Kristin Moyer

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Kristin R. Moyer
Research Director
11 years at Gartner
18 years IT industry

Kristin Moyer is a research director in Industry Advisory Services/Banking and Investment Services. She has more than 17 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes card… Read Full Bio

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There are Plenty of Unbanked Initiatives, but are there any Real Success Stories?

by Kristin Moyer  |  July 28, 2010  |  Comments Off

The Financial Access Initiative (FAI) believes that 2.5 billion adults worldwide do not have access to formal financial products (such as savings accounts, insurance) with either a traditional (regulated bank or carrier) or alternative financial institution (such as a microfinance institution). Approximately 90% of the unbanked live in Asia, Africa, the Middle East and Latin America.

Financial institutions have struggled to provide financial services to the poor because of lack of credit history, lack of collateral, no proof of identification, lack of proximity to traditional financial services locations – and perhaps the biggest concern of all, profitability.

Despite these barriers, an ecosystem beyond microfinance institutions has begun to develop in many emerging markets. This ecosystem is comprised of financial institutions, retailers, mobile operators, airtime resellers, lottery branches, post offices and many others. But have any unbanked initiatives really been successful yet, or is a lot of money being spent without results?

It depends on the measurement you use for success – but in general, the answer is:  all of the above!

Many (perhaps even most) financial services providers are struggling to make their unbanked initiatives successful. However, there are at least five examples of unbanked initiatives that have produced positive results: Grameen Bank, ICICI Bank, M-PESA, GCash, Smart Money and Bolsa Familia Conta Facile.

Grameen Bank

Bangladesh

Repayment rate: 98.6% repayment rate

% of borrowers that have crossed the poverty line (according to Grameen Bank): 64%

M-PESA

Kenya

Mobile money

9 million wallets (~25% of the population!)

GCash

Philippines

Mobile money

1.2 million wallets

Smart Money

Philippines

Mobile money

9 million wallets (~10% of the population)

ICICI

India

Self-help groups

Cost effective operating model

Also partnering with MFIs

Bolsa Familia Conta Facile

Brazil

G2P

Caixa Economica migrating G2P recipients to conta facile (Visa debit card)

10 million accounts (~5% of the population)

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