Disseminating knowledge to aid sectoral growth has always been a critical aspect of our work. In the year 2015, we continued to accentuate our efforts to reach out to the readers with best of our research work, our evaluation of industry developments and published over 31 blogs. Here are our top viewed blogs:

Over the Counter (OTC) in Pakistan: Why It Works

A customer walks into a shop and tells the retailer … I would like to send money to [another city] …”.  The discussion continues until, after verifying the customers original CNIC (Computerized National Identity Card) to meet KYC/AML requirements, the shopkeeper transfers money from his account. Once this is done, and the customer has confirmed that the recipient has indeed receive the money, the customer hands him both the money transferred and the commission payable. An over the counter (OTC) mobile money transaction has been completed, without the customer touching his own mobile phone. This blog examines the factors that are responsible for the success of OTC transactions in Pakistan.

Two More Revolutions Underway in Kenya

The blog highlights the developments in the digital financial services space in Kenya and also examines how the mobile money market is evolving in the country. The key points highlighted are-

1. Kenya is showing the beginnings of mobile enabled financial inclusion through two different models – one through a bank-MNO partnership, the other through a bank running an MVNO.

2. There is a growing focus on small-scale, consumer loans, not only from banks, but also from non-bank finance companies such as afb, many of which have their roots in payroll lending. But as more ambitious lenders with higher risk tolerance come into the market, it is fair to anticipate that it will be easy for people to get multiple larger loans via their mobile money accounts … and the results could be disastrous.

3. Savings are still very much an after thought. Relatively few people save on M-Shwari – the average balance, according to Cook and  McKay was USD $5.56 for all accounts, and $10.06 for those active in the past 90 days.

So Many Steps Forward … And Now One Big Step Back …

After the extraordinary progress made in the last nine months on setting a regulatory and policy framework to enable and encourage financial inclusion, January 16th 2015, Office Memorandum (OM) from the Department of Expenditure of the Ministry of Finance seems to be a setback for the ambitious PMJDY scheme.

The January 16th 2015, Office Memorandum (OM) fixes commission for banks distributing direct benefit transfers (DBT), including those for LPG – liquid petroleum gas. The OM states that for urban schemes like DBTL (the LPG subsidy), the transaction cost may be paid at the NEFT rate or the APB rate as per the extant RBI or NCPI circulars. For rural schemes “like pensions, NREGA, pre-matric scholarship, maternity benefits etc., where a large number of transactions are likely to be through the Business Correspondents the transaction charges may be paid @ 1% subject to an upper limit of Rs.10 per transaction”. The conservative commission announcement seems to reflect a Government mind-set that it is an expense and not an inevitable investment for the success of PMJDY and the expected social and financial returns. The blog states how the OM will impact the progression of PMJDY.

Small Finance Banks – Are You Ready? The Opportunities and Challenges

The blog discusses the advent of Small Finance Banks in India and how they will predictably alter the financial inclusion in India. Small Finance Banks reiterate the Reserve Bank of India’s commitment to achieve financial inclusion by supporting the development of institutions that offer innovative ‘high technology, low-cost operations’ driven financial services.

It is indeed an interesting time to be in the financial inclusion market in India. The performance of the Small Finance Banks in the next five years will, in a way, determine the path that the microfinance sector will take. At the same time, the Indian microfinance market has enough to offer to those MFIs who missed the opportunity this time around – particularly in the short-term. MicroSave speculates that many of the transforming MFIs may even have to “down-scale their lending portfolios” as part of their efforts to transform. This could give SKS, Satin and many mid-size NBFC-MFIs that made a conscious choice not to apply for licenses, the opportunity to significantly expand their portfolios and geographical reach.

At MicroSave, we are happy to have provided technical assistance support to eight out of the ten institutions that received the SFB license.

Designing an Effective User Interface for USSD: Part1

Suraj is an illiterate migrant from Muzzafarpur (Bihar) who works at a construction site in Delhi. He has recently opened a mobile wallet with a leading mobile network operator (MNO) in India. When we met him, his primary concern was – How would I use my (mobile money) account, when I don’t even know where to find the required service?”

Users like Suraj represent the target customer group for mobile wallet service providers. One of the common attributes of this user group is the inability to use mobile money services on their own. This necessitates mediation from a family member or an agent to conduct a transaction. The most quoted reason for facilitation is the difficulty faced in “locating” various service offerings.

The blog examines how user interface (UI) plays a vital role in facilitating usability and enhancing user experience. Globally, mobile money service providers offer different access channels such as mobile application, internet, unstructured supplementary service data (USSD), interactive voice response (IVR) and SIM toolkit (STK). MicroSave came up with a comparative analysis of some of the commonly used access channels, please read the blog for details.


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