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Toolkits and Guides

&gt; Posted by Carol Caruso, Senior Vice President, Channels and Technology, Accion

<a href="https://www.flickr.com/photos/39898825@N02/3721485426/"><img class="aligncenter wp-image-16165" style="margin-top:5px;margin-bottom:5px" src="http://centerforfinancialinclusionblog.files.wordpress.com/2014/09/3721485426_56cb8a13f3_z.jpg" alt="" width="580" height="387" /></a>Guatemala presents great potential to advance financial inclusion through the adoption of digital financial services (DFS). Only 22 percent of the population has a bank account with a formal financial institution – in most cases one of the three largest commercial banks - while almost every Guatemalan household has a mobile phone (<a href="http://www.gsma.com/newsroom/gsma-mobile-economy-latin-america-report-2013/" target="_blank">8.8 million unique subscribers</a> among a total population of 15.5 million). Yet most financial transactions are still conducted at bank branches. The logistics challenge of reaching isolated rural communities results in high distribution costs for the banking sector, hence it is no surprise that in 2012 Fitch Rating described the banking system as highly inefficient.

Some innovation in delivering financial services has taken place in the last few years. A few banks have implemented agent networks and the three mobile network operators now offer mobile financial services. But the results achieved are far from what the players and the supervisory authority were expecting in terms of usage and increased financial inclusion. For example, the leading mobile money service, Tigo Cash, is being used by MFIs in a limited way. Instead of empowering clients to use the available mobile wallet, clients primarily use Tigo agents for cash-in/cash-out transactions. While this over-the-counter (OTC) service through an expanded distribution channel has benefits and works in nascent environments, it is far below the potential of DFS in Guatemala.

To explore opportunities and barriers to mobile financial services and other pressing issues such as corporate governance, risk management, and social performance management, more than 300 market players decided to gather at the first Congreso de Microfinanzas de Guatemala, August 28 and 29. For the conference, I was invited to lead a workshop on Trends in Mobile Banking and Micro-Financial Services. Practitioners from many financial institutions shared their views and engaged in a debate on their concerns and goals for digital financial services. Starting with a clear definition of the mobile banking ecosystem and key dynamics among players, the audience was introduced to important themes such as risk management, adoption challenges, and leveraging partnerships. The latter was particularly well received by local MFIs who lack internal resources to reach adequate scale in DFS. A session of the workshop was focused on agent banking and was led by Sandra Calderon – Channels and Technology Manager at Accion - who presented agent banking trends and challenges and examples of various Latin American networks that provide good practices.

While there were questions and discussion about how to best design mobile banking services particularly for serving low-educated clients in rural areas, a key issue that concerned many participants was the role of mobile network operators versus financial institutions. Many of the organizations were looking for advice on how to best engage with MNOs to develop a symbiotic relationship. There was much debate however around how MNOs may quickly become competitors if regulation allows additional types of financial services such as rapid-credit and mobile savings accounts bundled with insurance. This important challenge is of course also applicable to markets beyond Guatemala and requires deep relationship building among sector participants, understanding player incentives, and most importantly having an entrepreneurial and innovative mind to embark upon and test new ventures.

This debate will certainly continue in Guatemala and beyond for the near future as all actors in this ecosystem struggle to best serve BoP clients... and is welcomed here at CFI.

Image credit: <a href="https://www.flickr.com/photos/39898825@N02/3721485426/" target="_blank">Drew Coffman</a>

Have you read?

<a href="http://cfi-blog.org/2014/08/19/on-the-pathway-to-responsible-microfinance-an-update-on-the-microfinance-ceo-working-groups-progress/" target="_blank">On the Pathway to Responsible Microfinance: An Update on the Microfinance CEO Working Group's Progress</a>

<a href="http://cfi-blog.org/2014/09/08/emerging-themes-in-responsible-digital-finance/" target="_blank">Emerging Themes in Responsible Digital Finance</a>

<a href="http://cfi-blog.org/2014/07/28/mobile-money-sprinters-adapt-to-local-conditions-in-pakistan-somaliland-and-zimbabwe/" target="_blank">'Mobile Money Sprinters' Adapt to Local Conditions in Pakistan, Somaliland, and Zimbabwe</a>

Adopting Digital Financial Services in Guatemala

Accion Global Advisory Solutions

Latin America and The Caribbean

Agent Banking

Delivery Channels

Digital Financial Services

Mobile Banking

Payments

Blog Post

Prateek Shrivastava

Priya Punatar

Scott Stefanski

Kathleen Yaworsky

India

South Asia

Access Usage Gap

Advisory Services

Appropriate Product Design and Delivery

Challenges and Crises

Consumer Protection

Credit

Customer Centricity

Digital Credit

Enabling Environment

Financial Inclusion Strategy

Financial Service Providers

Financial Technology

MSME/SME Finance

Responsible Digital Finance

Underserved Groups

Data Analytics

Alternative Data

Banks

Entrepreneurs of MSMEs

Partnerships

Supply Chain Finance

Risk Management

Fintechs

Microfinance Institutions

India is a global leader in financial inclusion. For over a decade, Accion has worked with and learned from India’s innovators, investors, and policymakers to expand economic opportunity for its people and businesses.

The Micro, Small, and Medium Enterprise (MSME) Digital Maturity Assessment is a segmentation tool for financial service providers to guide digital product design based on the needs and digital experience of their MSME customers. It leverages Accion’s global experience and understanding of what influences small business owners to adopt digital products, breaking digital maturity down into key behavioral drivers and enablers. In addition to informing product design and go-to-market strategies, this assessment can show how products can build the digital maturity of customers over time.

<a href="https://content.accion.org/wp-content/uploads/2020/10/msme-digital-maturity-assessment.pdf">Download our Digital Maturity Assessment here</a>.

The Micro, Small, and Medium Enterprise (MSME) Digital Maturity Assessment

Accion is closely assessing how the COVID-19 pandemic is affecting the financial inclusion industry and we are continually looking at ways we can help financial service providers prepare and adapt for disruptions that will occur in the markets and communities in which they work. The virus continues to spread to all corners of the globe and the financial inclusion industry needs to act promptly.

We have developed <a href="https://content.accion.org/wp-content/uploads/2020/03/COVID-19-Briefing-1.pdf">the attached briefing note</a> to share our findings on how COVID-19 is impacting the financial inclusion industry, and to provide recommendations and guidance for senior leaders of financial service providers to protect their customers, employees, and business operations. The findings included in this document and resulting recommendations were based on interviews with our partners to understand how they are addressing this unprecedented global pandemic.

Responding to the pandemic: Guidance for financial service providers

This toolkit draws on the valuable learning gained through the Data Management and Analytics Capabilities (DMAC) program which was implemented from 2017 to 2019 in Zambia, Tanzania, and Sierra Leone. DMAC built the capacity of seven partner banks, insurance companies, and fintechs to use data more effectively across their entire businesses, including in the design of new financial products and improve existing products for their customers. DMAC was designed and funded by FSDA, IDRC, and FSDT and implemented by a consortium led by Oxford Policy Management.

With more data being created at a faster rate than ever before, it can be hard for FSPs to know what to do with the plethora of data available to them. FSPs are capturing large amounts of data on their internal systems and also have access to external data – as a result of improved connectivity and increasing smartphone penetration, as well as through publically available external data (e.g. national surveys). However, many FSPs are not making full use of this data as they may not understand its full potential, have information overload, inefficient processes, and systems, and think it is expensive to make use of data. The toolkit aims to help FSPs understand the different data sources available to them and how to use them effectively to transform their business.

Although primarily aimed at FSPs, the toolkit may also be of use and interest to those who provide services to FSPs in their respective markets (such as data management and research firms) and other organizations wanting to implement programs that encourage FSPs to make more and better use of data.

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Unleashing the power of data to transform your business

A practical and comprehensive tool designed to help service providers navigate the complex digital landscape. The framework outlines five critical stages of digital transformation, as well as the primary drivers and enablers that are needed to create a digitally-driven, scalable enterprise. This framework can be used by financial service providers as a diagnostic tool- to determine their status along the digitization continuum, to set a digital transformation vision, or as a reference for defining and prioritizing the organization’s many initiatives.

Digital Transformation Framework

Digital transformation should be a holistic approach that supersedes any one product, business function, or initiative. It is the catalyst through which the organization evolves into an insight-driven and agile enterprise that operates efficiently at scale. This checklist provides a clear and consistent tool for organizations for use in benchmarking, assessing the current state and planning a roadmap to guide the business' digital evolution. It will help organizations quickly identify their critical gaps and assess the organization’s current state of readiness for digital transformation.

Digital Transformation Checklist

Excel template helps financial institutions conduct a cost/benefit analysis of channels being planned. The purpose of this document is to help obtain board approval to proceed to the next step, to build a detailed business case and plan for piloting and implementation.

High level business case

This guide is for institutions interested in developing a supply chain finance solution. For those interested in better understanding how supply chain finance can help small merchants, fast moving consumer goods companies (FMCGs), suppliers, and financial service providers (FSPs) realize their economic potential, access our report, the  <a href="https://www.accion.org/the-supply-chain-finance-opportunity">Supply Chain Finance Opportunity.</a>
<h3>Executive Summary</h3>
Supply chain finance (SCF) is the use of financing mechanisms that can optimize the management of liquidity tied up in supply chain processes. SCF solutions have long been offered by big banks to large corporations, such as fast moving consumer goods (FMCG) companies and manufacturers, to support trade.

However, today SCF techniques are being transformed by technology, expanding the addressable market to include micro, small, and medium size enterprises. Improved connectivity, increasingly available customer data, and new technologies lower the cost and make it possible to extend digital SCF solutions to the small merchants at the end of global supply chains.

By tying credit to the flow of goods, SCF facilitates more efficient business operations and cash flow management for all actors along the chain – resulting in higher sales, faster turnover – and ultimately, increased profitability and growth.

A platform-based model that satisfies the interdependent needs of multiple stakeholders simultaneously using digital innovations is well suited to provide SCF solutions. Platform models consolidate digitized data produced by the flows of goods and money throughout the supply chain, building trust and facilitating coordinated decision-making. The net effect is to provide deeper insights into merchant and consumer behavior.

We believe independent third-party technology providers are best positioned to mediate between multiple stakeholders and take the lead in operating a flexible and scalable SCF solution. We also see a major opportunity, particularly for FSPs and FMCGs, to lay the groundwork for such a platform approach to succeed.  A digitized SCF solution will not only help merchants to grow their business but will drive meaningful financial inclusion for the millions left un- or underserved by the status quo. With nearly 141 million microenterprises in developing countries, digitized supply chain finance represents a scalable solution to drive greater sales through the supply chain, which will propel inclusive growth.

<img class="aligncenter" src="https://content.accion.org/wp-content/uploads/2018/09/Citi-Foundation.png" width="240" height="162" />

Accion would like to thank the Citi Foundation for supporting this report. The Citi Foundation works to promote economic progress and improve the lives of people in low-income communities around the world. The Citi Foundation invests in efforts that increase financial inclusion, catalyze job opportunities for youth, and reimagine approaches to building economically vibrant cities.

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How digitized supply chain finance can help small merchants grow

This course explores the importance of operational risk management for microfinance institutions and introduces a key decision-making tool for operational risk management, the detailed risk and control assessment tool.

eModule: Using the detailed risk and control assesment tool for operational risk management

This course introduces the key innovations in assessing willingness to pay, with practical tools and resources to help you identify what techniques may be right for your institution and plan for their implementation.

eModule: Innovations in assessing willingness to pay

This course explores short lessons and a case study to help financial service providers develop a targeted customer acquisition strategy.

eModule: Developing a targeted customer acquisition strategy

This toolkit is for analysis of the regulatory, technological, competitive, and collaborative opportunities, as well as demographic and cultural factors that will help drive the adoption of a financial institution's target channels.

Digital financial services toolkit: External analysis

This guide, Dialogue on Business, is an award-winning business skills training program that uses interactive games and role-playing to help participants solve real-life business challenges. Because the workshops are based on the real situations of participants, rather than textbook cases, Dialogue on Business is especially engaging for people with little formal education who may not learn effectively in a traditional classroom setting.

Dialogue on Business training program for entrepreneurs

How our advisory team helps financial service providers (FSPs) capitalize on the value of their data, leveraging technology and automation to transform their business processes and reach their target markets.

Global Advisory Solutions fact sheet

This toolkit aims to help microfinance institutions plan, pilot, roll-out, and operate digital delivery channels for financial services.

Digital financial services toolkit: Channels methodology

This template lays out the initial project planning phase and outlines objectives, budget, and roles and responsibilities, to ensure internal alignment and cross-departmental buy-in.

Digital financial services toolkit: Draft project charter

This toolkit helps financial institutions review the readiness of existing policies, technology, and business operations to support the channel methodology, outline required additions or changes to successfully launch the channel, and assess stakeholder buy-in and human resources capacity to support implementation and launch.

Digital financial services toolkit: Internal analysis

This toolkit facilitates assessment and diagnosis of existing digital channels and identifies how a proposed new channel will complement current offerings.

Digital financial services toolkit: Channel diagnosis framework

This template summarizes activities completed in the feasibility study phase of new digital financial system channel deployment or enhancement. This document can be used to present results and provide recommendations to senior management or the board.