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When You Can’t Save Up – Saving Down and Saving Through

Posted on by MSC

“This Note discusses how low-income households move financial value through time using loans and chit funds in order to access large sums of money. It uses Stuart Rutherford’s framework of saving up (typical savings behaviour); saving down (taking a loan and repaying in small instalments); and saving through (insurance and group-based savings systems like chit funds or ROSCAs).

Low-income households often rely on saving down and saving through to move financial value through time. Poor households use informal sector variants of saving down and saving through – at greater risk and cost. This presents an opportunity for financial service providers, as there is a large unmet demand and room for product innovation. The pattern of usage of these avenues also offers notable insights for developing savings products for poor households.”

Review of MMT Payments to Accredited Social Health Activists (ASHAs) in Sheikhpura, Bihar

Posted on by MSC

An ASHA or Accredited Social Health Activist is a trained community health worker reaching out to mothers and newborns in rural India with home-based Post Natal Care and other health services under the National Rural Health Mission. These ASHAs are entitled to performance based incentives for the services they provide. However, the ASHAs generally face problems such as untimely payments, uncertainty in disbursement date, cheque clearance delay, and long waiting time at the bank branch. The Norway India Partnership Initiative (UNOPS-NIPI Programs) has initiated a pilot project to improve the timeliness of payments to ASHA worker’s incentives in Sheikhpura district of Bihar using a mobile money transfer (MMT) system. The project is steered by State Health Society Bihar (SHSB), with technical support from Eko Aspire Foundation (the Business Correspondent) and State Bank of India (SBI) and with funding and support from UNOPS-NIPI Programs. The case study summarises the impact of the cash transfer programme on the key stakeholders i.e. ASHA workers and government administration and draws comparison between pre-MMT and post-MMT scenario. The programme has resulted in timely payments to ASHAs and hence improved performance by them. It also has lead to increased efficiency of the staff at block level primary health centres and improved monitoring of the ASHAs.

A Closer Look at Multiple Borrowing in the Philippines

Posted on by Parul Tandon

With increasing cases of over-indebtedness among microfinance clients, multiple borrowing is getting its share of unfavourable limelight. Multiple borrowing brings many benefits to clients, but too much can also bring problems. In this Note, we present summary results of a study which looked at this phenomenon in the Philippines.

The study aimed to contribute to the body of knowledge to better understand multiple borrowing and its link to over-indebtedness. It concludes that MFIs and the microfinance industry can look to multiple borrowing as an early warning sign of the need to improve products and services to better meet and serve the needs of the low income market. MFIs would do well to heed the warning.

Over-indebtedness in the Philippines: Clients’ perceptions

Posted on by MSC

This research aims to provide market information to financial institutions on over-indebtedness in order to help them develop client protection strategies. The information can also help financial institutions protect their biggest asset, their loan portfolio, from delinquency.

Why E/M-Banking Will Soon Reach Scale in India (An Optimistic View)

Posted on by MSC

India has a huge opportunity to leverage the potential of e/m-banking and build a cash-light economy. This paper assesses whether e/m-banking will reach sustainable scale in India.

Financial Inclusion through E/M-Banking – The Regulatory Landscape in India

Posted on by MSC

Over the years, the financial and banking sector in India has been opened up slowly, but substantially, with a view to promoting financial inclusion. This Note examines the current state of regulation on m-banking in India and concludes that it is already a largely enabling environment for bank-led models. It is not restrictive regulations that are at the core of slow off take of mobile banking services (especially for the low income segments), but the absence of a strong value proposition for the customer.

In addition, most banks and BCs are still struggling with the basics of their business models, and thus have not been able to scale up operations. Over the years, RBI has clearly shown its intention to open up and relax regulations when the industry shows signs of stability and a promise to grow. It is for the banks to harness the potential of BCs and BFs to the fullest extent possible under the existing regulatory framework and then ask for more concessions or guidance from the RBI where these are necessary.