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The Power of Trust in Digital Finance: How to Leverage Trusted Technology to Maximize Inclusion and Impact
Trust can be a significant barrier to engagement in digital financial services among low-income users. According to William Derban at Opportunity International, that means providers must often take measures to address this trust deficit when developing digital services that target these customers — particularly women. He discusses Opportunity International's new Trusted Tech Microfinance Initiative, and shares six ways the initiative is working to build clients’ trust in the technologies Opportunity and its microfinance partners are using.
- Categories
- Finance, Technology
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A Hidden Driver of Financial Inclusion: Why Enabling Regulation is Essential to Fintech Success in Emerging Markets
Fintech innovation is jumpstarting financial inclusion around the world, driven in part by enabling regulation which allows providers to experiment with new approaches. But as Monica Brand Engel, Ganesh Rengaswamy and Jonathan Whittle at Quona Capital explain, it can be difficult for regulators to simultaneously fuel innovation, adapt to new technologies and government mandates, and protect customers. They explore what the fintech sector can learn from successful regulatory approaches in countries like Brazil and India.
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- Finance, Technology
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Can Access to Smartphones Bridge the Digital Divide in Sub-Saharan Africa?
Research shows that mobile phones can be a useful tool in the fight against poverty, increasing both household income and consumption. But according to Amani M’Bale at the Bill & Melinda Gates Foundation and Graham A.N. Wright at MicroSave (MSC), to reach that potential, it’s important that these phones are able to bridge the digital divide, becoming accessible to, and used by, the underserved people they can benefit the most. They share several factors that can increase — or limit — the usage of smartphones and other mobile devices in sub-Saharan Africa.
- Categories
- Finance
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The Benefits – And Downsides – of ‘Buy Now, Pay Later’: Is it Enhancing or Hindering Financial Inclusion?
Buy now, pay later (BNPL) schemes offer consumers immediate possession of goods, which they pay for over time via (usually interest-free) installments. According to Sarah Corley at the Alliance of Digital Finance Associations and Lotte Schou Zibell at the Asian Development Bank, BNPL can expand financial inclusion and access to consumer goods in emerging economies – but by offering easier access to credit, it also presents some pitfalls. They discuss the growth of BNPL, its benefits and risks, and some key practices that can maximize its positive impacts while avoiding potential downsides.
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- Finance, Technology
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From One Crisis to Another: Using Data from COVID to Meet the Looming Challenge of Food Insecurity
Due to a tragic combination of events, countries around the world are facing a widespread and serious food shortage, with the number of severely hungry people projected to swell to 323 million over the course of 2022. Scott Graham, Andree Simon and Anahit Tevosyan at FINCA share data – initially gathered to inform FINCA's COVID-19 response – that shows the impact of this crisis on low-income customers. They explore how financial inclusion organizations can adapt their support to help customers stave off the worst effects of the escalating food crisis.
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- Agriculture, Coronavirus, Environment, Finance
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Why Credit is Key to Unlocking Africa’s Consumer Markets and Boosting Economic Growth
Africa’s consumer market is one of the fastest-growing in the world. But as Fehintolu Olaogun at CredPal points out, this growth has primarily occurred without consumer credit, as most sub-Saharan African economies remain cash-driven at the retail level. He explains why African markets need the kind of organized credit systems that are enjoyed by consumers in more developed markets, and explores the impact that credit access can have on e-commerce, informal commerce and overall economic growth in the region.
- Categories
- Finance
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Augmented Reality for Financial Literacy: An Innovative Approach to Delivering Immersive Customer Education
India's Business Correspondents – i.e., retail agents engaged by banks to provide financial services at locations other than a bank branch – often struggle to learn about the new products and services their banks offer. And though online training has become the new normal during the pandemic, many of these agents find it difficult to complete. Piyush Singh and Rahul Ranjan Sinha at Grameen Foundation India discuss the value of augmented reality in addressing this challenge – and in enhancing online financial education more broadly for underserved customers.
- Categories
- Education, Finance, Technology
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Why Social Enterprises Struggle to Measure Impact – And What Impact Investors Can Do About It
Impact investors typically rely on output measurements, such as total capital invested or number of people served, to assess their impact. But it's harder for investors and their investees to sustainably capture outcome data that assesses actual improvements in customers' lives. Spencer MacColl at Kiva shares data from Kiva's annual impact measurement survey, which reflects the current measurement practices and challenges of the microfinance institutions and other social enterprises Kiva supports. He explores the lessons these findings offer to impact investors and others who are working to design more effective measurement practices.
- Categories
- Finance, Impact Assessment, Investing
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