MIX News Brief: 29 March 2019

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29 March 2019

 

Every other week we post recent articles curated by our team of data analysts and financial sector experts.  The articles span sectors and topics including fintech, smallholder finance, mobile money and more.  The MIX News Brief is intended to keep socially responsible investors and businesses updated on the latest thinking on financial services for the poor because, at MIX, our mission is to provide the data, analytics and insight that enable decision makers to build inclusive financial services ecosystems.  Let us know what you think by tweeting at @mix_market!   

 

If, like us, you obsessively follow #financialinclusion on Twitter, surely you would have seen all the conversations coming out of the Financial Inclusion Summit in Oslo yesterday organized by FintechMundi and supported by partners including Mastercard, World Economic Forum and others (disclosure: MIX is a supporting partner).  In honor of the stimulating and provocative discussion, this week's MIX News Brief highlights some of the themes and reports launched during the event.

 

Unraveling the web of inclusion (Mastercard)

The subtitle says it all: Re-thinking the unbanked.  This report, launched at the Summit, makes the case that financial inclusion is not simply about providing greater access to products and services but, rather, about regulated financial service providers beating out their informal counterparts by providing better experiences.  Ultimately, this requires overcoming obstacles related to cost, complexity, convenience, customization, and cultural relevance.  But there is plenty of evidence that it's worth the effort.  As Camilla Nestor (CEO of MIX) puts it in the report, "When we look at the data, one clear takeaway comes to light: The poor - especially poor women - are neither riskier nor less profitable to serve than other, more mainstream clients."

 

Driving sales through digital working capital loans for small merchants (Better Than Cash Alliance)

Here's an instance where a title clearly describes the article.  Still, this case study is worth the quick read to learn how Unilever partnered with Mastercard and and Kenya Commercial Bank to build a platform that helps "reduce cash challenges" of small merchants and distributors in Kenya.  With Jaza Duka, the benefits to the participants quickly accrued as the digital working capital platform enabled them to more easily keep their shelves stocked, increase customer traffic, and even make school payments for their children.  As you'll see on under the "Building Blocks For Success" section, each of the three partners brought a unique value proposition to the partnership (and also plenty of data!).

 

Does financial inclusion impact the lives of the poor (CGAP)

This post is the first of a series from CGAP that will build on the important discussion recently on the impact of financial inclusion on the lives of the poor.  While this post from Mayada El-Zoghbi (more disclosure: Mayada leads MIX's Board of Directors) is more of the 'appetizer' than the 'main course', it sets the tone from the start by calling for a coherent theory of change to build an impact narrative that is more relevant than increased income for microentrepreneurs or lower transaction costs for payments.   The question posed, which will push the conversation forward, is "How does the use of [financial services] translate to wellbeing?"  

 

Rogue Mobile Money Agents and Black Market SIMs of the DRC: A Barrier to Financial Inclusion (CFI at Accion)

This title certainly reads like an article out of WIRED.  But as the authors write, the "proliferation of rogue mobile money agents selling black market SIM cards in the Democratic Republic of Congo bogs down provision of high-quality financial services."  How?  Well, for one it affects the quality of service and puts customers at risk.  And it's not a large leap of logic to guess that even a single negative experience with an "unscrupulous agent" could make it less likely that a customer returns to that DFS provider or even that type of service.  Besides, even if the agent's intentions are good, the lack of training can lead to less-than-ideal service quality for customers and liquidity issues for their own busineses.  Fear not, mobile network operators in the country are already taking measures to address the issue.