Managing liquidity is critical to the success of any electronic banking initiative because in most emerging markets payment systems are still evolving and most transactions are still in cash, “cash is king”. Ensuring agents have either e-money or cash when customers require it, is the essential challenge of m-banking liquidity management. This Briefing Note examines how to design successful liquidity management systems and the issues that arise.
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New Trends in Agriculture Micro Finance Focus on Poverty Part 2
In this video Renée Chao-Beroff, Director, Microfinance Department, CIDR; General Manager, Pamiga gives an overview of the ways in which rural markets are segmented and how financial intermediaries can develop appropriate products and delivery mechanisms to navigate the risks of agricultural and rural lending. She emphasises on the importance of market segmentation and analysing risk profile for each segment that helps in designing products and design appropriate delivery mechanism for each segment. She adds that this allows for an inclusive approach to rural market and benefits the poor. Taking the example of Tanzania Spices, she highlights the importance of contract farming.
Listening to Agents of M-Banking in India
This note examines the perceptions and demands of agents – the front-line of m-banking solutions. It concludes that although present mobile banking solutions as currently provided in India do offer value to agents in terms of increased footfall, some increased revenues, opportunity to cross-sell etc., they still have a long way to go in terms of value offered to make it really attractive business proposition for agents to encourage mass uptake. That would require: 1. scale to bring more customers on to the m-banking platform; and 2. that those customers are transacting regularly. Driving regular transactions would require a strong and wider customer value proposition like remittances, savings products, payment products etc. in addition to the current basic savings account offering deposit and withdrawal facilities.
Listening to Clients of M-Banking in India
This note examines the perceptions and demands of clients – the end-users of m-banking solutions. It concludes that m-banking services currently offered to the low income market in India do offer value to clients in terms of easy account opening procedures, easy deposit and withdrawal facilities, ability to deposit any amount any time etc. However, there remains significant scope for improving these services to encourage mass uptake and increased usage of the accounts offered. Diversifying the range of services offered would provide an improved value proposition for both customers, who could use m-banking for a wider range of uses.
Consolidation of MFIs – Need and Challenges
This note focuses on consolidation of microfinance firms in India. Many would argue that the Indian microfinance sector has too many small players, and that it will move for mergers and acquisitions sooner or later. Private equity firms have been very active in Indian microfinance – indeed, Indian MFIs have comprised nearly 40% of all private equity transactions in the country during the past two years (JP Morgan-CGAP Microfinance Survey 2010). The note outlines some of the challenges which the MFIs will have to undergo in case of consolidation, and suggests that valuation and institutional cultural differences will be the major challenges.
New Trends in Agriculture: Micro Finance Focus on Poverty Part 1
In this video Renée Chao-Beroff, Director, Microfinance Department, CIDR; General Manager, Pamiga tells that agricultural microfinance has developed despite the challenges that it faces. She explains the rise in demand for agriculture products especially in the emerging markets and how the rural population are mitigating risks through diversifying their produce. She adds that new actors, new opportunities and new behavious in the rural areas have a profound impact on poor people’s access to finance.This changed environment establishes more stability to the agriculture practice thereby facilititating the need for agriculture credit.