ITU Workshop on
“Digital Financial Services and Financial Inclusion”
(Geneva, Switzerland, 4 December 2014)
Going cash lite
… building supply and demand
Till Bruett,
Programme Manager, UN Capital Development Fund,
mm4p@uncdf.org
UNCDF’s focus: financing for development
2 KEY AREAS OF WORK
Local Development Finance
Focus on public finance and decentralization
Inclusive Finance
Focus on access to financial services for individuals and
small enterprises
COMMON THREADS
Goal: inclusive and sustainable growth
Approach: piloting leading to national reforms/scalability
Tools: capital investment + technical assistance
Geneva, Switzerland, 4 December 2014
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Local Development Finance: where we work
We help governments by:
1. Fostering decentralization and local governments capacity to
provide services
We pilot and scale up sub-national planning systems
We pilot and scale up Public Finance Management systems
2. Leveraging local governments capacity to meet specific
development challenges
climate change resilience;
food security;
social protection;
gender equality;
local economic development;
Geneva, Switzerland, 4 December 2014
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Local Development Finance: where we work
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Inclusive Finance: where we work
We bring the financial sector to the poor by:
(1) Building inclusive financial sectors
We
We
We
We
support policy makers and regulators
finance and incentive financial service providers
build support services for microfinance
promote financial literacy and consumer protection
(2) Testing innovative approaches globally
Bring market leaders to LDCs (MicroLead)
Enable youth access to financial services (YouthStart)
Lifting the poor out of energy poverty (CleanStart)
Spreading technology-based banking in LDCs (Mobile Money for the
Poor)
Innovations in Remittances and Micro-insurance
Empowering people through electronic payments (Better than Cash)
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Inclusive Finance: where we work
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Mobile Money for the Poor
Started through a joint UNCDF-UNDP-EU-AusAid Pacific
Financial Inclusion Programme
Developed to build digital finance ecosystems that can
serve all citizens, including rural and women in LDCs
Started March, 2012, Based in Brussels, Belgium
Programs in Uganda, Malawi, Liberia, Lao and Nepal –
entering Benin, Senegal, Zambia
Coordinating with other global funders (IFC, World Bank,
DFID, GSMA, etc.)
Geneva, Switzerland, 4 December 2014
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DF Stages of Development
Inception
Start-Up
Expansion
Consolidation
•Lack of policy framework
•Expanding and increasingly affordable
mobile voice services
•Fragemented payment system
•Interested but uncertain MNOs and banks
•Large, decentralized airtime distribution
networks
•Small bank merchant networks
•Few products from formal sector for low
income
•Technology used mostly for "additivie"
value
•< 1% of adult population using DFS
•Basic guidelines, permitting agent banking
and e-money
•competitive mobile voice and expanding
mobile data services
•Bi-lateral or mutliatal agreements for
retail payment
•MNOs and/or banks launch services
•Providers developing, managing own
networks
•Airtime, cash-in, cash-out, billpay primary
services
•High customer awareneess and
registration, but low experience and use
•1-5% of adult population using DFS
•Clear guidelines on key regulatory areas
•Multliateral payments systems
interconnectiion
•Mostly reliable electronic infrastructure,
low down times
•Several players of different types
competing in DFS , and a few at breakeven
•Agent networks partially outsources,
faster growth
•Multiple products offered, including links
between MNOs and FSPs and aggregators
enter market
•High customer understanding, moderate
and increasing usage
•5-35% of adult population using DFS
•Well regulated market with consumer
protections, move toward standardization
of fees
•National payments systems for retail
clearing
•Very reliable electronic infrastructure,
multiple technologies
•Groth in consortiums and third parties
among providers
•Payment aggregators foster DFS merchant
use
•Agent networks largely outsourced
•New businesses services relying on DFS
arise
•Clients have high appreciation, and
reliance on DFS
•>35% of population using DFS
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Theory of Change
Expansion to Consolidation
Start-up to Expansion
DFS providers compete aggressively for
clients
Inception to Start-up
Regulator permits bank or non-bank DFS
with agents to launch
Specific laws / regulations for DFS
enacted, KYC adapted to DFS
Regulator has guidelines specific for DFS
>140 active agents per 100,000 adults
Several transformative services launched,
competing
Advanced financial services availalbe
(credit, insurance, savings)
>20 active agents per 100,000 adults
>35% active users / adult population
A "transformative" DFS launched
Simple financial services available (loan
repayments/disbursements , bank - wallet
link)
Non-bank agents activated
> 5% of active users / adult population
Basic services available (wallets, bill
payments, air time, cash in/cash out)
> 1% active users / adult population
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Translating Analysis into Work
Analysis Framework
Policy
Regulation
Customer
Work Stream
Infrastructure
Providers
Awareness
Regulation
Ecosystem
Development
Ecosystem
High Volume
Agents
Customers
Providers
High Volume
Supervision
Distribution
Geneva, Switzerland, 4 December 2014
Product
Strategy and
Capacity
Payment
Systems
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Customer at the Center
Where does
policy and
regulation
most?
Reliable
Network functions,
agents have cash
Appropriate
Terms and conditions
realistic
Competes with cash
Accessible
Appealing
KYC reasonable, agent
nearby
Available
Regulation permits
product, providers can
offer
Geneva, Switzerland, 4 December 2014
Addresses a real need
Easy customer interface,
right marketing
Customer
Affordable
Priced for mass market
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Making the Shift to
Electronic Payments
December 2014
The Better Than Cash Alliance
is a global alliance of
governments, the private sector,
and the development community
committed to shifting payments
from cash to electronic.
www.BetterThanCash.org
What Is the Problem?
Cash Is
Expensive
Inefficient
Unsecure
Untraceable
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We believe
that
electronic
payments
are a part of
the solution
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Why Shift to Electronic Payments?
Cost Savings
Transparency
Security
Decrease
costs of inkind
payments.
Increase
accountabil
ity and
tracking,
reducing
corruptio
n and
theft.
Typically
safer and
have
faster
delivery.
Financial
Inclusion
New Market
Access
Can
accelerate
access to
and use of
financial
services.
Open
doors for
new
business
models for
previously
excluded
people and
create
additional
benefits.
The Payments Shift Grid
Payer
Payee
Government
Private Sector / Business
Individual / Person
Government
G2G
Budget allocation
Funding programs
G2B
Grants, payment for
goods and services
G2P
Salaries, pensions
Social protection
Private Sector /
Business
B2G
Taxes, fees, permits
B2B
Payment for goods and
services in value chain
B2P
Salaries, Benefits
Development
Organization
D2G
Taxes
D2B
Payment of goods and
services
D2P
Salaries, benefits
Cash transfers
Individual / Person
P2G
Taxes
P2B
Purchases
P2P
Remittances, gifts
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Challenges to Making the Shift
Lack of political will due to resistance
from vested interests and inadequate
coordination
Absence of a robust, reliable, and
interoperable infrastructure due to
perceived zero-sum game
Regulatory barriers to innovation and
e-payments due to cross-sector areas
affected
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What the Better Than Cash Alliance Does
Advocates for payers to commit to transition the
distribution of government benefits, humanitarian
aid, and payroll and supplier payments from cash to
electronic
Provides the policy, technical, and financial
assistance needed to identify and implement the
most effective approach for local market conditions
Develops cutting-edge research products, good
practices, and case studies in order to make the shift
in country markets and achieve scale globally
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Committing Members
•
•
Governments: 9
committed, 12 in
pipeline.
Private sector: One
committed, many
others in pipeline.
•
Multi- and bi-lateral
organizations: 3
committed, 4 in
pipeline.
•
Nongovernmental
organizations: 10
committed, plus others
in the pipeline.
Geneva, Switzerland, 4 December 2014
Afghanistan Colombia
Peru
Kenya
Philippines
AND MANY OTHERS!
Malawi
Rwand
a
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Technical Assistance Facility
TAF projects: Peer learning between governments (audit,
tax, budget, etc.); regional African Finance Ministries
meeting; diagnostic and implementation grants.
Ecosystem partnership development: Drawing on
neutrality of being based at UN and UNCDF remit to also
work with private sector, focus on convening and
connecting at the country level.
Geneva, Switzerland, 4 December 2014
Delegates from the Philippines with hosts from Kenya
during a Peer Learning Exchange in August 2013
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Knowledge Generation
White Paper, Diagnostics and Case Studies
The Journey Toward ‘Cash Lite’
Country Diagnostics (Philippines, Colombia, Nigeria, Malawi)
G2P Digital Payment Case Studies (Kenya, Haiti, Uganda, Philippines)
Government Shift Case Study (Mexico)
Stakeholder Case Series (Colombia, Nigeria, Philippines)
Technical Toolkits
Ecosystem measurement
Ecosystem diagnostics
Stakeholder Toolkits
Government
Business
Development Organizations
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Joining the Better Than Cash Alliance
What do you get?
1.
Recognized for
leadership.
2.
Invited to participate
in events and learning
opportunities.
3.
Given access to the
latest evidence and
case studies.
4.
Eligible for technical
assistance and/or
funding.
How can you join?
•
•
•
•
Learn more from
BTCA team
Identify
opportunities (cash
payments) to shift
Make a commitment
to shift cash payments
to electronic
Start or advance the
shift
info@betterthancash.org
www.BetterThanCash.org
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