DFS

DFS

Lao PDR Annual Monitor 2016

DFS

Thu, 07/06/2017 - 08:46 -- anna.ferracuti

Lao People's Democratic Republic (Lao PDR), a country in Southeast Asia with 6.9 million people, has started the journey towards digitizing its cash-based economy and introducing digital financial services (DFS) to thousands of previously unbanked customers. There are several providers in the market that have begun to develop their DFS offerings.

High Volume Payments in the Tea Value Chain

DFS

Tue, 09/26/2017 - 14:09 -- anna.ferracuti

The majority of over 8.000 casual labourers employed by McLeod Russel tea company in Uganda are migrants. They come from other regions of Uganda, as well as from neighbouring countries such as the Democratic Republic of the Congo and the United Republic of Tanzania, to work on tea estates in order to support themselves and their families back home. 

Uganda Annual Monitor 2016

DFS

Wed, 09/20/2017 - 12:53 -- anna.ferracuti

Uganda started the journey from a cash-dominated economy to a digital-based economy in 2009. The country is emerging as a strong performer in digital financial services (DFS). Two major mobile network operators (MNOs) dominate the market alongside active third-party providers. In 2016, most active customers used one or more ‘second-generation services,’ such as digital savings or lending products. While rural Ugandans are still half as likely to use a mobile phone, the growth rate parallels that of urban users—about 3% per year.

Benin Annual Monitor 2016

DFS

Wed, 09/20/2017 - 09:31 -- anna.ferracuti

Benin is writing its mobile money turnaround story with increased investment by mobile network operators (MNOs) in their agent networks and in standalone subsidiaries to manage their mobile money businesses. A significant rise in customer usage and agent activity is being observed. To find out more about the changing digital financial services landscape in Benin in 2016 read the full document.

What Know-Your-Customer Regulations Apply in Uganda

DFS

What Know-Your-Customer Regulations Apply in Uganda

By Richard Ndahiro, DFS Expert in Uganda
September 14 , 2017

Study on Know-Your-Customer Requirements for DFS in Uganda

Kampala, UGANDA - 

In the past couple of years Uganda witnessed a steady increase in financial inclusion, mainly driven by an increased uptake in mobile money. Financial inclusion insights Uganda (2016) shows that close to 4 in every 10 Ugandan adults (39%) now have access to financial services. 35% have a mobile money account, 11% have a full-service bank account, while 6% have an account in a non-bank financial institution. 

Financial inclusion, and exclusion on the flipside, is primarily a matter of access. Particularly for digital financial services (DFS), access is dependent on the ability of users such as consumers, traders, merchants, agents and aggregators, to be fully registered and compliant with the Know-Your-Customer (KYC) requirements by regulators. 

Talk to anyone working in DFS in Uganda and they will bring up the topic of KYC. These discussions mainly reveal:

  • A need for more clarity around the KYC requirements for the various DFS types of users 
  • Discrepancies in interpretation of requirements in the KYC regime
  • Challenges around registration and onboarding of, for example, agents, merchants and refugees due to strict KYC requirements. This results in excluding people from using DFS as well as lengthy onboarding processes, with a lot of paperwork for those registering.  

To fully understand all these issues UNCDF–MM4P researched all specific KYC requirements for DFS players in Uganda. The exercise sought to: 

  • Clarify the KYC requirements for opening and operating DFS accounts, including accounts for individuals, informal merchants and traders, formal businesses, and non-citizens such as refugees;
  • Understand how financial service providers are interpreting and implementing KYC requirements;
  • Assess the impact of the interpretation and implementation of KYC requirements on DFS adoption; and
  • Offer recommendations for addressing KYC challenges to foster DFS growth and uptake.

The results of this research are full of findings and insights for regulators, banks, mobile network operators and other financial service providers that operate DFS in Uganda. Please have a look at the summary or the entire study report.

In accordance with these findings, UNCDF-MM4P is engaging with the various stakeholders in a bid to address some of the issues highlighted from the report. 

For more information, please contact
Naomi de Groot
KM Consultant, Uganda
Additional Information
Naomi de Groot
KM Consultant, Uganda

Study on Know-Your-Customer Requirements for DFS in Uganda

DFS

Wed, 09/13/2017 - 16:26 -- anna.ferracuti

The UNCDF MM4P program contracted BFA to conduct a Study on Know-Your-Customer (KYC) Requirements for Digital Financial Services in Uganda. The key objectives of the study were to: Clarify the KYC requirements for opening and operating different digital financial services (DFS) accounts; understand how financial service providers are interpreting and implementing KYC requirements for the aforementioned accounts today; assess the impact of the interpretation and implementation of KYC requirements on DFS adoption; and offer recommendations for addressing KYC challenges to foster DFS growth an

Zambia: 20.000 refugees to profit from DFS solutions

DFS

Zambia: 20.000 refugees to profit from DFS solutions

Kicking off research on potential DFS solutions to increase financial inclusion for migrants
August 28 , 2017

Meheba Refugee Settlement

Meheba Refugee Settlement, ZAMBIA - 

If I had to sum up my first visit to the Meheba Refugee Settlement in Zambia in November 2016 in one word, it would be “confrontation”. From the 45 minute, bumpy bus ride it took to get from the main entrance to the UNHCR offices, to the tour of the different blocks in the settlement, to the impromptu town hall meeting where over 50 residents of the settlement emphatically voiced their opinions about the proposed project. Everything I witnessed made me realize how urgently the refugees want access to financial services. That visit made me rethink everything I thought I knew about migration, freedom of mobility, human rights and access to services that I took for granted.

In the 9 months that have passed since our initial visit, UNCDF and UNHCR have laid the groundwork for a project to develop, and test market-led DFS solutions to transition the Cash-Based Interventions (CBI) within the Meheba refugee settlement to digital (electronic) payments. The objective is to create a thriving and sustainable DFS ecosystem where refugees can have safe and easy access to affordable financial services that could potentially transform their lives such as ability to send and receive money, pay bills such as school fees and access savings and credit facilities.

As we made our way back to Meheba for a second time on August 14th, 2017, it was with a sense of hope and determination. This time, we were coming with good news. Working with UNHCR, the Ministry of Community Development, and the Office of the Commissioner of Refugees in collaboration with DFS consulting firm MicroSave, for the next 8 months, we will spend time doing field research with the residents of Meheba to determine what the proposed DFS solution could look like. We will be talking to and training all the key personnel involved in the CBI program. We will identify and on board one or more DFS providers to implement and test the proposed solution. Hopefully, 8 months from now, we will be able to report back with great news-that the recipients of CBIs and indeed every one of the over 20,000 refugees in the settlement (including current and former refugees and low-income Zambians who have been resettled in the camp) now have access to financial services that previously did not exist.

However, the second journey did not come without surprises. As time has passed, some refugees have left the camp and new arrivals have been received, staff from UNHCR and Ministry of Community Development and Social Services have transitioned to new roles or moved on changing some of our key counterparts in the settlement. This means that we will need to rebuild the knowledge and trust, not just of us but also of DFS.

As we presented the objectives and scope of the project to the field team who are on the ground, day in and day out, working to ensure that the CBI program remains operational and effective, it was encouraging to see their level of excitement and engagement.

Stay tuned and follow us on this journey as we keep you updated on the progress of the project. 

By Uloma Ogba, UNCDF MM4P Knowledge Management Consultant.

For more information, please contact
Uloma Ogba
Knowledge Management Consultant
Additional Information
Uloma Ogba
Knowledge Management Consultant

How DFS can be a gamechanger for the smallholder farmers of Sierra Leone

DFS

How DFS can be a gamechanger for the smallholder farmers of Sierra Leone

By Oswell Kahonde and T. Keyzom Massally
August 28 , 2017

Participants at the DFS for Smallholder Farmers event in Sierra Leone.

Freetown, SIERRA LEONE - 

When it comes to access to financial services, smallholder farmers in Sierra Leone face similar challenges as the 475 million smallholder farmers across the globe. They live far from brick-and-mortar branches and their risk profile often excludes them from formal financial services. Digital financial services (DFS) can play an important role in overcoming this problem. A workshop recently held in Freetown and hosted by the Government of Sierra Leone in partnership with the Better Than Cash Alliance and MM4P brought together key leaders from the public and private sectors, under the title ‘Building an Inclusive Digital Payments Ecosystem to deliver Transformative Financial Services to Smallholder Farmers in Sierra Leone.

“Smallholder farmers represent nearly 70 percent of our workforce” emphasized in his key note speech the Minister of Finance, Momodu Karbo. “It is for this 70 percent that advances in technology — and digital finance in particular — could drive a new era of more equitable gains in agricultural livelihoods”.

The strong commitment of the Government to transform the agricultural sector by harnessing the potential of DFS was emphasized in the opening speech of the Minister of Agriculture Prof. Monty Jones, who announced his Ministry will lead, in partnership with the Bank of Sierra Leone, the development of a focused Digital Financial Inclusion Strategy for Smallholder Farmers and set up a national Agricultural DFS Sub-Working group. The Strategy will contribute to delivery of the broader National Strategy for Financial Inclusion 2017-2020.

The workshop benefitted from the presence of smallholder farmers who spoke of the challenges they face daily. Foday Sillah, a farmer from the northern district of Koinadog, underscored the importance of access to finance for his community: “Smallholder farmers are the main suppliers of food in this country. But due to lack of access to finance, extension services and marketing support, we are unable to sustain our yields. That is why we now have to import rice from other countries”. The Governor of the Bank of Sierra Leone, Dr Patrick Saidu Conteh, spoke of DFS and its “potential to reduce the country’s food annual import bill by half”.

Participants also called for better mobile networks and infrastructure for increasing access to markets and doing away with unfavorable subsidies. They also acknowledged the urgent need to strengthen consumer protection laws to promote greater confidence in DFS. Women, who make up the majority of the smallholder farmers, face even greater challenges and the need to revise land ownership and title laws to ensure greater access to funding was stressed as well. The Agriculture Minister, Prof. Jones, challenged digital financial services providers to design better solutions by understanding the needs, preferences, aspirations and behaviors of smallholder farmers.  

For Sierra Leone, a country recovering from the threat of Ebola and recent devastating floods, and with half of its population of 7 million considered food insecure, digital financial solutions (DFS) can make a difference. Developing an inclusive digital payments ecosystem, which was the agreed outcome of the workshop by the Government and the private sector, will certainly provide the rails to transform the agriculture sector of Sierra Leone. 

For more information, please contact
T. Keyzom Massally
Technical Specialist Digital Finance
Oswell T. Kahonde
Regional Lead - Africa
Additional Information
T. Keyzom Massally
Technical Specialist Digital Finance

The digital finance revolution in Senegal

DFS

Fri, 08/18/2017 - 14:45 -- anna.ferracuti

The banking system continues to dominate the financial services industry in Senegal, with 25 separate banks operating in the market— compared with just 2 e-money institutions. In this member state of the Economic Community of West African States, the banking service usage rate has risen steadily since 2010, reaching around 17 % of the population by the end of 2015.

Building a backbone for the financial sector in Nepal

DFS

Building a backbone for the financial sector in Nepal

August 18 , 2017
Kathmandu, NEPAL - 

Nepal Rastra Bank (NRB), via its Banking and Financial Institutions Regulation Department, has upgraded its reporting system with support from United Nations Capital Development Fund (UNCDF), UNNATI- Access to Finance (A2F) and the Mobile Money for the Poor (MM4P) programme. They have created an e-mapping platform based on a geographic information system (GIS) that shows all existing financial points in Nepal and enables efficient compliance control, data analysis and policy formulation.

Nepal, a landlocked central Himalayan country in South Asia with 19.2 million adults, is home to 184 banking and financial institutions.[1] Yet, only 40 percent of adults are banked, of which 73 percent reside in urban areas and 27 percent in rural areas.[2] A significant reason why 60 percent of Nepalese adults are unbanked is that they reside in areas where financial institutions do not have a formal foothold.

Establishing a branch in such areas would normally require heavy investment and manpower, but that is not the main reason banking and financial institutions shy away from expanding their services in Nepal. In fact, it is often that they merely lack access to information about the demand for financial services in remote regions.

With a vision of financial inclusion for all, NRB has deployed various policy instruments over the years to ensure that financial outreach makes in-roads to remote, rural areas. With the e-mapping system taking shape, a view of financial service points across the country will allow the NRB Banking and Financial Institutions Regulation Department to prioritize approval of new bank branches or channel points in regions that were previously excluded. 

On 21 July 2017, MM4P hosted a feedback session to give department directors a first look at the e-mapping system, which was unveiled by the Governor of NRB. The system developed by Usabledata Ltd. and Smart Solutions was demonstrated in the session. This platform will be publicly available but will have different access levels for NRB, financial institutions and the public.

The main objectives of the session were the following:

  • Acquainting participants with the real-time analytics and management information system and providing a system overview.
  • Showcasing the GIS-based map of Nepalese financial infrastructure.
  • Providing a step-by-step guide to drill down on the view of financial access to the local-body level and to track development of financial inclusion in different areas.
  • Tracking deposits/loans, including amounts at different levels.
  • Helping to lay the foundation for further advancement and scale-up of the e-mapping platform through recommendations.

As the session concluded and participants looked forward to the official launch of the e-mapping system, the Governor of NRB summarized its potential:

“The e-mapping system is going to change the way financial institutions function in Nepal and in the best possible way. People living in the remote corners of Nepal are a step closer towards financial inclusion. I thank UNCDF-MM4P for their guidance and support for making this a possibility, and we are enthusiastic to further build on this system and make it the backbone of Nepal’s financial sector.”

[1] NRB, ‘List of Banks and Financial Institutions,’ mid-January 2017. Available from https://www.nrb.org.np/bfr/pdffiles/List_of_BFIs_Jan_2017_English.pdf

[2] FinMark Trust and UNCDF-Making Access Possible, ‘FinScope Survey Highlights: Nepal 2014’ (n.p., n.d.). Available from http://www.unnatiprogram.org/uploads/publications/0PBlHqL1h2kifLCSLCS0Dv24xM50jBk9.pdf

 

Photo 1: Governor of NRB addressing the audience

Photo credits to Shubhashish Shahi, 2017

 

August 2017. Copyright © UN Capital Development Fund. All rights reserved.

The views expressed in this publication are those of the author(s) and do not necessarily represent the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States.

For more information, please contact
Aliska Bajracharya
KM Consultant, Nepala
Jaspreet Singh
Regional Technical Specialist, Digital Finance
Additional Information
Aliska Bajracharya
KM Consultant, Nepala

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