MICROFINANCE PUBLICATION ROUND-UP: Improving Financial Capability in India, Mexico; Mobile Money Usage; Post-Disaster, Post-Conflict Microfinance

“A Change in Behavior: Innovations in Financial Capability;” by J. Arnold, E. Rhyne; published by the Center for Financial Inclusion at Accion, JPMorgan Chase & Co; April 2016; 47 pages; available at: https://centerforfinancialinclusionblog.files.wordpress.com/2016/04/a-change-in-behavior-final.pdf

This report addresses the effectiveness of “financial capability interventions” in Mexico and India with the aim of determining how to improve the offerings of financial service providers, governments and “social sector actors”. The authors define financial capability as “the combination of knowledge, skills, attitudes and behaviors a person needs to make sound financial decisions that support well-being”. Six recommendations are given with regard to improving it: 1. “Bring financial capability efforts closer to the users of financial services by enabling providers to take a greater role;” 2. “Strengthen the government’s focus on promoting shared responsibility among all stakeholders, in addition to its own role;” 3. “Engage organizations serving the bottom of the pyramid, from social service agencies to employers to non-profits;” 4. “Incorporate proven elements that support behavior change into existing financial education efforts;” 5. “Measure results rigorously;” and 6. “Foster customer-led financial capability.”

“Inside the World of Mobile Financial Services: What People Want;” by Ovum; published by Amdocs; September 2015; 22 pages; available at: http://lp.mobilemoneytime.com/mfs-what-consumers-want-wp/

Conducted by Ovum, a UK-based research consultancy, this report focuses on the usage of mobile financial services in 17 countries. The findings are: 1. 68 percent of respondents have yet to use mobile financial services; 2. “Lack of market awareness and misperceptions about mobile financial services are still key concerns;” 3. “Savings, loans, insurance & payment solutions for medical treatment and education services will drive the next level of growth in mobile financial services;” and 4. “Increased security, low transaction charges, ease of use, rewards for using the service, and service ubiquity are key adoption drivers.”

Eden Zoller, principal analyst at Ovum said, “The ubiquity and convenience – the ability to use mobile financial services anytime, anywhere – was the overwhelming benefit cited by survey respondents in both emerging and mature markets. […] This represents positive progress, but mobile financial services providers can’t afford to be complacent as the research clearly shows that there are fundamental issues and challenges that still need to be addressed, ranging from security concerns and ease of use, to lack of awareness.”

“Microfinance in Post-Disaster, Post-Conflict Areas and Fragile States: Resilience and Responsibility;” by S. Mendelson, D. Forcella, Y. Gurgoz, D. Rozas, G. Erice; published by European Microfinance Platform; April 2016; 32 pages; available at: http://www.e-mfp.eu/sites/default/files/resources/2016/04/9th%20Dialogue_2015_European%20Microfinance%20Award_web.pdf

The authors of this report analyzed microfinance institutions (MFIs) in difficult environments, such as conflict areas and fragile states, to find examples of the most effective and sustainable strategies in the client and organizational needs. The performance was analyzed based on nine criteria: (1) “Immediate Humanitarian Response”; (2) “Adapting Core Financial Services”; (3) “Awareness Building & Psychological Support”; (4) “Innovating With Products”; (5) “Planning Ahead”; (6) “Making Partnerships”; (7) “Taking Care of Staff”; (8) “Ensuring Financial Sustainability”; and (9) “Leading by Example”. Of the 47 MFIs analyzed, three made it to the finals, those were: (i) The First Microfinance Institution Syria (FMFI-S); (ii) Taytay Sa Kauswagan Inc. (TSKI) and (iii) Credit Rural de Guinee (CRG). CRG was named the winner.

By Kevin van den Brink, Research Associate

Sources and Additional Resources

MicroCapital Universe Profile: Accion

MicroCapital Universe Profile: European Microfinance Platform (e-MFP)

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