Last Week’s News be read with your first cup o’ coffee.

Below is a round up of last week’s microfinance news. We thank our colleagues for the wonderful work they do in advancing our knowledge of best practices and innovations, as well as challenging us all to remain true to our social mission.

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A Financially Capable Consumer Could Be Your Best Customer
May 23, 2013
By Jasmine Thomas, Program Officer for International Financial Capability & Asset Building, Citi Foundation

…Consumer financial capability is a social and public good with numerous benefits, including creating a greater sense of economic independence for individuals and families, facilitating new innovations and systems for delivering products and services, as well as increasing the competitiveness and productivity goals of countries…

Photo: Innovations for Poverty Action

So, does investing in the financial capability of clients really benefit both service providers and clients? Women’s World Banking and SEWA Bank in India believed that both investing in and ensuring that clients’ financial needs and goals were met would produce social and economic benefits for the institution and the clients. With [Citi Foundation’s] support, the organizations implemented Project Samruddhi to test this theory by embedding financial education within their core banking operations. To support clients’ efficacy, saathis, or bank agents, were taught how to embed short, concrete financial education messages in routine client banking interactions and services.

Read more.

Consumer Lending and Financial Inclusion in Latin America
May 23, 2013
 Xavier Faz, Rafe Mazer, Rudy Araujo, Sergio Navajas

…On March 12 and 13, of this year, CGAP, the Interamerican Development Bank’s Multilateral Investment Fund (MIF), and the Association of Bank Supervisors of the Americas (ASBA) hosted a discussion with regulators in Latin America on consumer lending in the region. This meeting was an important step towards building regional consensus and sharing successful policy approaches from one market to another. Out of these discussions, participants identified several key areas where there is a need for more knowledge exchange and subsequent action to support responsible expansion of consumer lending.

Read more.

The Universal Standards, One Year Later
May 22, 2013
By Meghan Greene, Manager, Microfinance CEO Working Group

[Last year, the Social Performance Task Force began beta testing Universal Standards for Social Performance Management (USSPM).] We partnered with more than 20 MFIs to work to answer a number of questions, including:

  • Process of Assessment: What does it take to conduct an assessment against all 99 of the Essential Practices? How do we use the information that an assessment reveals to improve practices?
  • State of Social Performance Management: How do MFIs view their current practices vis-à-vis the Standards?
  • Feedback on the USSPM: Do MFIs find the Universal Standards to be relevant, achievable, measurable, and understandable?

Click here to read what they learned.

The Future of Provider Ecosystems for Financial Inclusion

Photo by Ellen de Leon (2008 CGAP Photo Contest)

May 22, 2013
By Kabir Kumar, Stephen Rasmussen

CGAP’s five-year strategy recognizes that in most countries poor people are more likely to get financial services from a range of commercial and public sector actors.

…An ecosystem involving multiple providers where each provider plays a specialized role will ultimately close the inclusion gap. The question is how do we get to that future ecosystem?

The good news is that the future where multiple providers serve the poor is closer than many of us realize…CGAP’s five-year strategy recognizes that in most countries poor people are more likely to get financial services from a range of commercial and public sector actors…

Despite growth in widespread agent networks and many more poor people transacting via mobile phones, the progress across markets is not uniform. There are questions about how to unlock scale especially where interconnection in more competitive markets for mobile money could help, an area of emphasis in CGAP’s strategy

Read more.

How to Build Successful BOP Business Models
May 22, 2013
By Rahul Desai

Private companies that want to succeed in doing business with markets at the base of the pyramid (BoP) need to know their customers and their spending habits. They demand quality goods and services even though their cash flow is limited and it fluctuates

Read more.