Financial Inclusion

Financial Inclusion

Digital Financial Services Price Transparency and Awareness in Malawi

Financial Inclusion

Fri, 12/15/2017 - 09:38 -- anna.ferracuti

This whitepaper outlines major findings of a diagnostic exercise conducted by the MM4P team in August 2017. This exercise involved desk research and an in-country mission to gather data, conduct interviews with agents, tellers and customers, and survey the insights of local stakeholders.

Mototaxis, ambassadors of mobile payments in Benin

Financial Inclusion

Mototaxis, ambassadors of mobile payments in Benin

UNCDF-MM4P and MTN Benin testing a new type of payment for mototaxis
December 15 , 2017

Zemidjans

Cotonou, BENIN - 

Caption : Zem are the most commonly used means of transport

Cotonou, BENIN- Over 250,000 moto taxi drivers “Zemidjans” or “Zem” are circulating in Benin. Collectively, they represent a sizeable contribution in Benin’s economy: one million people depend on the income generated by the Zems activities and two million Beninese are regular patrons of their services. However, as most of the Zems do not have bank accounts, their transactions are conducted largely informally, in cash. This represents an opportunity for the digital financial services sector to offer this group of users’ financial services that could benefit their lives.

The MM4P program in Benin is currently assisting the mobile network operator, MTN Benin on a merchant payment initiative aimed at enabling customers to pay their mototaxi fares using mobile money.

Co - create solutions with mototaxis

Launched in July 2017, the first phase of the project focused on the design on the mobile payment solution.  With the support of design firm, Innate Motion and consultancy firm, PHB Development, MM4P and MTN adopted a “Human Centric Design” (HCD) approach to understand the typical Zems journey including their wants, needs and aspirations when it came to financial services. This approach helped uncover insights a classical market study might have overlooked.

Subsequently, we explored mobile payments from different angles: from the point of view of the mototaxis drivers, their suppliers, MTN teams and their affiliated communication agencies.  In small groups, we developed different scenarios keeping mototaxis drivers at the center of the discussion.  The idea was to enables customers to pay their fares with mobile money, and simultaneously enable the Zemidjans to use part of the money collected to make payments using the same mobile money platform.  In contrast to standard design processes, the scenarios focused on the life of Zemidjans and not on the financial product itself.

 We asked the Zemidjan whether the scenarios presented matched their real-life experiences? What improvements could be made? What changes were needed? Their answers helped us rewrite scenarios so that they became Zem’s stories, stories they want to live or experience and in which mobile payment may play a role. Utilizing this co-creation approach, we were able prioritize the mix of value propositions not only for the Zem, but also for their customers to use mobile money payments.  With the HCD approach, we not only tested innovative solutions but we validated them with the primary stakeholder, the Zem. The active participation of various MTN teams (Communication, Marketing, Technical, etc.) throughout the process facilitated the choice of payment solutions that were acceptable to all.

The Zem, to promote the adoption of mobile payment

 By deciding with MTN to explore the world of Zemidjans via an approach centered on users, MM4P put the customer at the heart of the digital financial services ecosystem.  Experience has shown that the adoption of these services depends, to a large extent, on whether they resonate with the customers and truly meet their needs. As such, the needs and constraints of customer should always be factored into the products and services design process.

 We chose the Zem because they are powerful vectors of information or even of behavioral transformation.  They can position themselves as ambassadors to impact the use of digital financial services in Benin and to influence the populations.

 The adventure with the Zemidjans continues.  But we are already seeing signs that the HCD approach an excellent tool to convey and leverage the benefits that digital finance can have. It is our belief that HCD can help leverage on all innovative products for which increased adoption and usage are proving to be difficult.

 We are in the process of selecting a representative sample of these moto taxi drivers for the implementation of a pilot in the next phase.  In a future blog, we will share some of the initial results obtained, as well as the challenges and/or new ideas discovered.

By Bery Dieye Kandji, KM Consultant, and Jamelino Akogbeto, DFS Expert 

For more information, please contact
Bery Kandji
KM Consultant, Benin
Additional Information
Bery Kandji
KM Consultant, Benin

The Roaming Agents of Lao PDR

Financial Inclusion

The Roaming Agents of Lao PDR

By David Kleiman, DFS Expert
December 14 , 2017

Above: BCOME pilot in the center meeting at Thakad Village, Beng District

In the body text: Financial Literacy and awareness of XMI and BCOME service to Grade 12 students of Beng District High School

Vientiane, LAO PDR - 

On October 16th 2017, Yong Duangphachanh did not make the 2-hour journey to a banking agent point in the district town to deposit money for her children’s educational fees. Instead, she attended a Xainiyom Micro Finance (XMI) center meeting in her village in northern Lao PDR and was the first in her area to experience the latest evolution in branchless banking.

XMI has partnered with BCEL’s Community Money Express (BCOME) and since February 2017, has been providing BCOME transactions to its customers via their 7 branch offices; including Beng where Yong Duangphachanh has her XMI account.   But what delighted her was that now she did not have to travel to the agent -  now the agent could travel to her.

This pilot initiative is supported by the UNCDF Making Access to Finance More Inclusive for Poor People (MAFIPP) programme jointly operated with the Bank of Lao PDR, with support from the Australian Government and technical assistance from UNCDF MM4P. The programme aims to integrate microfinance institutions (MFIs) in to the digital finance ecosystem in appropriate ways.   As a follow up to MAFIPPs  “Training on Digital Finance and Interventions Models for MFIs”  in and building upon the UNCDF MFI strategy toolkits  to  enter the digital financial service (DFS) arena,  XMI  was  ready to take the next  step.   

To provide convenience and continuous service to its remote customers XMI conducts weekly center meetings in all villages accessible by motorbike.  Meetings only occur in the mornings, and take about one hour typically for clients to make loan repayments, to deposit or withdraw on their savings accounts.  Now, as part of the center meetings, the XMI field staff travels to the community with a laptop, printer and, most importantly, a 3G Pocket Wi-fi router to allow the loan officers to connect to the BCOME platform. There are already plans to replace the equipment with a more portable tablet and a pocket-sized Bluetooth printer.  Although now customers can avail opportunities like BCOME transactions including depositing and remitting funds.  Currently, XMI conducts center meetings in 3 provinces (Oudomxay, Luang Namtha, Bokeo) and 14 districts covering 415 villages. 

And with all that traveling, XMI staff are well known in the communities that they serve, and they look for innovative ways to bring valuable services and raise awareness about them.  As part of their mission, they conduct promotional activities at schools.  Such as the outreach to high school seniors conducted by XMI at Meuang Beng High School where students were introduced to the benefits of savings and educational loans. Although XMI accounts cannot be opened by minors, it is presumed that parents will be able to avail of these services on their behalf. Additionally, XMI explained how BCOME transfers can help students who study away from home and need to receive financial support from their relatives.

 

 

 

 

XMI continues to make further inroads for financial inclusion and values its relationship with BCOME as it is a positive way to associate with BCEL (the largest bank in Lao PDR with 41% market share in retail savings and 4% in lending). The association makes people more confident in conducting banking and financial services with XMI.

This pilot activity of offering remote transactions has been well received by customers but it is not without its challenges. BCEL is cautious about allowing agents to conduct transactions away from the designated and approved premises.  BCEL understands the importance of trust in agent banking transactions. And they ensure it by having an authorized sign board and customer pricing clearly displayed. XMI and their well-trained staff could offer significant assurance to BCEL. XMI has been authorized by BCEL to conduct only on-line BCOME transactions, so that the BCOME remittance occurs in real time.  The customer either gives cash or the amount is debited from her/his savings passbook – the transaction will be recorded in the XMI monitoring information system only when the credit officer returns to the Service Unit. The XMI savings passbook (containing the client’s picture) can be used for formal client identification in lieu of the common ID card of family book – a procedure mandated by BCEL to fulfill the anti-money laundering obligations applicable to commercial banks.

XMI is hampered by the lack of suitable mobile data connectivity at many communities, which would require offering off-line transactions.  For example, when a customer wants to deposit or remit funds, that transaction would be executed once the officer returns to the branch office where there is a stable internet connection.   BCEL is considering authorizing off-line transactions based on the success of this initial pilot with a roaming BCOME agent.

“A service such as this makes banking more accessible and can also increase business for us,” said Khanthaly Saenvilayvong, Managing Director of XMI. He accompanied the team on this first experiment and is pleased and proud that XMI is the first to bring a real time DFS solution to a remote community in northern Lao PDR. “These DFS services will continue to develop and provide opportunities to offer more and more services -  once people become aware of the service they will try it and then become regular users due to the security and convenience.” 

XMI key figures (as of Q3 2017 unless stated otherwise, source: mixmarket.org)

Nb clients 34,280 (60% women)
Nb borrowers 9,223 (72% women). Largest Lao MFI by number of borrowers
Loan Outstanding 45.1 billion Kip ~$5.4mn. Agriculture loans 65-70% of portfolio
Portfolio at Risk 30days (PAR30) 2.29%
Total assets 57.0 billion Kip ~$6.9mn
Return on Assets (RoA) 11.9% (2016 annual)
Nb Service Units

7 all acting as BCOME Service Points

Nb & value BCOME transactions 117 with total value 259,457,000LAK ~USD 31,600
(October 2017, at roaming agent and XMI Service Units combined)
For more information, please contact
Aliska Bajracharya
KM Consultant, Lao PDR
Additional Information
Aliska Bajracharya
KM Consultant, Lao PDR

Six development challenges for Fintech in Senegal

Financial Inclusion

Six development challenges for Fintech in Senegal

By Bery Dieye Kandji, KM Consultant in Senegal
December 13 , 2017
Dakar, SENEGAL - 

« Fintech », contraction of «technology» and «finance», refers to a structure that offers innovative financial products and services without itself being a financial institution (bank, microfinance institution...). In Senegal, Fintechs are entering into the market, offering various products and services that could contribute to the growth of digital finance in the market. However, they are having to experiment in an environment that is not necessarily set up to favor them.  

If you're a Fintech start- up be prepared for the following challenges:

  • As a Fintech, you must develop innovative offerings, in accordance with the existing legal, financial and tax regulations in Senegal. But who are the authorities with whom you need to validate this compliance?  Identifying them will be your first big challenge. There is more than a dozen in the country: Bank of West African States (BCEAO), Directorate of Money and Credit (DMC), Regulatory Authority for Telecommunications and Posts (ARTP), Directorate of Micro Finance (DMF), just to name a few.
  • You will also have to deal with regulations that are not always aligned with your commercial realities. For example, if crowdfunding is your core business, you may suffer from banks’ monopoly on providing credit and the regulatory context around public offering.
  • The regulatory framework on electronic signature, set up by the Agency of Information of the State (ADIE), can be complex for Fintechs to understand. To dematerialize contracts, you will need a lot of time and patience. This may be tough for a structure whose originality is its ability to develop instant and digital offers.
  • A Fintech needs to build partnerships to expand its offerings. In Senegal one of the difficulties in this area is the weak bargaining power with big billers and incumbent financial institutions and operators. This may impose constraints for Fintechs whose business models are mainly based on the aggregation of services. This leaves little room for them to maneuver which could in turn affect the viability of their business model.
  • Despite robust growth potential, finding financing remains a challenge for Fintechs. The banks are still reluctant to finance emerging business models. And even if there are guarantee funds, their processes are often too long and unsuited to the development cycles of Fintechs.  
  • Another problem, you must be aware of, is the lack of an ecosystem fostering the development of Fintechs. There is almost no framework in Senegal to share your projects with research centers, large companies, public actors, and investors, and develop partnerships.

This last point probably includes all the obstacles to the development of the Senegalese Fintechs. So where does this leave Fintechs? Is there a future for these new market players?

Yes, because innovation, the main added value of the Fintechs is one of the core drivers of digital finance. When it comes to digital financial services, people are hungry for innovative services tailored to their needs and aspirations

Fintechs in Senegal need assistance to overcome their challenges, whether these are related to regulation, funding or establishment of partnerships.

The MM4P program whose mandate is to act as a neutral broker in market and bring together all the relevant stakeholders in digital financial services, is actively working on assisting Fintechs in the regard. A first meeting was organized on the 7th of September2017, in the offices of MM4P, to broker an exchange with Fintechs on their current projects, challenges and perspectives. The next step will be to formalize a framework to assist them in the market. 

Pour lire en français, cliquez ici.

For more information, please contact
Bery Dieye Kandji
KM Consultant, Senegal
Additional Information
Bery Dieye Kandji
KM Consultant, Senegal

2015–2017: The story of digital finance in motion in Benin

Financial Inclusion

Fri, 12/08/2017 - 11:27 -- anna.ferracuti

Digital finance is gradually taking root in Benin. While 2015 saw major challenges in the adoption of digital financial services (DFS), two years later the situation could not be more dierent. For DFS providers, specifically mobile network operators, 2017 has been an extraordinary year: activity rates are higher than ever before, the proportion of active customers rose from 56 to 61 percent, and the number of transactions per customer increased from 6.9 to 8.3.

Briefing Note also available in French below.

Goodbye Notebook, Hello Tablet

Financial Inclusion

Goodbye Notebook, Hello Tablet

How Dairy cooperatives in Western-Uganda are digitizing their records
December 06 , 2017
Kampala, UGANDA - 

Digitizing basic transactions such as records of milk delivery and sales, is essential for the further growth of the dairy sector in Uganda. A small change can bring big changes. If instead of writing down the 15 litres brought to the collection centre by farmer Godfrey this data is entered into an application, farmer organisations unlock the power of data. And with this information farmer groups can potentially access financial services which are now not willing to provide financing, because of the lack of collateral.

Nearly 80% of the people in Uganda live in rural areas where banks have no or limited presence. Consequently, the countryside is lacking financial services needed to develop the local economy. Over 70% of Ugandans are active in agriculture. The sector is largely organized through farmer organisations such as cooperatives, who typically have their own Savings and Credit Cooperative Organisations, SACCOs, that provide financial services to their members.

However, cooperatives and SACCOs struggle with many issues such as limited access to finance, high loan default rates, safety concerns around large quantities of cash and cumbersome admin processes. It is challenges such as these that prevent cooperatives and SACCOs from growing and professionalizing their business; becoming an agri-business that can impact the lives of small-holder farmers, their members. Especially in rural areas.

That is why the UNCDF supports the development of an app that will provide dairy cooperatives with the right tool to digitize their transaction records. Across the dairy sector UNCDF is supporting digital payments on mobile phones instead of in cash. One of the key lessons learned from digitizing these payments, is that the foundation first needs to be laid. Paper-based cooperatives need to go digital.

Together with Laboremus Ltd., UNCDF is designing and creating an app that will do just what is needed for dairy cooperatives. Pius Peter, General Manager from Dwaniro Dairy Cooperative says that he is looking forward the new application being used. “I feel with the step to digital we are entering a modern Uganda, where we can ensure our members, small holder farmers, access to the finance they need to grow. Entering our delivery and sales in this application will advance and strengthen our cooperative and the way we serve our farmers.”

In order to build on experiences from organisations that already digitized their records, UNCDF is organizing the third FinTech4AG meet-up on the 7th December 2017. In this event, cooperatives SACCOs as well as NGOs and other organisations, will share their main learnings. What are the main challenges for farmer groups who would like to go digital? And how can these challenges best be overcome?

Jointly answering these questions will provide feedback and a clear way forward for the further development of the application. Insights that will accelerate the digitization of farmer cooperatives all across the country, in different value chains to drop their notebooks and pick up their tablet.

FinTech4AG: Digitizing Farmer Organisations
7th December 2017
The Design Hub
10:00 - 12:30

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

Introducing digital pension payments in Senegal

Financial Inclusion

Tue, 12/05/2017 - 12:19 -- anna.ferracuti

The aim of this research highlight is to examine potential ways to introduce digital pension payments to the 30,000 retired public officials who currently receive their National Pension Fund payouts in cash.

In line with the programme’s ecosystem approach that encompasses all parties involved in a payment process, MM4P conducted a detailed, multi-level analysis of the pension payment system in Senegal.

Research Highlight also available in French below.

Disrupting the savings and lending market in Uganda: The story of MoKash

Financial Inclusion

Tue, 12/05/2017 - 10:50 -- anna.ferracuti

The MM4P programme in Uganda, in collaboration with PHB, supported MTN in its journey to launch and refine the MoKash product. Starting with initial research to define the route-to-market strategy for rural areas, MM4P and PHB helped MTN overcome barriers and design an effective customer engagement strategy. Drawing on that experience, this focus note highlights some of the key success factors for MoKash in the first year after launch.

M-Dorado: un pas pour les jeunes!

Financial Inclusion

M-Dorado: un pas pour les jeunes!

November 29 , 2017

UNCDF et Orange se sont unis pour permettre à des jeunes comme Aby, Fatou et Aboubacar, de réaliser leurs rêves, en leur facilitant l’accès au financement pour gérer leur propre business.

Dakar, SENEGAL - 

Depuis le mois de Septembre, Aby Ndour vingt-six ans, originaire de Saly joseph un quartier de Mbour, se lève chaque matin avec une nouvelle énergie. « J’ai été sélectionnée parmi beaucoup d’autres jeunes de mon village pour participer à un projet et c’est une chance inespérée.  Mon mari est décédé il y a quelque temps me laissant avec deux enfants de quatre ans et seize mois. Depuis je me débrouille comme je peux en faisant des petits boulots comme du ménage, ou de la vente à mi-temps. Mais rien de fixe.  J’ai le contact facile et je suis douée pour le business. Je sais que ça marchera pour moi. Je n’ai aucun doute là-dessus, et j’ai hâte de commencer. »

 Aby fait partie des quinze jeunes recrutés pour la première phase du projet Agent Jeunes ; tout comme Ndeye Fatou Ndiaye, trente ans maman de cinq enfants et Aboubacar Gueye, vingt-neuf ans et célibataire. Leurs points communs : ils sont jeunes, sans emploi, cherchent désespérément à prendre leur avenir en main, et ne rechignent pas à faire des petits boulots.

UNCDF, à travers ses programmes MM4P et YouthStart, s’est associé à l’opérateur de téléphonie mobile Orange qui fournit des Services Financiers Numériques (SFN) sous son entité Orange Finance Mobile Sénégal OFMS, pour lancer le projet Agent Jeunes au Sénégal. Ce partenariat vise non seulement à augmenter l’inclusion financière à travers l’extension des SFN au Sénégal, mais aussi à promouvoir l’employabilité des jeunes par l’entreprenariat. 

Un nouveau modèle de partenariat pour les jeunes entrepreneurs

Le projet Agent Jeunes est conçu selon un modèle de micro franchising. Sous le nom ‘business in a box’, cette approche relie des entreprises voulant élargir leur clientèle et développer leur part de marché, à des jeunes entrepreneurs à fort potentiel, en manque de capitaux pour développer leurs propres activités commerciales. Ainsi, chaque jeune recruté dispose d’un kiosque équipé pour lui permettre d’offrir des services financiers numériques comme la vente de crédit téléphonique, le transfert/retrait d’argent, mais également la vente de produits de téléphonie mobile. Le kiosque est financé grâce à un prêt octroyé au jeune par une institution financière de la place. Un franchiseur sert de garant pour ce prêt estimé à plus de six cent mille francs CFA.

Cet accès au financement est l’étape clé du processus vers l’autonomisation des jeunes, car elle concrétise leur projet d’être entrepreneur en devenant propriétaire du kiosque. En signe d’engagement, chaque jeune donne un apport initial de 40 000F CFA, dont 15 000F qui serviront à l’ouverture du compte dans l’institution financière « prêteur ».  

Le projet d’une durée de deux ans est une véritable bouffée d’air frais pour les jeunes des zones périurbaines et rurales du Sénégal. Abdoulaye Gueye confie : « Je suis l’aîné de ma famille et mon père est à la retraite. Je dois maintenant prendre la relève. A Mbour il n’est pas facile de trouver du travail. Je suis pris dans ce projet comme superviseur pour un salaire de 80 000F CFA.  Avec ce revenu fixe, je pourrais aider un peu ma famille. Mais je compte me donner à fond et saisir toutes les opportunités qui se présenteront durant ce projet. » 

Des partenaires engagés pour l’employabilité des jeunes

UNCDF et ses partenaires ont décidé de tabler sur l’histoire d’amour entre les jeunes et les nouvelles technologies pour favoriser l’emploi des jeunes, et contribuer à leur inclusion financière. Le projet réunit plusieurs acteurs dans un véritable écosystème :

  • Le programme MM4P, financé par La Fondation Mastercard, est une initiative de l’UNCDF lancée en 2012 pour aider les ménages à bas revenus à améliorer leur sécurité financière via l’offre de services financiers numériques ;
  • YouthStart, est un programme de UNCDF lancé en 2010 pour accroître l'accès au financement des jeunes, en appuyant les fournisseurs de services dans la conception et le développement de produits et services financiers et non financiers dédiés aux jeunes. ;
  • Orange à travers sa filiale émettrice de monnaie électronique (OMFS) qui, au-delà du besoin d’élargir sa base de clientèle, entend surtout participer à l’inclusion financière des jeunes en partageant son expertise en matière d’entreprenariat ;
  • Un Micro franchiseur responsable du recrutement, de la formation et du suivi des « Agents Jeunes » ;
  • Une institution de microfinance partenaire du micro franchiseur pour permettre aux jeunes d’ouvrir des comptes et bénéficier de financement ;
  • Une firme de consultants spécialisée dans le développement de réseau de distribution de SFN pour apporter une assistance technique au micro franchiseur en matière de bonne pratique de gestion des agents ;
  • Une firme spécialisée en développement de plateforme numérique pour créer une application « Business Intelligence » avec laquelle les jeunes entrepreneurs vont gérer leur business et mieux connaitre leurs clients. 

Image: L’écosystème des partenaires impliqués dans le projet

Des perspectives pour les services financiers digitaux

Pour tester le modèle, le projet va déployer quinze kiosques témoins, pour en tirer des apprentissages et améliorer le modèle de partenariat.  L’objectif à terme est de mettre en place cent cinquante kiosques pour jeunes dans les zones périurbaines et rurales du Sénégal d’ici avril 2018.

Au-delà des emplois pour les jeunes, le projet soutient le développement de la distribution de la finance digitale, notamment en zones périurbaines et rurales. Les quinze premiers kiosques permettront d’affiner les éléments clés du projet, tels :

  • La stratégie de recrutement et de formation des jeunes
  • Le mécanisme de financement des jeunes
  • Les modes de gestion du réseau et de la liquidité
  • La performance des jeunes dans le micro franchising de SFN
  • L’impact des « Agents Jeunes » sur l’adoption des SFN

Les « agents jeunes » peuvent être un puissant vecteur d’adoption de services financiers innovant auprès de leurs communautés en tant qu’ambassadeurs des technologies mobiles. Et le dispositif mis en place pourrait être un bon levier d’accompagnement des actions de paiement de masse mobile (salaires, pensions, allocations, bourses, etc.) de l’Etat et les Organisme Non Gouvernementaux dans les zones ciblées. Autant de perspectives qui font de ce projet une belle avancée sur la route de M-Dorado, le paradis des services financiers digitaux.

Par Sabine Mensah, Spécialiste Technique Régional & Bery Kandji, Consultante Knowledge Management et Communication – MM4P Sénégal

For more information, please contact
Bery Dieye Kandji
Consultante Knowledge Management et Communication – MM4P Sénégal
Additional Information
Bery Dieye Kandji
Consultante Knowledge Management et Communication – MM4P Sénégal

State of the Digital Financial Services Market in Zambia, 2016

Financial Inclusion

Fri, 11/17/2017 - 17:11 -- anna.ferracuti

Results from the UNCDF-MM4P Annual Provider Survey​.

The 2016 State of the Digital Financial Services Market in Zambia provides key insights into the state of the Zambian DFS market, drawing on data collected through the 2016 UNCDF-MM4P Annual Provider Survey (APS), and complemented by data from other sources such as GSMA and the Agent Network Accelerator Survey conducted by The Helix Institute of Digital Finance.

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