Financial Inclusion 2020: Essential Debates FI2020 Week Roundup - Page 8

Partnerships are critical to moving financial inclusion efforts forward, as each player in the financial ecosystem has different strengths to offer. This theme reverberated throughout FI2020 Week.

Nowhere was this call for partnerships stronger than in sub-Saharan Africa. VisionFund Zambia noted that in order for delivery channels to reach more people in rural areas, more effort must be put into strategic partnerships between mobile network operators, financial services providers, NGOs, and the government. VisionFund brought together the Bank of Zambia, the Catholic Diocese of Ndola, World Vision Zambia, Zoona Money transfer, Cavmont Capital Bank—a regulator, the church, a fintech start-up, and a commercial bank, among others in its event. Another event on credit in Kenya hosted by CGAP revealed opportunities for policymakers and regulators to collaborate with new market entrants to better understand new business models such as those employed by digital providers and those leveraging non-traditional data scoring tools. In Nigeria, a country where over 55 million adults lack access to an account, an event hosted by Accion emphasized that financial inclusion necessitates a spirit of collaboration and partnership among various partners including microfinance institutions and financial technology providers.

Throughout the world, FI2020 week participants emphasized the ecosystem of providers and delivery mechanisms. In Bangladesh, at an event hosted by BRAC, participants named the lack of supportive ecosystem, including inadequate credit reporting and identification systems, as a critical barrier to offering responsible financial services. Tagattitude in France underscored the importance of payment ecosystems that allow people to use their phones to perform daily transactions. At an event hosted by Accion in Colombia, Diego Afanador of Banco Caja Social emphasized, “We need to understand that full financial inclusion will be achieved through the creation of an ecosystem where each player can add value with the purpose of overcoming the root causes of poverty.” Seeking to improve the ecosystem, GSMA discussed its code of conduct which increases the confidence that public and private sector partners have in institutions providing mobile money, smoothing connections across the ecosystem. A World Savings Bank Institute webinar emphasized that partnerships between savings banks and other institutions can build on the strengths of their members, driving down costs of services. Rather than trying to do everything, they emphasized the need for financial institutions to focus on what they do well.

Partnerships are resulting in more efforts to share and use data to better understand client behavior, to construct better products, and to assess the business case for financial inclusion. MIX noted in its webinar the importance of sharing large-scale reliable and comparable client-level data. Indeed, they demonstrate this better than most organizations. At an event hosted by LeapFrog, Leora Klapper of the World Bank noted that providers have an opportunity to leverage digitized payments to engage people who are just entering the formal financial system—from rural farmers who receive agriculture payments to parents who pay school fees through a mobile device. IPA took the call for shared data one step further, emphasizing that the sharing of client-level data can help providers know how to “nudge” customers in a particular direction, building on an understanding of customer needs and customer behavior. Examples of these nudges include providing information that prompts people to save more for retirement or building in financial capability-building into product design.

The FI2020 Week Story

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The Importance of Partnerships and an Enabling Ecosystem

FI2020 Week Roundup