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The Rise of a New Asset Class: Can ‘PAYGo Finance’ Connect Investors to Low-Income Customers?
Lendable has pioneered a marketplace lending platform that connects alternative lenders in East Africa with impact and institutional debt investors, to provide financing for leased assets like solar panels and motorcycles. According to BFA, providing these alternative lenders with structured debt financing could potentially give rise to a new asset class: PAYGo finance. If successful in raising funds from investors at scale, the Lendable approach could bring financing for low-income individuals full circle.
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How Flexible Financing, Solar Panels and Data Could Be Key to Financial Inclusion
With over 1 million units installed in the past four years, the PAYGo financing model is already unlocking significant growth for the off-grid solar industry. But the sector also faces formidable challenges. FIBR, a project by BFA in partnership with Mastercard Foundation, is exploring ways PAYGo solar can leverage data to make better point-of-sale decisions, customize product offerings, engage and retain agent networks, inform future follow-on products, and build linkages with other financial service providers.
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Inclusive Fintech: Four Lessons for Optimizing Customer and Tech Journeys
Catalyst Fund – a unique accelerator model that provides direct and tailored technical assistance to complement a startup’s skill sets – spent the past year working directly with early-stage fintech businesses in emerging markets. Here are some of the lessons they gathered, both on the tech side and the customer side. A key takeaway: Trust is slowly built but easily destroyed.
- Categories
- Finance, Technology
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Financial Inclusion Takes the Next Step: An Interview with MetLife Foundation President Dennis White
As NextBillion launches our new Financial Health site under the sponsorship of MetLife Foundation, we touched base with its president and CEO, Dennis White. In this wide-ranging interview, White discusses the evolution of the financial inclusion movement, and the work the foundation is doing to advance it – including its grant-making and investing approach, its ongoing challenges, and what it has learned from both success and failure, among other issues.
- Categories
- Finance, NextBillion Originals
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Lessons Learned Using Mobile Tools to Compile Financial Diary Data
Financial diary methodology is a powerful tool for studying financial inclusion, especially if digital tools are used. Using a mobile data collection and analysis app (which also worked offline) and a cloud-hosted database, Catholic Relief Services drew household data from rural areas in real time and amassed thousands of data points generated by tracking people’s financial lives each week.
- Categories
- Finance, Technology
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Why Alternative Lending Struggles to Scale in Emerging Markets – And What Fintech Companies Can Do About It
Fintech models have proliferated in most developing countries, but alternative lending has struggled to gain scale. That's why FIBR, a project by consulting firm BFA in partnership with The MasterCard Foundation, is bringing together fintechs and banks to use networks of small businesses – shops, clinics and even local schools – to deliver digital financial services to low-income customers.
- Categories
- Finance, Technology
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Machine Learning Meets Credit Scoring: How it Can Help Reduce Loan Delinquency Costs
Investment in predictive algorithms for credit scoring is a no-brainer for sophisticated digital financial service providers. Brick-and-mortar financial institutions that are just beginning to explore technology applications should follow suit, according to BFA, because credit scoring optimizes three business layers that improve the overall bottom line.
- Categories
- Finance
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Why Low-Income Families Don’t Send Their Children to College. Hint: It’s Not Always About Money.
Household income is not the only limiting factor as to why children of low to upper-low income families do not attend or save for university. Significant behavioral reasons are also involved, and ESCALA, which helps families save for higher education, worked with BFA’s customer insights team to identify and develop a plan to help overcome a few of them.
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