Breaking news: ProCredit exitED Africa!

Posted on 27. May 2015 by hannah

PCBCI am not sure if all of you remember my blogpost “Is ProCredit exiting Africa” in September 2014. Up to today this was my most-read blog which also stirred up many of my former colleagues and bosses at ProCredit Holding in Frankfurt. Well, at least one needed to ask the question which was an obvious one after having sold Angola, Sierra Leone, Ghana, and Mozambique. The only African ProCredit bank left at that point was the one in the Democratic Republic of C which I had been working for from 2008 to 2011. In December 2014, the topic became interesting once gain and I wrote “Twenty Little ProCredits…..”   talking about the first Latinamerican ProCredit Banks which had been sold to their Latinamerican competitors. Well, I guess now my horror became reality:

ProCredit sold its last African bank. Continue reading →

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A US study: Utility and telecom payment data predict loan repayment capacity!

Posted on 27. May 2015 by hannah
ount Delinquencies with  Utility and Telecom  Payment Data

Account Delinquencies with 
Utility and Telecom 
Payment Data

I still remember my times at CGAP when the Technology Team was working with PERC, a research center and advocacy group working on:

reducing credit invisibility, ie., “credit invisibles” without credit data are most often rejected by mainstream lenders using automated underwriting systems;

abolishing the “credit catch 22”, i.e., mainstream lenders rely on credit reports to assess credit risk and to extend a loan, plus credit bureaus only have data on the already banked population. In this dynamic to qualify for a loan, you will already have to have credit.

pointing fingers at alternative data which presents a wealth of data that could be used to drive financial inclusion. If it can be accessed, it could dramatically increase access to financial services for low income persons worldwide. Continue reading →

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Tanzania, are you ready for Digital Finance PLUS (DF+)?

Posted on 18. May 2015 by hannah
Framework developed by CGAP in partnership with McKinsey.

Framework developed by CGAP in partnership with McKinsey.

Everybody wants to be digital finance ready! My last blog on the EIB diagnostic of 7 markets in Africa and their potential readiness to replicate Kenya with its Mpesa story already launched this topic. The same day, CGAP launches its blog post “Which Markets are Ready for Digital Finance Plus?”. But here we are talking about something slightly different than just digital finance. CGAP is talking about ”Digital Finance PLUS”.

What is digital finance plus (DF+) ? CGAP defines this as businesses using financial innovation to reach poor people with essential services and which are impacting not only financial inclusion, but are also making it easier and more affordable for poor people to get access to essential services they formerly lacked, such as energy and clean water. Another term used here in Luxembourg sometimes would be impact investing where it is not only about the onlending, but also about access to health or education. In very easy terms, it might be a financial products, e.g., a loan that helps the poor buy solar panels, i.e., get access to electricity. Continue reading →

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Can we have another Mpesa? – a study analyzing 7 African markets

Posted on 11. May 2015 by hannah

Digital Financial Services in Africa: Beyond the Kenyan Success StoryThis blog has been long overdue. The European Investment Bank (EIB) together with the UN Capital Development Fund (UNCDF) launched a study in December 2014 on digital financial Services (DFS) in Sub-Saharan Africa, notably Benin, Cameroon, Kenya, Mozambique, Nigeria, Senegal, Uganda and Zambia.

The objectives of the study was to assess the key success factors from Kenya which is known globally as the DFS success story and how these success factors compare to what is found in the other seven markets of the study, and how lessons from Kenya could be applied to expand DFS in these 7 markets. Evidently for the EIB, the main purpose was to find potential investment targets to further financial inclusion. Continue reading →

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The European Responsible Investment Fund Survey 2015

Posted on 4. May 2015 by hannah

European Responsible Investment Fund Sruvey 2015In line with my blog on social performance of Microfinance Investment Vehicles: „Practicing what you preach?! Social Performance of 5 social investors“, and the one on the GIIN (Global Impact Investing Network) “Impact Investing Network: an analysis of 300 impact investing funds”;  there seems to be rising demand from clients seeking to invest in companies, organisations and funds with the aim not only to achieve a financial return, but to also generate measurable social and environmental benefits.

Striving to help the asset management industry to capitalise on this trend, ALFI, the Association of the Luxembourg Fund Industry, has commissioned the third responsible investing study. Its aim is to give an overview of the market by analysing recent and expected developments on both the supply and the demand side. Continue reading →

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Nigeria: CBN approves 2 models of mobile money services

Posted on 25. April 2015 by hannah

Agent Network Accelerator Survey: Nigeria Country Report 2014 It took them quite some time, but I guess they have gotten around finally doing it. If this is the right set up we will see, but it is a start.

After years of market development, digital finance in Nigeria has still yet to take-off.  The market is still experiencing some regulatory impediments, but most of all, providers need improved strategic approaches to their products, their core operations and expansion strategies.

On April 6 2015, The Central Bank of Ni­geria (CBN) has ap­proved two models for the implementation of mobile money services in the country.

The Regulatory Framework and Guidelines on Mobile Money Services in Nigeria is­sued by CBN on its website, classified the services as bank-led, which is a bank and/or its consortium as lead initiator opposed to non-bank led, which is a corporate organisation duly licensed by CBN as lead ini­tiator, in many cases a mobile network operator (MNO). Telcos are restricted to act solely as MNO providing infrastructure for this payment space. Continue reading →

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Financial inclusion – even though it sometimes feels like a Sisyphus job….

Posted on 17. April 2015 by hannah

The Global Findex Database 2014

However, I must say I felt happy after reading the recently published Global Findex Database 2014. The document presents the current state of financial inclusion and even though we are still missing 2bn people currently unbanked (of which 1.1bn are women), we still were able to provide 700m people with bank or mobile money accounts between 2011 and 2014. So how did this happen? Continue reading →

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Combining inclusion and protection?

Posted on 11. April 2015 by hannah

… so this is a guest post by guest blogger Claudia Huber:

MshwariI remember Compartamos’ initial public offering (IPO) in early 2007. Microfinance still being considered the panacea to all development problems, Compartamos shares were 13 times oversubscribed and sold at 12 times the book value producing proceeds of 450 million USD. Did the initial owners become rich on poor people’s backs? Many papers analysed this question and an outcry went around the (microfinance) world when it became publicly known that Compartamos charged their borrowers an effective interest rate of around 100% p.a. Continue reading →

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So! Microfinance has no impact on poverty reduction?!?

Posted on 6. April 2015 by hannah

where credit is dueThis question has been discussed in many fora and is definitely an important one for donor organisations justifying their funding of microfinance projects and programs. Daniel Rozas, a microfinance consultant based in Brussels, Belgium, wrote a blog in February 2014 “Microfinance is dead. Long live microfinance.” In this blog, Daniel presents the results of six randomly -controlled (RCTs) studies by Abhijit Banerjee, Dean Karlan, and Jonathan Zinman. David Roodman of the Center for Global Development (CGDev) in his book “Due Diligence – An impertinent inquiry into microfinance” only found the following result:

The average impact of microcredit on poverty is about zero….

Continue reading →

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State of the Industry – Mobile Financial Services for the Unbanked

Posted on 28. March 2015 by hannah

GSMANo time to read it? Let me do it and write out the main messages for you:

Most of us know the data: 2.5bn people unbanked and relying on informal financial services which are unsafe, inconvenient, and expensive. However, 1bn people have access to a mobile phone which could provide access to a wide range of services. Since 2009, the Mobile Money for the Unbanked (MMU) programme helps mobile money services to develop services for the underserved and thereby pushing financial inclusion. Continue reading →

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