The population of the DRC is extremely dispersed in a country with low levels of education, a history of financial shocks, conflict and poor infrastructure. A recent study has shown that, even excluding the population in deep rural areas, only 2.3 million (12%) of the adult population have a bank account [1] . Despite these challenges, the number of mobile money subscribers has increased significantly over the last decade, from 4.9 million in 2007 to 29.3 million in 2017, an average annual growth rate of 20 %, with a single subscriber penetration rate, which went from 8.2% to 35.5% over the same period [2]. This offers strong arguments for mobile money, given the potentially large user base for the country’s total population of about 77.2 million. Nearly 40% of people own a mobile phone [3] while only one in 100 000 has access to a bank or an ATM (ABM) [4] .
Payments and remittances are essential for individuals to manage risk and consume regularly. Agents play a central role in acquiring and managing clients, but they need to be properly trained and paid. With additional investments, made in a long-term perspective, and effective support of agents in carrying out their activities, better access to affordable and relevant financial services is likely to facilitate the growth of businesses and businesses. personal savings, which will help increase the income of the target population.
Twenty years ago, we were born in the heart of Africa in Uganda as the MicroSave project. The year was 1998. The microfinance industry at the time was focused almost exclusively on microcredit, and as the name suggests, MicroSave came into being to resolve this issue.
As a first step, we drew influences from Stuart Rutherford, as well as approaches developed in the Philippines. We conducted market research with the aim to understand opportunities and problems from the customers’ perspective. This marked the start of our signature “market-led approach” to consulting, and unmasked significant problems underlying the microcredit model then prevalent in Uganda—that we set about fixing.
Until the year 2000, MicroSave focused on demand-side market research in East and Southern Africa. We trained hundreds of people from across the globe in our Market Research for MicroFinance (MR4MF) approach—a precursor to what is now known as human-centered design. After the first mid-term review, our work evolved to include both demand- and supply-sides. We worked with industry leaders to develop toolkits and training content on 35 different aspects of managing MFIs and banks.
We worked with nearly 20 leading financial service providers in East and Southern Africa to refocus their business towards a customer-centric or “market-led” approach. We helped Equity Building Society grow from 109,000 customers in Kenya into Equity Bank. The bank was listed on the stock exchange and currently serves 12 million customers across East Africa. Building on our growing work on digital finance, we also sat on Equity’s steering committee and helped with the initial testing of M-Pesa.
In 2006, the next big spurt in our growth arrived when we brought our lessons and success from Africa to India. In the next two years, we had expanded to Sri Lanka, Bangladesh, the Philippines, Indonesia, and Nepal. We added country after country to our list. We widened the scope of our cutting-edge knowledge and advice to a diverse set of players. In the years to follow, we opened new sectors and services to include digital financial services, finance for energy, housing, water and sanitation, among others—all with a focus on low-income people.
From 2013, MicroSave started shaping digital inclusion, government to person (G2P) payments and social inclusion landscape in India. We started by preparing an approach to assess the readiness of districts for delivering G2P payments. This helped the government in prioritizing the launch of G2P programs. We worked on the rural employment guarantee program (MGNREGA), social pension programs, LPG subsidy, food subsidy, kerosene subsidy, fertilizer subsidy, among others.
Our work over the years benefits about 850 million people, with an annual subsidy outflow of about USD 71 billion. We also worked on the largest financial inclusion program in the world—PMJDY—and worked on the harmonization of the know-your-customer (KYC) process to enhance financial inclusion. Through this, we gained expertise in public policy design, digital identity, digital technologies, pilot testing of social programs, and KYC.
In 2016, we took these learnings to Indonesia. We helped in the pilot of a new cash-based subsidy program called Bantuan Pangan Non Tunai (BPNT). We are now assisting the expansion of this program. We have also been helping conduct a pilot to leverage the digital identity system (NIK) in Indonesia for e-KYC to enhance the pace of financial inclusion.
Today, we still pride ourselves on our authentic insights led by a thorough understanding of the socio-cultural and business contexts of our markets. However, we are no longer the niche research firm that started out many years ago in a small shared office in Uganda. We have grown into an organization that finds wide recognition in the international development community. The MicroSave name has come to represent the vast wealth of knowledge we have amassed on the lives of low-income people. Now it is time to pause, reflect on the journey across two decades, and step up our game, as a lot remains to be done.
The world of development that we inhabit has been in a state of constant change. MicroSave needs to be better prepared in this ever-changing environment. Our horizons have widened, and it is time we set our sights higher. There is a need for stronger and more consistent branding, especially when the teams are expanding across locations. It is time to relook at our identity. The new identity would leverage the time-tested MicroSave name, yet we must showcase our formidable expertise that we continue to garner in the development sector.
Enter MicroSave’s new avatar—MSC—or MicroSave Consulting. We explored a number of options but MSC was the natural choice, forging a deep connect with our staff. The MSC brand lets us retain our legacy while providing a wider canvas for us to connect with a more diverse base. We prefer to use the acronym form—MSC over MicroSave Consulting as it promises instant recall.
Our transformation into MSC kick-starts various other changes—our brand colors, design principles, and our language guidelines. The new color swatches reflect quality delivery, an empathetic mindset, creativity, and a deep desire to realize our mission.
With these changes, MSC aims to reach multiple milestones. We would consolidate our identity as a young, multi-directional, multi-sectorial consulting company. We would like to take the concept of “market-led” to all aspects of the lives of low-income people. Our work now focuses on education, health, livelihoods, climate change, water, sanitation, energy, gender, youth, and refugees, among others.
The new identity reflects our emergence as an avant-garde consulting partner that offers divergent thinking, passion, diverse expertise, and insights from different cultures. As a result, we will reinforce our identity as “the world’s local expert in financial inclusion”. We seek your continued support as patrons and well-wishers. Join us, as we chart new directions in our journey as MSC!
MSC is a boutique consulting company that partners with participants in financial services ecosystems to achieve sustainable performance improvements and unlock enduring value. We have been at the center of the digital finance revolution since we supported the M-PESA pilot-tests and advised Equity Bank on strategy, products, agent networks and bulk payments. Today, we work with governments and leading banks, telcos, and third-party service providers across Asia and Africa.
At MSC, we offer strategic and operational advice that allows our partners to innovate and succeed in a rapidly evolving market. We help you gain a deep understanding of your clients, their needs, perception, aspirations, and behavior. With our support, you can seize the digital opportunity, address the mass market, and future-proof your company.
This policy brief is based on our earlier studies and interactions/ experience with industry players in Indonesia. It presents a broad framework and strategic considerations to align the two DFS programs in a bid to enhance digital financial inclusion.
MicroSave Consulting (MSC) is a boutique consulting firm that has, for 20 years, pushed the world towards meaningful financial, social, and economic inclusion. With 11 offices around the globe, about 190 staff of different nationalities and varied expertise, we are proud to be working in over 50 developing countries. We partner with participants in financial services ecosystems to achieve sustainable performance improvements and unlock enduring value. Our clients include governments, donors, private sector corporations, and local businesses. We can help you seize the digital opportunity, address the mass market, and future-proof your operations.
To explore more about MSC and to browse through our offerings please see the corporate brochure.
As mobile phone prices continue to decline and ownership grows, and as fintechs develop new services, the commercial landscape is changing and opens up opportunities to access and leverage data in new ways. The Digital Financial Services (DFS) sector has the potential to improve youth livelihoods but, in its current state, this potential is limited in scale and sustainability.
Commissioned by the Mastercard Foundation, over the last six months, MicroSave conducted research in Ghana, Kenya, Senegal and Uganda to understand job opportunities in the DFS space. We found the area of opportunity for the most job creation is related to DFS-enabled livelihoods whereby DFS serve as a channel to create a livelihood.
1. Direct Employment: DFS providers hire on an as needed basis and do not willingly target youth as this is a business decision and not a corporate social responsibility decision. Jobs are generally filled with recent university graduates, but opportunities are limited.
2. Indirect Employment: DFS related roles, such as an agent owner or commission based sales agents, are generally out of reach of youth due to high startup costs and ongoing working capital needs. These are often filled with recent graduates who cannot find jobs that match their skills and take these jobs hopefully as a springboard to something else. Handlers or tellers, who work under agents, often work without contracts with limited sustainable livelihood and decent working conditions.
3. DFS-Enabled Livelihoods: DFS can be a tool that enhances access to new markets, business information, and financial products leveraging the DFS ecosystem. It helps create and accelerate the growth and sustainability of people’s livelihoods. The ‘trickle down’ impact on people’s livelihoods is highly dependent on the growth, innovation, and success of the DFS ecosystem.
During our research, and based on extensive experience of the industry, it is clear that many DFS products and delivery systems are not customer-centric, do not meet customer needs and sometimes focus on relatively small parts of the population. Additionally, our recent research commissioned by the Mastercard Foundation in Côte d’Ivoire on DFS products based on needs and merchant payments showcased how DFS products available on the market today do not meet the needs of individuals who continue to use informal services and small businesses. Business owners have a mobile phone and access to internet, but only a minority uses their phones as a business tool, suggesting that providers have not thought yet of offering a corporate value proposition to businesses.
The GSMA’s State of the Industry Report for 2017 highlights that 49.1% of the African continent has a mobile account. This massive pool of customers offers many opportunities for job creation and the development of products and services catering to the needs of local markets. How can we improve digital and entrepreneurship skills to ensure youth have the tools and skills to lead, have access to jobs or become self-employed?
According to the AfDB’s African Economic Outlook (AEO) report, 22% of Africa’s working-age population are starting new businesses, which is the highest rate of any region in the world. The AEO recommends policies supporting the businesses for entrepreneurs by improving skills, grouping business clusters and improving access to funds (see graphic).
Our research indicated that most youth aspire to work for large corporates which are socially perceived as a stable source of livelihoods and signaling entry into adulthood. Many young people aspire to work in ‘white collar’ roles for large corporate brands because they are prestigious and have good reputations. They have, however, limited insights about DFS and self-employment opportunities in the sector. Many young people take DFS-related jobs as a stepping stone to another job or as part of mix livelihoods strategies.
Digital ecosystems and entrepreneurship are essential for growth and job creation. There needs to be a focus on building soft and hard skills, improving youth awareness on information on jobs and earnings, and preparing youth to develop foundational skills for future jobs to ensure entrepreneurship in DFS leads to additional job creation. Through the creation of an enabling environment for self-employment and small businesses as well as revisiting TVET programs to ensure that they are linked to the private sector and their needs African youth will be better prepared for the digital age and be able to create jobs from themselves and others.
The video is the Keynote Speech delivered by Graham A.N. Wright, Director, MicroSave at European Microfinance Week in Luxembourg held on November 15th, 2018.
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Across all markets, employers from our research noted a mismatch between the skills acquired and those required by the labor market. Investment is needed in education to ensure youth are prepared with the right skillsets – including being digitally literate. 