January’s Most Viewed, Most Shared Posts: Forward progress in inclusion – from finance to the crowd
January’s most-read and most-shared posts on NextBillion took a decidedly forward-looking posture to financial access. And why not? It’s the start of a new year and we have several reasons to be excited for 2015.
Vikas Raj, director of investments at Accion Venture Lab, embodied that optimism in his post Financial Inclusion Trends and Innovators Already Lighting Up 2015: The most exciting technologies and startups in inclusive finance this year. He put together an extensive and impressive catalogue of startups and leaders who are approaching “FinTech” with fresh eyes and fresh apps.
“… one of the biggest opportunities for FinTech is figuring out new solutions to include the billions of lower-income people who are today excluded from formal financial services. And it’s not charity that compels us to reach these customers – it’s good business. These customers represent a big market. In fact, they’re such a significant part of any emerging market’s customer base that any global providers with dreams of international expansion must cater to them if they want to succeed.
“It’s a particularly exciting time because the traditional bottlenecks to reaching these customers – the need for high-touch models and small value transactions, the need for cost-effective means of education and engagement – are exactly the kind of barriers that technological advances can help tackle.”
Financial inclusion was the name of the game for our other two most-read posts in January, which included:
“With the digitization of finance, we face the daunting prospect of ‘the system’ having an unforgiving and unforgetting memory of poor people’s formal debt repayments while knowing little else of any real significance about them. Credit providers will build a profile of you based on disjointed circumstantial evidence, slowly and painfully crossing datasets, almost accidentally – you have $20 in your savings account, a mobile ARPU of $1.70 per month, demonstrated successful repayment of a $10 instant mobile loan – but you can blow whatever positive attributes you’ve demonstrated all on one unpaid debt. One strike, you’re out. Big Data can become the basis for a new exclusion.”
“… while microfinance struggles to reach the very poor, savings and lending groups are expressly designed to meet their needs. Costs are so low because group members, not institutions, take on the tasks of lending, tracking payments and repayment – the major costs of financial institutions – and no funds external to the groups are required since the money lent is the money the members save. Savings groups prove that the poor are not too poor to save and that there is enough savings potential in a group of 20 to meet most members’ needs, which are as much about ensuring there is food on the table and dealing with emergencies as business development.”
Most shared on social media
Choice Exists, Even in Slums: How a Yelp-like model can benefit low-income communities By Priya Iye, founder and CEO of TulaLens, a startup designed to provide real-time feedback on the organizations serving (or failing to serve) low-income people, is a post that deserves your time. The enterprise, still in the very early stages, was informed by Iye’s experience witnessing health ministry officials send pregnant women in agonizing pain on a five-hour boat ride to the nearest hospital.
“We thought, if organizations such as Yelp and Amazon can successfully crowdsource information on restaurants and clothing for upper- and middle-income communities, why can’t we do the same on health, education and other basic needs for low-income communities? Our ultimate aim is to help end users build a community through which they can help each other make more informed choices.
“In our recent pilot, we tested the feasibility of this idea. We surveyed 114 pregnant women who lived in Jiyaguda and Mallapur, slum areas in Hyderabad, on their last prenatal care visit at a social enterprise, private or government facility. Some of the information we collected included wait time, time spent with provider and fees paid. We found that weak feedback loops were indeed a problem. Ninety-five percent of pregnant women had never been asked for feedback on quality of prenatal care services, 58 percent were only aware of one health facility in their area when 30 were accessible on average, and 100 percent found the data we shared useful. We then mapped out prenatal care facilities and the associated quality of care, and went back to the same women we originally surveyed to share the crowdsourced data.”
Congratulations to January’s winners and to everyone who contributed to NB last month.
Scott Anderson is the managing editor of NextBillion.