Global and national-level policy makers have been embracing financial inclusion as an important development priority. The G20 made the topic one of its pillars at the 2009 Pittsburgh Summit. By fall 2013, more than 50 national-level policy-making and regulatory bodies had publicly committed to financial inclusion strategies for their countries.
This blog discusses how in emerging markets, especially in the Middle East, ubiquitous access to software in the hands of new generations of entrepreneurs and innovators is changing societies from the bottom up. For over a year, the author travelled across the Arab world writing a book about the remarkable, under-reported and quieter tech-enabled revolutions happening against the backdrop of political uncertainty.
Very interested to learn of this relatively young firm, not tied to any electronic payments provider but focused on building up the best agent networks possible by - unusually - focusing on the agents and making the business worth their while. As the founders note, "It is well understood that agents are the most important part of any mobile financial services deployment. Efficient and well-managed Agents help create a very positive experience of all mobile financial services. BeyondBranches works with Agent Network Operators to help standardize processes and deploy the BeyondBranches Duka Platform into the market and in some instances build its own "tier 1" agent network." well understood, perhaps --- but don't see many doing enough about it! nice to see someone focused on the agents as businesses themselves - SMEs, for 99.99 percent of them - and developing products and programs to make all this make sense for the agents...moreover, among the services Beyond Branches is helping deliver are a suite of small business services to help the agents run their businesses better. for more, see the link. would like to hear from our Nigerian members who have run across this service...matt
The Reserve Bank of India's Committee on Comprehensive Financial Services for Small Businesses and Low Income Households and its report are part of an explicit and dedicated effort to expand the ambit of financial services from partial to full inclusion of small businesses and low-income households in India. The report, with its visionary and reformative recommendations, aims at significantly and fundamentally overhauling the entire banking industry in India. This blog critiques the Committee's approach with respect to enhancing access to financial services for small businesses in India.
interesting article in this weeks Financial News by Edward Russell Walling (unfortunately only available by subscription) about the proliferation of covered bonds to inject life into the frustratingly sluggish European SME lending market. this new asset class may suit this situation well, in which cross-country regulatory differences, weaknesses in securitisation laws, and wariness about old style securitisation may make these vehicles useful The loans stay within the bank, giving investors dual recourse to both the bank borrowing from them and to the assets in the loanbooks. Commerzbank was first with a euro 500 million issue early in 2013, but the markets been quiet since. however, I heard new proposals from the French at the G20 Riyadh conference in March, and the Spanish and Italians also have plans, according to this article. welcome contributions from our readers with more direct knowledge of the situation! matt
Many decisions present trade-offs. One or the other. Some good elements with some bad. It is rare when a situation can be win-win, or better yet: win-win-win-win. However, this is the situation for digitized cash today. This post will show how governments, banks, merchants and, most importantly, consumers all win with digitized cash.
The Asian Development Bank (ADB) published two books on SME finance recently; the Asia SME Finance Monitor and the joint study report with the OECD. The former reviews various country aspects of SME finance covering the banking sector, nonbank sector, and capital markets, aiming to support evidence-based policy making on SME finance in Asia and the Pacific. The latter takes a comparative look at ADB and OECD experiences of SME finance, aiming to identify promising policy solutions for creating an SME base that is resilient to crisis, from a viewpoint of access to finance. Both books addressed that poor access to finance limits the ability of SMEs to survive and grow and that limitations of bank lending require diversified SME financing models.
In Asia where bank-centered financial systems have been established, SMEs strongly depend on debt instruments. Accordingly, SME finance policies focus on bankability in many Asian countries, typically through developing public credit guarantee schemes. SME bankability is an important area to be continuously supported by the government, but we need to recognize two facts. First, SME loans make up still less than 30 percent of total bank lending on average in Asia and the Pacific despite many national measures provided to improve SME access to bank credit. Second, unexpected events like a financial crisis discourage banks to lend SMEs in order to mitigate credit risk and to survive such events. This suggests that the prudential requirement to ensure stable banking systems does not allow banks to easily expand lending to SMEs and that SMEs need to be able to access finance beyond conventional bank credit to grow further.
Economic expansion in Asia has created a foundation of growth-oriented SMEs with a need for access to long-term growth capital, in which the development of capital markets for SMEs has become a new challenge in SME finance. Economic integration in Asia, i.e., the ASEAN Economic Community in 2015, has also brought new financing demands from SMEs, such as funding in offshore currencies, provided that they are exposed to further liberalized trade and investment and that their internationalization is encouraged. Supply chain finance or value chain finance plays a critical role for vitalizing SME businesses in global markets and for enhancing the national and regional labor productivity.
Under this rapidly changing environment, SMEs need to develop their business model with innovation to survive, and national policy makers need to prepare a comprehensive suite of policy options that support innovative and diversified financing models appropriately serving the financing needs of SMEs at different business stages.
UT Bank Ghana has a 6 percent share of the Ghanaian market and is known for its expertise in lending to SMEs. Pearl Esua-Mensah, UT's Managing Director, spoke with the Global Banking Alliance for Women about the bank's decision to join the Alliance, its hopes for the planned Women's Market Program, and the role the bank can play in supporting women.
This post discusses how the status quo in today's payments space needs to change. According to the author, we need to recalibrate our expectations for consumer finance within the context of the digital age.
Along with the rise in investors seeking social investments, there has been a corresponding rise in social stock exchanges - places where people can buy shares in social businesses with missions that align with theirs. In fact, several countries have already launched their own versions of the concept. While the countries currently introducing social stock exchanges don’t necessarily use the same definition of social enterprise when selecting companies, the common denominator among the trading platforms is that they have earned a place on the global leader board for their efforts in mobilizing private capital for public good.
