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financial services

Want to empower women? Digital Financial Services are the way to go!

Duncan Green's picture

Sophie Romana (left) and Shelley Spencer (right) report back from the June 8 high level roundtable organized by NetHope and USAID, which brought together mobile banking and gender champions to reflect on how Digital Financial Services (DFS) can galvanize women’s empowerment.

Women’s empowerment is often measured by their access to resources and ability to make decisions over how they are used.  Recent evidence shows that DFS delivered through mobile phones deserves solid A's against each metric. This is not just hopeful musing by us as two empowered women with banking apps on our mobile phones, it is the consensus of a cross section of thought leaders with a seat at the table in Washington including USAID, the Bill & Melinda Gates Foundation, the Better than Cash Alliance and UNCDF, CGAP, and Women for Women International, as well as our own organizations, Oxfam and NetHope.  We recently spent a morning reflecting on rigorous academic and implementation research on DFS use by women — all to be published soon — and pathways to close the gender gap in DFS product use.

Oxfam has long known that women play a central role in financing family and community needs. What we are now finding is that DFS tools can enhance their role.  To study the impact of DFS on Saving for Change (SfC) savings groups in Senegal, Oxfam divided up 210 SfC groups (over 5,000 women) into 2 cohorts: one who participated in the project and the other as a comparison set.  Women who participated in the pilot saved and borrowed more than the comparison groups. The differences are not marginal.  There is a significant difference in savings.

 
Graphs: Saving for Change Mobile Banking, First Assessment & Learning Review, March 2016, Oxfam America

Blockchain technology: Redefining trust for a global, digital economy

Mariana Dahan's picture



a longer version of this blog post is available on the
MIT Media Lab’s Digital Currency Initiative platform

With Google Trends data showing that searches for the word “blockchain” have exponentially increased, we may be entering the peak of the hype cycle for blockchain and distributed ledger technology.

But here’s the thing: the blockchain is a major breakthrough. That’s because its decentralized approach to verifying changes in important information addresses the centuries-old problem of trust, a social resource that is all too often in short supply, especially amid the current era’s rampant concerns over the security of valuable data. It turns out that fixing that can be a boon for financial inclusion and other basic services delivery, helping to achieve the global objectives laid out in the Sustainable Development Goals (SDGs).

Sorting out hype from reality may depend on how well we identify where institutions that have until now played a role in mediating trust between people are falling short, especially in the key area of money. Deploying the blockchain in those settings to generate secure, decentralized trust could achieve great strides in inclusion and innovation.

What do we mean by decentralized trust? The concept is unfamiliar in part because its converse -- centralized trust – is something that we often take for granted, at least while it’s working. But if we look at the history of transactions since the early barter systems to modern-day digital money exchanges, we can see how different trust protocols for keeping track of our exchanges of value have evolved and how, in each case, centralizing trust within particular institutions has periodically caused problems.

As strategies for dealing with this challenge evolved and as the complexity and frequency of transactions grew, different trust bearers emerged. We went from relying on the memory and discretion of tribal leaders, to central governments issuing currencies in the form of precious metals, to commercial banks acting as trusted intermediaries and issuing their own bank notes, to central banks managing a hybrid system in which sovereign fiat banknotes circulate alongside a debt/credit form of money managed by regulated banks and internal ledgers.

Unlocking innovation in the Middle East through financial inclusion

Simon Bell's picture


I recently attended an SME Conference in Jordan around SME Finance and Employment – extremely important issues in a troubled region.  All participants agree that much more needs to be done to address the lack of jobs in the region and to increase financial access at all levels, to individuals, households and small and medium scale enterprises (SMEs).

The Middle East remains the most financially excluded region in the world despite being a middle income region.

Only 4% of unbanked adults in the Middle East say that they don’t have an account because they don't need one. In other words, it is clear there is widespread unmet demand for financial services.

A person living in the Middle East is less likely to have a bank account than is a low-income person living in Africa or South Asia, and significantly less likely than a person living in Latin America, Eastern Europe or East Asia from comparable middle income country or region. This poses a dilemma – why?

Extending financial services to women in Bihar yields social and economic benefits

Jennifer Isern's picture


How many bank accounts do you have? One, two or more? For people in developed countries, a bank account is a fact of everyday life. A constant presence. Something that is pivotal to your home, your work and your family. But imagine if you didn’t have one. How would you be paid? How could you pay for your rent or mortgage, your food, utility bills, and so on?

How digital financial services boost women’s economic opportunities

Leora Klapper's picture

Imagine having to skip work every month to travel to the city center just to pay your electricity bill or your child’s school fee? Would you not worry if your income relied on remittances and you were unable to pay rent because they were tied up in a network of agents? And wouldn't it frustrate you if you didn’t have a say in how your salary was spent or invested?

Having a bank account could help in all of these situations. Most of us probably have auto-pay set up so we don't need to worry about our monthly bill payments or money transfers. But the conveniences we take for granted are out of reach for the world's 1.1 billion women who lack an account. According to World Bank’s Global Findex database, men in developing countries are 9 percentage points more likely than women to own an account. The gap is largest in South Asia, where only 37 percent of women have an account compared with 55 percent of men.

Pathway to profitable women-owned enterprises

Francesco Strobbe's picture

Pathway to profitable women-owned enterprises @ Evgeni Zotov / FlickR

Women entrepreneurs in Ethiopia are disadvantaged from the start. They have less access to the finance, networks, and education which help their male counterparts advance. They face regular discrimination and harassment from society--sometimes even from their own families and communities. The challenges a woman entrepreneur in Ethiopia faces in growing her business are overwhelming.

Jarring Numbers on Financial Inclusion Point to Opportunities for Digitizing Payments

Leora Klapper's picture

In updating the Findex database on financial inclusion over the 2014 calendar year, I had the pleasure of traveling with Gallup, Inc., to pilot our expanded questionnaire. We visited people’s homes and asked them to describe to us how they save, borrow, make payments, and manage their risk.
 
A man who lives in a small home in a Kolkata slum with his wife, children, and parents works as a driver, and is paid directly to a bank account that was opened for him by his employer. With great pride, he told us that every month he leaves a balance in his account, which he believes is a safe place to save for his children’s education.

Can Socially Responsible Investing bridge the Gap between Islamic and Conventional Financial Markets?

Michael Bennett's picture

Islamic finance is growing in countries like Malaysia (Credit: Asian Development Bank, Flickr Creative Commons)

Over the last three decades, the concepts of Islamic finance have captured the attention of researchers. One of the core principles of Islamic finance is the prohibition of interest and debt-based financing. Instead, economic agents are encouraged to engage in financial instruments of risk-sharing rather than risk transfer.  Although the principles of Islamic finance go back several centuries, its practice in modern financial markets became recognized only in the 1980s, and began to represent a meaningful share of global financial activity only around the beginning of this century. The growth of this market has been driven by the high demand for Islamic financial products, as well as the increasing liquidity in Gulf region due to high oil revenues.  Table 1 shows the growth trend in Islamic finance for the banking sectors by different regions, with estimates of total Islamic banking assets reaching $1.8 trillion by the end of 2013. Figure 1 shows how the growth of the Islamic financial sector in 2006–10 period surpassed the growth of conventional financial sector in all segments of the market, ranging from commercial banking, investment banking, and fund management to insurance in several Muslim-majority countries.

Risk-taking men, time-constrained women: What gender gaps mean for financial inclusion

Do men and women use financial services differently? This is the question we set out to answer when we conducted six country studies on gender finance in sub- Saharan Africa.

The purpose of our study was twofold. First, we wanted to explore the reasons behind differences in usage of financial products. Second, based on these underlying reasons, we wanted to formulate workable intervention strategies that we could recommend as gender-sensitive financial sector policy approaches for policymakers and stakeholders. The countries we studied included Botswana, Malawi, Namibia, Rwanda, Uganda, and Zambia. Based on 50 to 75 interviews per country with individuals from both urban and rural areas, we analysed how and why men and women are using credit, savings and insurance products.

A Global Wave of Financial Inclusion Targets?

Douglas Pearce's picture

Credit: IITA

On October 23, Nigeria joined a fast-growing list of countries making headline commitments to financial inclusion targets and actions,by launching a new Financial Inclusion Strategy. 

A total of 35 countries have now made commitments through the ‘Maya Declaration’ of the Alliance for Financial Inclusion (a global network of financial regulators), including 19 as recently as September 2012. 17 countries committed in June 2012 to targets, actions, and coordination platforms through the new G20 Financial Inclusion Peer Learning Program.  These new commitments and targets could have a significant impact in advancing financial inclusion, if the challenges in meeting them can be overcome.


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