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29 January 2019 Submitted by John BaRoss (not verified)
A couple of recent examples may serve to illustrate Greta Bull’s timely reminder of sustaining financial inclusion’s focus on the poor:
1) Did many notice the change with the April 2018 triennial World Bank Global Findex report? Three years earlier World Bank President Jim Yong Kim announced remarkable progress advancing financial inclusion during 2012 to 2014 via a March 2015 announcement that heralded 800M financially included, plunging the remaining global unbanked adults to 2.0B. However, lower level leadership announced the most recent triennial’s results for the 2015-2017 interval (when efforts to advance financial inclusion by banks, tech firms, telcos and governments were at their greatest levels). The 2018 triennial report’s focus shifted to aggregate progress over 3 triennial report periods (~1.1B financially included over 9 years), with attention now centered on percent financially included (69%). Dig a little deeper into the April 2018 triennial report to learn that the global unbanked only declined to 1.7B from 2015-2017. That represents a decline in advancing financial inclusion of over 62% versus 2012-2014, plus there is a growing gap between financially included vs. those that use their accounts (only 55%).
2) As Greta Bull noted, Payment Banks in India have underperformed thus far. The premise of the RBI’s pioneering Payment Bank idea was to advance financial inclusion. Essentially Payments Banks remain an experiment, thus guidelines and restrictions are part of that experiment. Four of the eleven provisionally approved Payment Bank applicants quit before even starting when they realized the RBI’s ‘experimental’ restrictions made financial viability impossible. As Greta also pointed out: ‘Regulators are crucial’. Thus far there has been no indication that the RBI has processes or will to ingest marketplace feedback on the experimental Payment Bank model, and make adjustments (assuming advancing financial inclusion is the true goal). Nigeria’s CBN embarked on Payment Services Banks in 4Q2018 with guidelines and restrictions that appear similar to the RBI’s on Payment Banks.
A couple of recent examples may serve to illustrate Greta Bull’s timely reminder of sustaining financial inclusion’s focus on the poor:
1) Did many notice the change with the April 2018 triennial World Bank Global Findex report? Three years earlier World Bank President Jim Yong Kim announced remarkable progress advancing financial inclusion during 2012 to 2014 via a March 2015 announcement that heralded 800M financially included, plunging the remaining global unbanked adults to 2.0B. However, lower level leadership announced the most recent triennial’s results for the 2015-2017 interval (when efforts to advance financial inclusion by banks, tech firms, telcos and governments were at their greatest levels). The 2018 triennial report’s focus shifted to aggregate progress over 3 triennial report periods (~1.1B financially included over 9 years), with attention now centered on percent financially included (69%). Dig a little deeper into the April 2018 triennial report to learn that the global unbanked only declined to 1.7B from 2015-2017. That represents a decline in advancing financial inclusion of over 62% versus 2012-2014, plus there is a growing gap between financially included vs. those that use their accounts (only 55%).
2) As Greta Bull noted, Payment Banks in India have underperformed thus far. The premise of the RBI’s pioneering Payment Bank idea was to advance financial inclusion. Essentially Payments Banks remain an experiment, thus guidelines and restrictions are part of that experiment. Four of the eleven provisionally approved Payment Bank applicants quit before even starting when they realized the RBI’s ‘experimental’ restrictions made financial viability impossible. As Greta also pointed out: ‘Regulators are crucial’. Thus far there has been no indication that the RBI has processes or will to ingest marketplace feedback on the experimental Payment Bank model, and make adjustments (assuming advancing financial inclusion is the true goal). Nigeria’s CBN embarked on Payment Services Banks in 4Q2018 with guidelines and restrictions that appear similar to the RBI’s on Payment Banks.