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April 2017

How one reform can lead to more: The spillover impact of legal reform in Bangladesh

S. Akhtar Mahmood's picture

Business reforms have an impact not only on businesses, and thereby on the economy and society, but also within government. When one part of government carries out a reform, it is noticed by others in government – and sometimes dynamics are created that lead to even more reforms.

Such a spillover impact can happen within the same government office that pursued the initial reform, or it can occur in other agencies, including those working in unrelated areas. Often the multiplier effect is unanticipated and the wider impact may not happen automatically. Project teams that support the initial reform may need to do something extra to nudge the dynamics in the right direction.

Back in 2008, the International Finance Corporation (IFC) was approached by the Bangladesh chapter of the International Chamber of Commerce (ICC-B) for support in bringing its ambitious idea of arbitration into practice. Three years of rigorous preparatory work – including due diligence of market demand, learning about global experience, and socializing the idea among stakeholders in Bangladesh – led to the establishment of the Bangladesh International Arbitration Center (BIAC) in 2011.

This initiative – through an IFC-supported consortium of three premier business chambers: ICC-B, the Dhaka Chamber of Commerce and Industries (DCCI) and the Metropolitan Chamber of Commerce – was an important milestone in itself. But there was more to come.


 

From establishing a facility to changing the law

During project design, the implementing team thought that establishing and operationalizing BIAC would be sufficient for introducing ADR in Bangladesh. Implementation, however, had more sobering lessons. It quickly became apparent that, for BIAC to succeed, changes would also be required in the legal and regulatory environment governing dispute resolution. As the organization’s credibility was critical to its operational success, the team initiated discussions with the Ministry of Law (MoL) to win its support for the enactment of regulatory and legislative changes, as well as the endorsement of BIAC rules.

Progress toward Universal Financial Access

Stephen Kehoe's picture


Photo Credit: Women’s World Banking 

Two years ago, Visa announced a commitment, alongside other organizations, to provide financial access to 500 million unbanked adults as part of the World Bank Group’s goal of achieving Universal Financial Access (UFA) by 2020.  It’s widely reported that 2 billion people worldwide (38% of all adults) don’t have access to formal financial services—no bank or savings account, no formal way to store or send money, no basic financial tools to manage life or business or help to generate income.

There was no doubt in our minds that Visa had a role to play, given the reach of our payments network and the fact that facilitating the issuance of digital payment accounts is our core business.  What was not as clear was how much our efforts would need to factor in changes to strategy in order to ensure the kind of accounts people are receiving hit their mark in terms of usage and provided a genuine pathway to full financial inclusion. 

Can 'fintech' innovations impact financial inclusion in developing countries?

Margaret Miller's picture
A digital transaction in the Democratic Republic of Congo. Such transactions are made possible in part by FINCA. FINCA's strategy in Africa is to focus operations on underserved markets and groups, namely rural areas and women. Photo: Anna Koblanck/IFC


Financial technology, “fintech,” has been reshaping the financial services industry with the level and speed of innovation that’s simply fascinating.

A month ago, my colleagues and I attended the 5th Annual Lendit USA conference to check out about the latest innovations and thinking in this field and see how we can apply it to our work.

There is growing interest in trying to figure out this new industry and take advantage of the opportunity. Now billed as the largest Fintech industry meeting in the world, Lendit organizers started this event four years ago with about 200 participants. This year’s event attracted more than 5,000 people.

We work on various areas of financial inclusion and are interested in new ways that can help expand access to financial services to hard-to-reach populations and small businesses in developing countries.

We returned with a new appreciation for the magnitude of change that is coming, and how quickly it could occur – and already is in some instances.  Some innovations will help developing countries leapfrog into this new tech era. This could have a significant – and potentially highly positive - impact on financial inclusion, and fundamentally change the nature of financial infrastructure. 

However, these opportunities come with potential risks, such as those related to (un)fair lending practices related to unmonitored use and analysis of big data or increased systemic vulnerabilities due to threats to cybersecurity. 
 

A year in the life of an incubator

Alexandre Laure's picture

Also available in: Français

Youth trained with The Next Economy methodology.
© Cesar Gbedema/Impact Hub Bamako

Last month, Impact Hub Bamako celebrated its first birthday. The first of its kind in Mali, Impact Hub Bamako is part of a global network of more than 15,000 members in more than 80 locations worldwide, from Bogota to Phnom Penh. Combining innovation lab services with incubator and accelerator programs and a center for social entrepreneurship, Impact Hub Bamako provides a unique ecosystem of resources, inspiration and collaboration opportunities for young, creative Malians working towards a common goal.

Co-founded by four young Malians Fayelle Ouane, Kadidia Konaré, Mohamed Keita and Issam Chleuh Impact Hub Bamako seeks to promote entrepreneurship and generate youth-driven solutions to Mali’s problems, as well as support women’s entrepreneurship and encourage social entrepreneurs to build a shared vision and work together for a collective impact.

“Establishing a community of young entrepreneurs was very important to us,” says Ouane, “so that everyone can build on and benefit from each other’s expertise and knowledge.” Indeed, Impact Hub Bamako hosts a diverse community of entrepreneurs, strategic advisors, architects, social workers, students, consultants, renewable energy specialists, and experts in agribusiness, ICT and corporate social responsibility.

By providing a shared space to work, as well as access to meeting rooms, events and that all-important internet connection, Impact Hub Bamako has given participants the opportunity to leverage each other’s expertise, as well as grow their professional networks not just nationally but globally, as Impact Hub boasts a multinational presence.

“This is our comparative advantage,” agrees Keita, now the hub’s director. “Our incubation/acceleration programs seek not only to promote the necessary conditions for job creation in our country, but also to professionalize our workforce and give them the tools to meet the demands of any employer.”