Michael Corbat, CEO of Citigroup, helped to set the tone with a compelling case for the private sector’s vital role in financial inclusion. Not only does financial inclusion matter for the excluded, he insisted, there is also a value proposition that aligns with business strategy for financial institutions. “As we look to the future and the three dominant secular trends against which we've positioned our business— globalization, urbanization and digitization— financial inclusion is a goal that is closely aligned with all three trends and with our effort to seize them for our clients.”
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Meet the Providers
The FI2020 team was excited to bring together many representatives of the growing number of start-ups that challenge traditional methods of reaching the excluded, and offer promise for accelerating financial inclusion.
Zoona, a Zambia-based electronic payments startup, builds distributor and agent networks to increase liquidity for cash-in/cash-out services. Cignifi and DemystData use alternative sources of customer data (e.g. mobile phone or online activity data) to estimate credit risk through advanced algorithms and analytical techniques that go beyond traditional credit scoring . Kopo Kopo brings mobile financial services to small and medium enterprises by enabling them to accept, process, and manage mobile payments. GloboKasNet trains and equips small shop owners and merchants in Peru to act as banking agents in hard-to-serve localities. Tiaxa works with mobile operators across 11 countries to provide mobile financial services to low-income clients, including very small “Balance Advance” loans. M-KOPA supplies solar energy systems and eventually other tangible assets using a unique mobile money platform to make extended financing possible. Juntos Finanzas partners with financial institutions to embed financial capability into mobile financial services through personalized text messages that encourage savings and remind clients of money spent.
All these start-ups introduce new ways of doing business and have the potential to change traditional business models.
Microinsurance at the Forefront of Financial Inclusion?
The opening plenary of the Forum highlighted microinsurance, and with good reason. Alexia Latortue, US Treasury, moderated a discussion featuring two leaders in microinsurance, Michel Khalaf, MetLife, and Martyn Parker, Swiss Re. These global leaders believe that microinsurance can work in emerging markets and that companies such as theirs will increasingly reach new and underserved customers. Low-income people face challenges of managing risk, whether due to health, natural disaster, or a household disaster such as fire. However, products must be adapted to the needs of the customers and their specific culture, which makes having a physical presence and close interactions with customers vitally important.
Michael Corbat, CEO, Citigroup, Kicks off the Forum