Tagged: CGAP

Branchless Banking in China: Will Regulation Support Innovation?

Throughout the past few weeks the Chinese banking regulators have intervened on several occasions to put a halt on some innovative products, including virtual credit cards provided by third-party providers and e-commerce companies. At the end of March, People’s Bank of China also announced that it would cap amounts the Chinese can spend using smartphone payment services.

While financial innovation from bank and non-bank actors can create new kinds of risks for consumers, it can also create huge opportunities for the financial sector to expand scale and reduce transaction costs. A recent CGAP report China: A New Paradigm in Branchless Banking? explores how China’s innovative payment ecosystem could significantly deepen financial access in the country, where more than one hundred million people live in poverty and over sixty percent of the poorest population segment has no access to formal banking services.

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Financial Inclusion and Development: Recent Impact Evidence

Global and national-level policy makers have been embracing financial inclusion as an important development priority. The G20 made the topic one of its pillars at the 2009 Pittsburgh Summit (G20 2009). By fall 2013, more than 50 national-level policy-making and regulatory bodies had publicly committed to financial inclusion strategies for their countries (World Bank 2013a, AFI 2013). And the World Bank Group in October 2013 postulated the global goal of universal access to basic transaction services as an important milestone toward full financial inclusion—a world where everyone has access and can use the financial services he or she needs to capture opportunities and reduce vulnerability (World Bank 2013b).

Policy makers have articulated these objectives in the conviction that financial inclusion can help poor households improve their lives and spur economic activity. But what is the evidence for this type of positive impact? This Focus Note takes impact to mean those effects that can be traced to a specific intervention and that would not have occurred otherwise, thus analysis at the micro and local economic levels focuses primarily on the relatively new evidence from randomized control trials (RCTs) or quasi-randomized impact evaluations. At the macroeconomic level it highlights studies using country panel data comparisons.

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CGAP Seeks Examples of Financial Innovation for Smallholder Families

CGAP Seeks Examples of Financial Innovation for Smallholder Farming Families
How did you reach smallholders with an innovative product or financial service?
Smallholder farmers and their families comprise the largest group of people (by livelihood) living on less than $2 a day. As part of a new initiative to understand how tailored financial services can help these families, CGAP is seeking examples from businesses who have successfully taken to scale a viable financial product, range of products, or services for smallholder families.
CGAP will select some of these examples to study in depth and share with broader audiences via our website CGAP.org and on social media channels. Organizations sharing their experiences also have a chance to win a tuition scholarship for one participant at the Rural and Agriculture Finance Program offered by the Boulder Institute of Microfinance in Turin, Italy, 7-25 July 2014.
Join our efforts to get a better understanding of financial services and business models that help underserved smallholder families globally to improve their lives.
Working together in Talesh City mountains
Photo Credit: Reza Golchin
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How Can the Poor Embark on a Pathway To Sustainable Livelihoods?

 
Creating the appropriate pathways for people to escape extreme poverty is one of the biggest challenges of our time.
 At CGAP, we’ve been exploring the potential of the Graduation into Sustainable Livelihoods Approach (Graduation Approach)—a model designed by BRAC in Bangladesh, which combines a mix of interventions to escape extreme poverty, ranging from safety nets and the creation of livelihoods, to access to financial services. Participants receive consumption support, access to savings services, skills training, a variety of assets, and regular individualized coaching over a period of 18-36 months. The goal is to help them create livelihoods that will end a lifelong existence in abject poverty.
 
At the global level, the extreme poor are those living with less than $1.25 a day, estimated in 2012 to be nearly 1.2 billion people. Individual countries may use higher poverty lines, but however defined, the extreme poor tend to be food insecure, lack education, usually have few or no assets, and are limited in their options to make a living. They often exist on the outskirts of society and lack self-confidence or opportunities to build the skills and resilience necessary to plan ahead.
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Infographic: International Financial Inclusion Funding

In 2012, at least $29 billion was committed by international funders to advance more inclusive financialsystems in developing countries. CGAP’s latest funder survey estimates total global commitments based on survey data from 22 international funders and publicly available data from Symbiotics MIV Surveys. Continue reading