinds-on-the-horizon-for-chinese-fintechs-where-do-consumers-fit-in","to_ping":"","pinged":"","post_modified":"2021-04-01 13:40:03","post_modified_gmt":"2021-04-01 17:40:03","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?p=42139","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2021\/04\/Shanghai-china-night-street-people-walking-neon-signs.jpg","acf":{"types":{"term_id":3123,"name":"Blog Post","slug":"blog-post","term_group":0,"term_taxonomy_id":3123,"taxonomy":"types","description":"","parent":0,"count":2142,"filter":"raw","term_order":"0"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":""},"post_default":{"description":""}},"authors":[{"ID":26330,"post_author":"1","post_date":"2018-08-20 13:50:31","post_date_gmt":"2018-08-20 13:50:31","post_content":"","post_title":"Alexandra (Alex) Rizzi","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"alexandra-alex-rizzi","to_ping":"","pinged":"","post_modified":"2021-03-02 17:16:39","post_modified_gmt":"2021-03-02 21:16:39","post_content_filtered":"","post_parent":0,"guid":"http:\/\/cfi.accion.flywheelsites.com\/people\/alexandra-rizzi\/","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":false,"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""}},"url":"regulatory-headwinds-on-the-horizon-for-chinese-fintechs-where-do-consumers-fit-in"},{"ID":41199,"post_author":"75","post_date":"2021-01-26 18:17:11","post_date_gmt":"2021-01-26 22:17:11","post_content":"The severe economic impacts of COVID-19 on low-income households and small businesses have underscored the need for innovative solutions that can build greater financial resilience. Findings from surveys of MSMEs<\/a> conducted by the Center for Financial Inclusion (CFI) show that since COVID-19 struck, many small businesses in Indonesia, Colombia, and Nigeria have either had to close or found their profits significantly decreased. At the same time, the pandemic has provided opportunities for inclusive fintechs to leverage their agility and adaptability<\/a> to strengthen and support the financial resilience of low-income, financially underserved customers.\r\n\r\nFinancial resilience is the ability to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates inclusive growth. Individuals must deftly navigate a delicate balancing act to stay afloat and may be thrown off course by a whole host of shocks, ranging from unexpected health crises to weather-related disasters that can disrupt otherwise appropriate financial plans. The nuances associated with financial resilience can complicate the financial service industry\u2019s ability to develop and design comprehensive solutions for low-income customers.\r\n
PesaKit and reach52, two winners of the 2020 Inclusive Fintech 50, have responded to the extraordinary challenges posed by the COVID-19 pandemic by continuing to innovate to meet their customers\u2019 needs.<\/blockquote>\r\nPesaKit and reach52, two winners of the 2020 Inclusive Fintech 50<\/a> -- a competition founded by MetLife Foundation and Visa, with support from Accion and IFC, and additional funding from BlackRock and Jersey Overseas Aid & Comic Relief -- have responded to the extraordinary challenges posed by the COVID-19 pandemic by continuing to innovate to meet their customers\u2019 needs. In this paper, we share insights on how these two fintechs have adapted to a challenging economic landscape to serve as early examples of how fintechs have leveraged their agility and innovation during crisis. These findings build on the 2020 Inclusive Fintech 50 white paper<\/a> that draws on the data submitted by the 2020 cohort of applicants and highlights how fintechs are continuing to advance financial inclusion and resilience for the estimated 3 billion financially underserved people worldwide.","post_title":"Agility Breeds Resilience: A Tale of Two Fintechs Innovating in the Face of a Pandemic","post_excerpt":"","post_status":"publish","comment_status":"open","ping_status":"open","post_password":"","post_name":"agility-breeds-resilience-a-tale-of-two-fintechs-innovating-in-the-face-of-a-pandemic","to_ping":"","pinged":"","post_modified":"2021-01-28 14:25:27","post_modified_gmt":"2021-01-28 18:25:27","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?p=41199","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2021\/01\/two-african-women-looking-at-phone-NK.png","acf":{"types":{"term_id":29,"name":"Brief","slug":"brief","term_group":0,"term_taxonomy_id":29,"taxonomy":"types","description":"","parent":0,"count":14,"filter":"raw","term_order":"0"},"header":{"header_type":"post_cover","post_cover":{"description":""},"post_aligned":{"description":""},"post_default":{"description":""}},"authors":[{"ID":26368,"post_author":"1","post_date":"2018-08-20 13:50:32","post_date_gmt":"2018-08-20 13:50:32","post_content":"","post_title":"Tess Johnson","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"tess-johnson","to_ping":"","pinged":"","post_modified":"2021-03-31 16:07:45","post_modified_gmt":"2021-03-31 20:07:45","post_content_filtered":"","post_parent":0,"guid":"http:\/\/cfi.accion.flywheelsites.com\/people\/tess-johnson\/","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":[{"acf_fc_layout":"text_block","heading":"PesaKit","quick_links":false,"heading_label":"","subheader":"","body":"
Providing a Lifeline to Mobile Money Agents<\/h2>\n
Protecting Agents from the Pandemic\u2019s Worst Economic Impacts<\/h3>\n
Leveraging Community Trust to Expand Access to Healthcare<\/h2>\n
Expanding Service Offerings and Forging New Partnerships<\/h2>\n
Beyond COVID<\/h2>\n
Most emerging economies never had the secure jobs that the gig economy is purportedly displacing.<\/blockquote>\r\nThis narrative in the West does not appear to translate to emerging economies, at least not what was evident from the market in Indonesia. For one thing, most emerging economies never had the secure jobs that the gig economy is purportedly displacing. Instead, the digital platforms are enabling a certain formalization of informal work that has thus far remained inferior to formal jobs. The new digital platforms are contributing to standardizing and organizing a set of workers who had previously been left to fend for themselves.\r\n\r\nThere are three important contributions that platforms are making toward the lives of merchants and gig workers in Indonesia:\r\n
1 Investing in Skills<\/h2>\r\nIt was striking to see the type of investment that many of the platforms in Indonesia are making in training the merchants or the gig workers on their platforms. For example, Indonesia\u2019s main e-commerce platforms, Tokopedia<\/a> and Bukalapak<\/a>, both offer many learning opportunities for their merchants including in person events and video streaming \u201ctips\u201d that cover topics such as taking appealing pictures of their products and getting halal certification to expand the appeal of their products among religious Muslim customers.\r\n
2 Putting in Place Social Protections<\/h2>\r\nGojek<\/a>, one of Indonesia\u2019s super apps that began in ride hailing but has expanded to other lifestyle services, currently offers a form of social protection to its drivers, something they call Swadaya. The rationale for the company is that this improves the loyalty of its drivers in a fiercely competitive market. The benefits to the drivers are clear: health insurance and unemployment benefits if they fall ill.\r\n
3 Facilitating Access to Financial Services<\/h2>\r\nNearly all the platforms are layering multiple financial services for their merchants and gig workers. Digital credit, insurance, and investment products such as e-gold and mutual funds are all currently available in the market. This is enabling merchants and gig workers to grow their businesses and to have access to financial services that improve their resilience to shocks.","post_title":"Financial Inclusion and Future Jobs: What the Market in Indonesia Tells Us","post_excerpt":"","post_status":"publish","comment_status":"open","ping_status":"open","post_password":"","post_name":"financial-inclusion-and-future-jobs-what-the-market-in-indonesia-tells-us","to_ping":"","pinged":"","post_modified":"2020-02-03 12:09:52","post_modified_gmt":"2020-02-03 16:09:52","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?p=37699","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2020\/02\/LinkAja-Mayada-pay-fruit-stall-QR.jpg","acf":{"types":{"term_id":3123,"name":"Blog Post","slug":"blog-post","term_group":0,"term_taxonomy_id":3123,"taxonomy":"types","description":"","parent":0,"count":2142,"filter":"raw","term_order":"0"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":"The gig economy is sometimes viewed as an adversary of job security and worker protections. In Indonesia, it's a different story. "},"post_default":{"description":""}},"authors":[{"ID":36411,"post_author":"75","post_date":"2019-09-09 08:00:33","post_date_gmt":"2019-09-09 08:00:33","post_content":"","post_title":"Mayada El-Zoghbi","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"mayada-el-zoghbi","to_ping":"","pinged":"","post_modified":"2021-07-13 15:13:26","post_modified_gmt":"2021-07-13 19:13:26","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?post_type=people&p=36411","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":[{"acf_fc_layout":"image","image":"https:\/\/cfi.accion-staging.flywheelsites.com\/wp-content\/uploads\/sites\/2\/2020\/02\/tokopedia-group.jpeg","caption":"Live learning participants at Tokopedia's headquarters in Jakarta. Tokopedia generated an estimated 10 percent of all new jobs in Indonesia in 2018. ","full_width":false},{"acf_fc_layout":"text_block","heading":"","quick_links":false,"heading_label":"","subheader":"","body":"