NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wrap-up from the IFC-CGAP-Visa conference: Next Generation – Access to Finance

?With our mobile commerce partnership in Japan, we’ve turned cell phones into wallets!? I paraphrase one of the morning presentations on the possibilities of mobile banking.
?You can store money on your cellular device,? the speaker declared, ?buy airline tickets, participate in loyalty programs, send remittances!?

The guy sitting next to me grinned and whispered ?Well, don?t lose your cell phone.? Everyone in the immediate area chuckled audibly. The speaker, who I should stress was in the midst of delivering a strong and inspiring presentation, didn?t notice? or he did and courageously soldiered on. Either way that small aside kind of summed up some of my sentiments on the conference yesterday, a day marked by truly innovative thinking on how to creatively utilize available technology to bring the BoP into financial markets, but ideas that maybe needed to be brought out of the clouds and into the villages of India.

A key word that kept coming to mind for me was implementation. In fact, “Implementation, implementation and implementation” was a phrase the Director of Global Financial Markets at the IFC used in his lunchtime address, encouraging conference participants to strive for more than just great ideas in microfinance, but real practical ways to implement these ideas on the ground. Indeed, is this not why we had all gathered in the illustrious headquarters of the World Bank, we development professionals, business hot-shots and lowly junior staffers? Surely for something more than to mingle over gourmet brownies and cups of Splenda-heavy fair trade coffee?

The impression I came away with was: great progress, strong insights, but not enough practicality yet. Many of the presentations were heavy on describing the technical aspects and potential of new models for mobile phone banking (m-banking), credit scoring for the excluded and technologically enhanced social safety-net programs. These presentations fell short of showing how these systems would work out in real places or how they would impact real people in those places. For a telling example of this, see the below slide* from PRBC. This is showing the audience that alternative payment data such as cell phone bills in the absence of the established credit histories that BoP consumers often lack:

How many people pay formalized electric or cable bills in the sprawling favelas of Rio? What about in rural Kenya? While this presentation did a great job of showing the benefits of Alternative Data collection for lower-income groups in the U.S., only two slides were dedicated to possibilities for developing countries, and these questions of implementation were not fully addressed.

Laura Cuda from Visa gave a pretty solid presentation on provisioning government services through distributed visa cards that are safer and more efficient than delivering cash payments. In one vivid anecdote she gave an overview of the Visa Sekulula card in South Africa, a benefits delivery system that relies on an ATM machine roving from village to village on the back of a truck for people to withdraw cash from. At first I was lsot in thought wondering if I could get Visa to charter a drive-up ATM for my aparment building.

Then it occurred to me that Sekulula was just one service example, and granted, Laura had a few more success stories to boast, but for the benefit of conference participants, how can other stakeholders implement similar programs in different locations? How do we determine if those programs will transfer or are worth implementing elsewhere? The real how-to was missing from an otherwise impressive presentation.

I spoke with UCLA MBA student Ann Le about this at the break – she seemed to agree and told me about how her recent research in India drove home for her that microfinance initiatives are much more difficult to bring to fruition than most people realize. She discussed this while showing me her research overview one-pager – it was printed on some of the nicest letterhead I’ve ever seen: earthtones, slightly grainy with stark blue lettering. I told her she was definitely an MBA. We agreed that one of the best presentations we had seen was Aishwarya Rattan’s description of the Microsoft India approach to m-banking. One practical solution that really caught my eye was their use of text-free interfaces for illiterate users, such as this one that Microsoft uses for for job-seekers in India (think of a text-free monster.com).

An impressive BoP adaptation – at the next conference I’ll look forward to seeing more of these great ideas in action, getting real results in terms of poverty alleviation. It will be enlightening to see how some of these newer microfinance initatives are adapted to local contexts and practically implemented in the future.

*Slides pulled directly from a flashdrive containing all of the conference presentations, courtesy of Visa. As I write this, I have decided that Visa should be in charge of providing free gear for every conference I attend from now on.