ITU Workshop on
“Digital Financial Services and Financial Inclusion”
(Geneva, Switzerland, 4 December 2014)
Digital Financial Inclusion:
CGAP Initiatives on Demand, Supply,
and Enabling Environment
Kathryn Imboden
Advisory Consultant, CGAP
kathryn.imboden@gmail.com
Geneva, Switzerland, 4 December 2014
What is CGAP?
We Build Knowledge on issues such as customer
needs and business models
We Strengthen Markets so that promising
services can thrive
We Promote Policies and Regulations that allow
services to expand and reach unbanked populations
Geneva, Switzerland, 4 December 2014
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Four examples of CGAP initiatives
addressing digital financial inclusion
1. Robust provider ecosystems
2. Digital finance frontiers
3. Digital finance plus
4. Global policy architecture
Geneva, Switzerland, 4 December 2014
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Example 1. Robust Provider Ecosystems
1. Support for ensuring that basic
regulatory enablers are in place,
including rules governing:
E-money
Agents
Tiered KYC
Allowing multiple types of institutions to
deploy digital financial services
Consumer protection
Geneva, Switzerland, 4 December 2014
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Example 1. Robust Provider Ecosystems
2. Support for government policies and
practices that open up pathways to
support use of digital payments
services
3. Support for building provider
ecosystems able to scale low-cost
digital payments services
Geneva, Switzerland, 4 December 2014
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Robust Provider Ecosystems:
country-level work
Countries identified:
Ghana, Kenya, Rwanda, Tanzania, Uganda
Bangladesh, India, Myanmar, Pakistan
Examples of work in progress:
Ghana
Myanmar
Interoperability work
Geneva, Switzerland, 4 December 2014
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Example 2. Digital Finance Frontiers
Driving innovation in products
beyond payments, leveraging digital
channels to reduce barriers to usage;
expand the range of solutions
delivered to the poor
Digital payments platforms are
expanding around the world
= a low-cost channel for range of
services delivered through them
= bringing other opportunities to
innovate in kinds of services offered
Geneva, Switzerland, 4 December 2014
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Latent innovation potential can expand range of financial
solutions offered to poor and low income
Review of 119 startups and ongoing
deployments globally, leveraging
digital channels
3%
Transactional
device
8%
Digital channel attributes driving
inclusive offerings
Transactional
device
Enable frequent spontaneous
transactions and track
financial relationships across
family and social networks
Digital data
trail
Facilitate customer acquisition
and onboarding, design better
products, improve
assessment of risk
Digital data trail
14%
49%
Graphic User
Interface
Location
intelligence
26%
Real time
interactions
Graphic User
Interface
Instant
location
intelligence
Real time
interactions
Help customers relate more
intuitively to financial
services, improve their
understanding of services and
their choices
Contextualize delivery of
transactions, use information
to validate KYC profile, reduce
risks
Interact with customer at key
times, inform adequately,
create confidence and
proximity
Example 3. “Digital Finance Plus”
Use of digital finance to increase
accessibility to basic, essential services
and utilities more accessible
Finance as a means to help solve
significant development challenges
Identification of services that leverage
established infrastructure of mobile
payments
Public goods research
Research partnerships
Geneva, Switzerland, 4 December 2014
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Digital Finance Plus: Example
Pay-as-you-go utilities in East Africa
Leveraging digital finance to
deliver modern energy to the
poor, sold on a pay-as-you-go
basis
Designed to be flexible and to
fit well with the existing
economic realities of the
energy poor consumer
Research partnerships with
three pay-as-you-go solar
providers operating in East
Africa
(See www.cgap.org for video
Geneva, Switzerland, 4 December 2014
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Example 4. Global Policy Architecture:
Digital Financial Inclusion
Digital transactional platforms and additional
services they enable introduce new non-bank
actors and shift risks among the new entrants and
legacy players
Key financial regulatory issues: agents, anti-money
laundering and countering financing of terrorism
(or “AML/CFT”), e-money regulation, consumer
protection, payment system regulation,
competition (but non-financial issues as well, e.g.,
USSD channel access)
Combining financial & non-financial services calls
for collaboration with non-financial regulators and
standard setters (e.g., telco ministries & ITU)
Geneva, Switzerland, 4 December 2014
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Global Policy Architecture: Digital
Financial Inclusion
2nd G20 Global Partnership for Financial Inclusion
(GPFI) Conference, Oct. 30 & 31: “Standard Setting in
the Changing Landscape of Digital Financial Inclusion,”
hosted by Bank for International Settlements (BIS) in
Basel:
“In the financial inclusion context, the standard-setting
bodies . . . need to work together. But when it comes to
digital financial inclusion, those represented in this room
alone are not likely to cover all of the relevant
landscape. In December, for example, the International
Telecommunications Union will launch a new Focus
Group on Digital Financial Services, and other
collaborative forums are likely to emerge.”
Geneva, Switzerland, 4 December 2014
- Jaime Caruana, BIS Gen. Manager 12
2014 CGAP Publications on DFS
CGAP blog: “The Seismic Implications of Digital
Financial Inclusion [for Standard Setters]”
CGAP Brief: “bKash Bangladesh: A Fast Start for
Mobile Financial Services”
CGAP blog: “5 Sources of Untapped Innovation in
Digital Finance”
CGAP Focus Note: “Electronic G2P Payments:
Evidence from Four Lower-Income Countries”
CGAP paper: “Access to Energy via Digital Finance:
Models for Innovation”
CGAP Focus Note: “Serving Smallholder Farmers:
Recent Developments in Digital Finance
Geneva, Switzerland, 4 December 2014
See www.cgap.org
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