Articles

Fintechs and Banks: An Unequal Partnership

Years ago I consulted with the legacy Wachovia Bank, headquartered in Winston Salem. Back then the bank-teamed credit and line bankers on each commercial loan, terming their working relationship an “equal partnership.” In fact, when you spoke with management offline, many admitted that the credit people were a bit more equal than line personnel.

Articles

Articles

Member News: Ashraf Sabry, CEO of Fawry, on creating a cashless society
To what extent have efforts to increase cashless transactions in Egypt been successful? ASHRAF SABRY : The measures have so far been successful, but it still takes time to become a completely cashless society. The country has advanced a lot in expanding what we call “silent business”, the ratio of people carrying cards in their wallets. But this...
Modelo Perú: What’s Next for the Groundbreaking Mobile Money Platform?
Modelo Perú, a first-of-its kind payments initiative in Peru, will mark its one year anniversary. The initiative established an interoperable nationwide payments platform, Bim, with a particular focus on expanding access to underserved customer segments. Thirty three institutions, including microfinance organizations, commercial banks, and telecos...
Gates Foundation Interview - What Banks Can Learn from the Frontline of Financial Inclusion
Imagine you’re a grocer in Tanzania. The sun sets, and you’re forced to close shop because you—like the majority of those in your country—have no electricity. Then a mobile money loan gives you access to a solar battery, which allows you to charge your phone while keeping the lights on in the evening. You pay for the power you need on a daily...
Mobile money, trade credit, and economic development
This new study of #M-PESA in Kenya finds that mobile money technology alleviates small firms’ financing constraints, leading to faster economic growth. By allowing easier access to larger amounts of trade credit, mobile money allows firms higher production, with important macroeconomic repercussions, according to this research by Thorsten Beck,...
Mobile wallets: The hidden commerce model
Most of the conversation around commerce and mobile wallets has been centered on the distribution of coupons and offers. Undoubtedly, coupons and offers will play a key role in the future development of mobile wallets. Distributing coupons and offers can be quite lucrative; Groupon, for example, boasts over $3 billion in revenues. Coupons and...
Digital Finance and the Future of Farming
Smallholder farmers face particularly difficult challenges, including extremely limited or a total absence of financial services. This lack of financing, paired with the low productivity that has historically affected the agriculture sector in many developing economies, creates an opportunity for innovation and the use of mobile technology to...
Digital Finance: The View from USAID
This week, the topic of financial inclusion will garner attention as the World Bank uses its spring meetings to lay out a roadmap toward universal financial access and releases new data via the Global Financial Inclusion Database . As USAID seeks to harness the power of science, technology, innovation and partnerships, we are increasingly focusing on digital finance as the critical pathway toward scaling meaningful financial inclusion. But what does that mean? What is our role in services primarily offered by banks and mobile network operators? Lawrence Camp notes that mobilizing private capital entails “using public funds to encourage investment that will result in private profit, but which will also have a development impact.” In many ways, this definition captures USAID’s approach to accelerating the growth of commercially sustainable digital payments systems. Donors — USAID included — will never be the providers of financial services. But we often have a critical role to play in setting the conditions so that the private sector can fill the void that has left more than 2 billion people globally without access to safe, affordable basic financial management tools and forces governments, businesses and individuals to transact in cash, which is expensive, dangerous, inefficient and enables corruption. This blog series will outline USAID’s contribution to meeting the audacious goal of universal financial access through the creation of enduring, inclusive market infrastructure.
An infrastructure approach to improving Financial Inclusion
While electronic payments have widely noted advantages over cash – improved security and accountability, lower transaction costs, greater speed and broader geographic reach – the limitations of electronic payment infrastructure put many of these benefits out of reach of underserved people in developing and emerging economies.The costs, risks and delays inherent in today’s infrastructure often limit electronic payment products to large-value transactions. In some regions, the cost of sending a cross-border payment may be so large that it is not economical or feasible for financial institutions to even offer low-value payment products. There are often significant cost and access barriers to sending a small-value remittance payment electronically today – precisely the type of payment poor communities use the most. For the benefits of electronic payments to fully reach the two billion people that lack financial services, new infrastructure that makes serving the poor more economical is essential. Read full article by Ryan Zagone and Danny Aranda from Ripple Labs, a technology company that develops real-time settlement solutions for financial institutions.
The ‘Ripple’ Effect: Why an Open Payments Infrastructure Matters
Payments are essential to the prosperity of the poor because they provide access to the global economy. Yet, moving money is one of the most underappreciated challenges facing financial inclusion today. Antiquated infrastructure lacks interoperability and involves multiple intermediaries to execute payments. This creates delays, costs and risks that prevent payment systems from adequately serving the world’s poorest.As the payment sector contemplates new infrastructure, lessons from open infrastructure approaches, such as those adopted for the formation of the Internet, give an indication of how to remove barriers in financial services and foster innovation and growth in payments.Read full blog on the CGAP site
MBA Grads' FinTech Ventures Pioneer Innovation In Financial Services
Financial technology companies founded by business school graduates are revolutionizing financial services and disrupting areas such as payments, money transfers and SME loans.The peer-to-peer lending industry was given a jolt of energy on a winter week in San Francisco earlier this year.Gearing up for a potential IPO, the head of one of the biggest companies in the financial technology – fintech – space secured $200 million in funding for its push further into the financial sector. Mike Cagney, chief executive of Social Finance (SoFi), hopes to shake-up the US lending market online. “This is the start of a fundamental shift in how people will shop for loans,” says Mike.The funding round would help the company to diversify from its roots in student loans and into other areas of P2P finance.