Archive for the ‘Financial Inclusion’ Category

Mobile Financial Services for the Poor – What We Must Know

February 4, 2013

Originally posted on our AppLab Blog.

Fredrick Ndiwalana is Relationship Manager, Applab Money Accelerator, and Ali Ndiwalana is Research Lead, AppLab Money Incubator, at Grameen Foundation Uganda.

Members of a VSLA in Western Uganda learn about how to access market information on a mobile phone.

There is consensus that the poor (those living on less than $2.50 per day) need the same kind of financial services as their more affluent counterparts, albeit in smaller affordable units. What is not clear – especially in markets where formal financial exclusion is high and innovation is low – is whether financial institutions can design pro-poor financial products. After all, this is an area where they have not done so well for the so-called rich, despite years of experience. East Africa is such a market.

In Uganda, where Grameen Foundation’s  Applab Money Accelerator is located, financial institutions continue to offer savings products for which the interest earned by the customer is much lower than the rate of inflation. This is something that the average ”financially included” savings account holder has become accustomed to, and financial institutions have always found a reasonable way to justify it such as a low bank rate as well as high operational costs. Though such explanations may be acceptable to the economically schooled, they seem to defy logic when it comes to explaining them to the less schooled.

Read the full post at our AppLab Blog

Why the Mobile Phone Might Not Be as Inclusive as You Think

January 8, 2013

Originally posted at Next Billion. Leo Tobias is a Technology Program Manager at Grameen Foundation.

Mobile Phone TransactionFinancial inclusiveness is a core tenet of our work at Grameen Foundation. Utilizing mobile phones for financial services has gained a lot of traction as a sustainable and scalable solution to serve the 2.5 billion people who do not have access to formal banking services. But does this solution really enable us to reach all of these people?

As part of a pilot program to implement mobile money at one of our partner organizations, a survey was conducted to gather basic knowledge about people’s access to mobile phones and their usage of mobile money and other financial services. While 98 percent of members interviewed have access to a mobile phone, only 78 percent owned their own mobile phones.

So what’s the problem? A previous study conducted by Grameen Foundation at Cashpor, a microfinance institution (MFI) in India, revealed there are significant access, convenience and security issues associated with customers not having their own handset or the knowledge to operate the technology themselves…

To read this full post, visit Next Billion.

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