MIX News Brief: 9 November 2018
9 November 2018
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!
The subtitle of this article could be "Western Union may become relevant again". Snide remarks aside, Safaricom's announcement that M-Pesa is "going global in a deal with Western Union that would allow users to send money all over the world" highlights the significant value provided by the latter's global network of 500,000 agents. This latest move is also a testament to Safaricom CEO Bob Collymore's committment to continuous innovation and expansion. Most interesting, we think, will be how this affects fintech startups TransferWise and WorldRemit, both of which have been aggressively eating into Western Union's market share.
The Agricultural SME Finance Challenge (Agrilinks)
This article might be a few months old, but its lessons should resonate for years to come. The Council of Smallholder Agricultural Finance (full disclosure: MIX is a data partner to CSAF) completed a USAID-funded study conducted by Dalberg that, in their words, "quantified the economics of agricultural SME lending." Though the tagline leaves something to be desired, the findings are instructive. For example, loans in Africa were twice as likely to end up in recovery than those in Latin America, and short-term loans performed better than long-term loans. Of course, the data was limited to CSAF members' portfolios but the article is worth a read for those interested in pulling apart the true cost - and performance - of smallholder agricultural lending.
Tamara Cook starts this blog post with an incisive sentence: "Fintech only matters if it is helping Kenyans solve real-world problems...". With interest in fintech at an all time high, it is refreshing to see practitioners realistically assessing the benefits of financial technology for wealth creation and poverty reduction. The blog includes a laundry-list of FSD Kenya's activities but also includes a few useful observations, two of which stand out. One, fintech leaves some people behind, particularly those without phones, identification or illiterate. Second, innovation can get ahead of market conduct principles. This honest reflection is an important piece of the larger conversation around fintech for impact.