Archive for: Events

Join CGAP and industry experts at a Virtual Conference to discuss the impact of the financial crisis on microfinance and poor people: The Financial Crisis and Microfinance: Experience, Insights, and Implications.

Over the course of three days (November 18-20), participants will share their experiences and insights and discuss how to respond to upcoming challenges. The Virtual Conference will focus on microfinance institutions and their clients, and on donors and investors.

To register for this conference, please click here, or copy and paste the following URL in a new browser window: http://nutshellurl.com/24c.

Ahead of the conference, we encourage all participants to complete a short survey to help guide our discussion. Results will be compiled and shared with all participants during the conference.

This Wednesday, CGAP’s Kabir Kumar and Ignacio Mas will lead a discussion based on their recent paper: Banking on Mobiles: Why, How, for Whom?

The announcement is below. Check back here for updates on Wednesday. Submit your questions by commenting on this blog post or just write to me at jrosenberg@worldbank.org.

-Jim

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I attended SWIFT’s SIBOS conference last week. This event couldn’t have been scheduled for a more exciting time – it opened with the fresh news of the turmoil on Wall Street. There was much talk about that.

As for the issues we are focused on, there was a panel discussion on mobile banking. A Western Union representative said that their average remittance size is $350. But in mobile trials (from Hawaii and UAE to the Philippines, using both Philippine telecom services Smart and G-Cash) the average remittance size was less than $100. So that’s evidence that there is demand to send lower amounts, if only the commission structure permits it. A Wells Fargo speaker said their average remittance size is closer to $500.

From India, ICICI explained their mobile remittance product. Essentially, the recipient gets notified by SMS, and then punches the code he gets on his SMS into a specially-enabled ATM to withdraw the cash. So the mobile is used purely for notification purposes, not for fulfillment.

As for some of the more cutting edge technologies, estimates on NFC-capable phones by 2011 or so ranged from 10% to 30% of installed base. So either way, it is not likely to reach poor people in developing markets in sufficient volumes any time soon.

SWIFT is creating a new messaging type especially for international remittances. Their main messaging business is related to inter-bank transactions, whereas they want to support person-to-person transfers. This was deemed by all banks to be essential to make it easier for each bank to set up bilateral relationships with other banks along remittance corridors, without having to agree a separate set of messaging syntax, rules and contracts. SWIFT would standardize all that and carry the messages too, in return for a commission. A dozen or so banks are now piloting this new product.

Today, CGAP is announcing a new effort around mobile banking  to identify, fund, research and champion technology enabled banking services for 25 million people in 20 countries. CGAP CEO Elizabeth Littlefield will announce the plan at the Clinton Global Initiative’s “Mobile Banking Call to Action.” That takes place at 4pm eastern time in New York City.

Press release follows the jump…meanwhile, you can watch the Clinton Global Iniative here.

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Thanks to our colleagues at IFC for looking after this great summary of last May’s Mobile Money Summit in Cairo. Excerpt:

As GSMA CEO Robert G. Conway stated in his opening remarks, “The ubiquity and convenience of the mobile phone is bringing new value, opportunities that no one foresaw before in the delivery of financial services.” For businesses, the opportunities include reaching vast numbers of new customers and providing better service to existing customers. For customers, the opportunities include increased affordability, convenience, and security. The mobile phone may even open access to financial services for many who are currently excluded from the market altogether – the majority of the population in many developing countries. “

Related: Mobile Banking Needs Standardized Innovation

Why do so few people have accounts with formal institutions? One key constraint is the sheer cost to banks of building and maintaining branch networks to reach dispersed or low-income populations.

On July 22 at a CGAP lunchtime event in Washington, Ignacio Mas talked about how networks of agents can be used to optimize access for poor clients, basing his presentation on the recent CGAP Focus Note “Banking Through Networks of Retail Agents.” He began the discussion by drawing an analogy with Coca-Cola. Why is Coke sold in every tiny village around the world, while financial services are not? The obvious response is that Coke leverages retail stores in these locations to distribute and sell its product on its behalf. In a similar way, the logic of branchless banking as a low-cost transactional channel is to use existing retail infrastructure to provide financial services everywhere, literally. By deploying technology that already exists in SIM cards and mobile telephones, transactions can be made at retail agents that then clear with a customer’s bank.

There are various objectives of agent networks from a bank’s perspective. They can be used to simply offload transactions from branches; they can target a different customer profile such as low-income people; they can serve as a branch substitute to extend geographic coverage; and finally they can serve as a branchless banking mechanism to minimize fixed costs and accelerate scale.

Globally, the use of banking agents is still in its early stages. Brazil is a leader with about 55,000 agents nationwide, followed by South Africa with 6,500 agents. In all, fewer than a dozen countries have begun using retail agents for banking services.

This low uptake may be explained by the three biggest challenges with branchless banking. First, the “perfect” business model is still being worked out. How can agents be sufficiently incentivized to carry out cash transactions? How can transaction volume, which has so far been quite low, be increased? Second, while most banks do not seem very interested in using agent networks to cater to new customer segments, most microfinance institutions do not have the capacity to take advantage of technology-based channels. Third, branchless banking presents new challenges in regards to regulation.

None of these challenges are insurmountable. With a bit of innovation and creativity, the potential for banking through networks of retail agents remains strong.

Information technology can help microfinance institutions reduce costs, improve efficiency, and increase outreach. So why do so many MFIs either end up sinking funds into poor technology investments or simply not investing in technology at all? We’re conducting a survey to find out, and we’d like your input. The survey results will help MFIs understand their strengths and weaknesses relative to other MFIs and will identify opportunities for vendors, donors, investors, and MFIs in the microfinance technology market.

Whether you’re in a small MFI with just a few dozen clients, or a big organization, your responses will help build a picture and create greater awareness of what’s going on around information technology for the industry. To be eligible for the raffle to win up to $15,000 in free consulting services, please take part before our deadline of September 15, 2008. The survey is available both online and offline in English, French, and Spanish, and offline in Arabic. Thanks for your help.

“Standardized innovation” is the phrase used by Dialog Telekom’s (Sri Lanka) Dr. Hans Wijayasuriya at the Mobile Money Summit in Cairo today. In a phrase I think is quite useful, he was summarizing the need to have mobile banking standards, interoperability, worldwide. Right now we are observing many proprietary systems taking shape – most notably, M-PESA in Kenya, Smart Communications, and as they move further into the m-banking space, Western Union. Imagine having hundreds of transaction networks – Visas, Mastercards – that don’t talk to each other. Hopefully, that’s not the direction in which mobile banking is headed. Proprietary is fine, interoperable is essential.

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Mobile banking, access to finance, and the attendant challenges and opportunities are all on the agenda at the Mobile Money Summit, which takes place May 14 – 15 in Cairo. This is an opportunity to hear from innovators, meet new partners, and engage with leaders from finance, telecom and the development community. CGAP is proud to co-organize this event with DFID, IFC, and the GSM Association, which represents more than 700 mobile network operators.

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For some, El Salvador is famous for some of the best surf spots in Central America. For others it is the kilometer-long black-sanded beaches that come to mind. This week, for the Latin microfinance community, San Salvador will be famous for one of the largest and most reputable microfinance events of the region: The 10th Inter-American Forum on Microenterprise.

Looking at the agenda, the three day conference brings together an amazing group of around 1,500 of the region’s microfinance providers, its networks, governments, donors, and even the royals with the participation of H. M. Queen Sofia of Spain.

CGAP is organizing a panel on technology’s potential to increase outreach and depth of access to finance. Our project partners Visa Credibanco and GXI, as well as Opportunity International will share their lessons learned and challenges to implement technology projects.

Watch this space for more.