Highlighting technology innovations in the microfinance sector, the plenary session “Reaching Deeper and Lowering Costs: The Path ahead for Digital Services” at the 2013 Partnerships against Poverty Summit was moderated by our very own Sabina Rogers, filling in for Karen Dávila, noted Philippine broadcast journalist.
It was a fun session, using visual aids to represent certain aspects of a value chain for delivering mobile and financial services. A house represented the client and the start of the digital transaction value chain; then images showed the mobile interface for conducting transactions; a sari-sari represented an agent kiosk; a net represented both communications networks as well as financial networks; and a bank stood in for a variety of types of financial institutions.
Speakers were asked to make use of the array to help them illustrate where the companies and organizations the represented fit into the value chain.
Nadeem Hussein of Tameer Microfinance Bank (Pakistan) led off the discussion demonstrating how Tameer had a role in supporting a number of points along the value chain overall from understanding the consumer landscape to developing mobile transaction interfaces including working with agents, and all as a financial institution.
Raj Singh-Khaira of FINO PayTech (India) and focused on the need for institutions like his to diversify their involvement in a number of ways along the value chain because “the market is not mature enough for us to be just this one component…the agent kiosk in this example.” He pointed to the wide array of services FINO provides to achieve this diversity including a number of types of savings products, insurance, and some loans.
FINO serves over 67 million clients and employs more than 50,000 agents. Technology is important to help reach this kind of scale as opposed to manual transactions. He also mentioned the ability to better track and secure transactions through the use of digital means of transacting.
The role of VISA was presented by Gordon Cooper. “Visa is a Network, a network service provider. It’s all about interoperability,” cited Cooper; continuing, he described a project VISA launched several years ago which focused on finding one key way VISA could contribute to increasing access to formal financial services for low income individuals.
The result: launching mVISA in Rwanda, a mobile transactions platform (see this video). He focused on the necessity of interoperability, which refers to the ability of one financial service provider’s platform to link up with others’ platforms in order to enable customers on different networks or in different financial systems to transact. Increasing interoperability as a means to support wider access will be one major focus for VISA in the digital area.
Napoleon Nazareno of Smart Communications, one of the largest mobile network operators working in the Philippines, echoed Khaira. Smart is not isolated to only providing mobile phone connectivity, but also goes beyond to touch on all aspects of the value chain. Beginning more than a decade ago, Smart launched a small mobile banking service platform. By partnering with financial service providers over the years, this has now grown into a full-fledged mobile microfinance service platform.
Ian Radcliffe of WSBI illustrated their role in supporting the actors involved in the value chain as direct service providers. Their core activity is advocacy, but apart from that, they also deliver training and consultancy services to providers.
He highlighted an initiative begun about four years ago, to understand what it would it take to double the number of savings accounts among poor people. This launched the WSBI savings account program, which is now working with banks in 10 countries to develop and improve agent banking models and mobile banking models now, too.
Nazareno summarized the session nicely at one point during the presentations, pointing to the power of digital channels for reaching the financially exclude citing recent national survey in the Philippines.
He said, “80% of the households in the Philippines don’t have a bank account. On the other hand, 90% of Filipinos have a cell phone,” which highlights the viability of using mobile devices to provide financial services to those who would otherwise remain excluded. Mobile devices can help provide better options to those who are reliant upon riskier, costlier options, and, ultimately, ones that would stand in the way of their journey out of poverty.