Branching Out: Financial Inclusion at the Margins

1.7 billion people have no access to basic financial services, most of them in developing countries. Strong evidence shows that building financial inclusion is a crucial enabler for reducing poverty, increasing resilience, and achieving the United Nations’ Sustainable Development Goals. As a leading financial services centre with an increasingly effective aid programme, Jersey can play a key role in sustainably transforming hundreds of thousands of lives with its expertise, philanthropy and investment in this field.

Jersey Overseas Aid and Comic Relief have come together to help strengthen financial systems and improve access to financial services for individuals left behind. The four-year partnership will provide strategically-targeted grants to organisations tackling the lack of access to financial services in Sierra Leone, Zambia and Rwanda. The £8 million programme has three key components:

  • Increasing bottom-of-the-pyramid access to financial services such as loans, savings, money-transfers and insurance.
  • Transferring knowledge to build responsible and inclusive financial systems which help move people out of poverty, protect their gains and advance economic development.
  • Incubating Financial Technology (FinTech) and Digital Financial Services (DFS) to increase access to basic financial services and promote private-sector growth

Frontline Grants

RWANDA                                                                                                   

United Nations Capital Development Fund (UNCDF)                                                     

UNCDF will pilot utilising digital financial services to enable the transfer of humanitarian aid and credit, savings, and payment services to forcibly displaced persons (FDPs) and their surrounding host communities. 15,000 refugees in in Gihembe and Nyabiheke Camps will benefit immediately, but this pioneering project can contribute towards improving the lives of refugees worldwide.

ZAMBIA

United Nations Capital Development Fund (UNCDF)                                                     

UNCDF will address a number of key, complementary areas that are part of their market systems approach to Financial Inclusion. Activities include developing liquidity management solutions for agent banking networks, improving DFS products by combining iterative testing, behavioural science and technology, and organising hackathons, design sprints and other idea-generating activities to identify the most promising partners and ideas which can be incubated and scaled up. At least 100,000 people will directly benefit, half of them women and 40% of them youth.

FSD Zambia                                                                                                                                                                       

FSD Zambia will work with Traditional Chiefs to use their influence and power to improve the availability, understanding and access of formal and informal financial services. The project will also address the mismatch between supply and demand of formal financial services, examining how the needs of poor clients can be better met. Its direct beneficiaries will be 300,000 smallholder farmers, rural households and micro-entrepreneurs.

FINCA Zambia                                                                                                                                              

Jersey and Comic Relief are supporting FINCA, a Microfinance Institution, to expand its agent banking network to at least 800 locations, as well as digitising its service offering and providing meaningful financial education to its customers. This new business model is projected to reaach at least 385,000 (and perhaps as many as 1.3 million) unique low-income customers in 4 years.

SIERRA LEONE                                                                  

Cordaid                                                                                                                                                             

Cordaid’s work will involve getting poor people onto the first rung of the ladder through awareness-building and financial literacy education, improving the quality and range of products available to them, and graduating more advanced poor clients to more formal financial services. Working with Microfinance Institutions, Community Banks and Mobile Network Operators, the project will reach at least 100,000 people.

Capacity Building and Technical Assistance

RWANDA        

United Nations Capital Development Fund (UNCDF)      

UNCDF will bring together cohorts of existing FinTechs, Mobile Operators and Regulators to support the Rwandan startup ecosystem. The better, more enabling regulatory frameworks that result from this dialogue will then be stress tested with live use cases of new FinTech and DFS products.

Accion 

The programme will introduce a new framework with the National Bank of Rwanda to protect consumers of Digital Financial Services. It will engage with financial service providers, develop the capacity of regulators and supervisors, and educate consumers to build trust in DFS.

ZAMBIA          

United Nations Capital Development Fund (UNCDF)                                                                    

This project will bring together FinTech companies and Zambian Regulators to co-create a more enabling environment for financial sector innovation.

Toronto Leadership Centre                                                                                                                                        

This project targets the Bank of Zambia, the Pensions and Insurance Authority, and Zambia’s Securities and Exchange Commission to move the three Regulators towards a risk-based rather than a compliance-based supervision model.

Incubating FinTech and DFS

This programme component will seek to incubate and accelerate FinTech products, start-ups or early stage social enterprises that are using technology or innovative ideas to make financial services accessible, responsible and sustainable. The first Grants will be made in late 2019.

 

Financial inclusion

Financial inclusion and access to financial services facilitates day-to-day living and prosperity. It helps people, families, communities and their businesses to engage in the economy and plan for everything from long-term development goals to unexpected emergencies. People can use financial services, such as a basic bank accounts, credit and insurance, to start and expand businesses, invest in education or health, manage risk and weather financial and political shocks, which can improve the overall quality of their lives. Research also shows that more inclusive financial markets are directly linked with economic growth and employment and a financial market that reaches everyone is increasingly recognised as allowing for more effective execution of other social policies and development priorities.

The World Bank have set the target of achieving universal financial access by 2020 and Financial inclusion has been identified as an enabler of many of the 17 Sustainable Development Goals (SDGs), including eliminating extreme poverty (Goal 1), tackling hunger (Goal 2), creating jobs (Goal 8) and improving health (Goal 3) and gender equality (Goal 5).

Our focus on financial inclusion however, is to target and support those at the margins that have been left behind and are unable to avail of existing financial products and services.

 

Contact

For more information or any questions please contact Richard Loat, Programme Manager – Branching Out: Financial Inclusion at the Margins

E: r.loat@comicrelief.com