The objective of this study was to give a snapshot of the implementation of the program and to evaluate the outcomes of key health-seeking and education indicators of the beneficiaries.
The evaluation followed a modified Regression Discontinuity Design (RDD) and compared the results of the treatment and comparison groups. The groups were selected from the Unified Database (UDB) of beneficiaries maintained by the government of Indonesia. The treatment group consisted of PKH beneficiaries with a poverty score percentile of 11 to 20 as per the UDB while the comparison group consisted of non-PKH beneficiaries who also fall within the same range. The sample size consisted of 1400 beneficiaries and non-beneficiaries each, selected from 15 provinces across Indonesia.
The study revealed that PKH continues to have a positive impact on health and welfare indicators for the beneficiary households. However, the impact on outcomes can improve through compliance monitoring, especially for indicators like the ante and post-natal care (ANC and PNC) visits for both mothers and babies along with the development monitoring of children and regular height checks.
MSC was commissioned by the Social Performance Task Force (SPTF) and The Smart Campaign to develop a research report to understand the changes in the ecosystem of digital credit in Kenya. The study consolidated key findings from the analytics of supply-side data. The analytics was supplemented by insights from the demand-side qualitative research and secondary research. We also gathered customer insights like user experience with the product obtained through a mock-application review exercise.
We analyzed the data analytics used anonymized supply-side data from 14 suppliers including banks, MNO-linked banks, MFIs, and FinTechs that offer digital loans. The merged dataset contained 19 million loan details on 6.7 million unique borrowers. Our process generated results at the aggregate level to eliminate the possibility of having any insights interpreted differently.
The insights suggest that the number of digital loans issued has approximately doubled in the past two years. A few other key insights are as following:
Based on study findings, MSC’s recommendations ranged from data reporting and quality, customer protection, identity fraud, defaults of low-value loans to the loan pricing, and over-indebtedness of consumers, among others. Our team along with SPTF hosted webinars in English, Spanish and French to generate discussion on the key findings.
MSC undertook a study to optimize agent networks in two blocks—one each from the states of Maharashtra and Bihar of India. The objective was to understand the current landscape of financial services in the two blocks along with potential new agent locations and agent types. The geospatial analysis was conducted using mobile applications, such as ODK Collect and GPS Essentials, to collect the data and QGIS software for analysis.
The team mapped the geographical locations of all agent points, bank branches, and post offices to analyze the penetration of banking services in the respective blocks. MSC also mapped non-banking government infrastructure setups, such as primary health centers, panchayat offices, and Fair Price Shops (FPS) along with common service centers (CSCs) and commercial establishments like grocery stores, mobile recharge shops, and computer centers. This helped explore the potential of using these locations as alternative points to access the financial services.
Based on the analysis, MSC identified the following issues in the country that require specific action plans to enhance financial inclusion:
• The service area approach produced mixed results, mostly due to the lack of monitoring of its implementation.
• In areas where BC agents flourish, the support infrastructure needs strengthening to function smoothly. An example of such a method is agent segmentation, wherein agents can be classified into two types—relatively sophisticated sales agents and basic service agents. The ANA India Report of 2017 revealed that 74% of BC agents faced challenges in the rebalancing process, with long travel time being the major barrier. The sales agents can act as rebalancing points for service agents to help solve the problems related to liquidity that the agents face.
• Given the fact that certain areas are underserved or unserved due to a lack of a business case, we need to identify potential agents who are already engaged in other businesses in the area. People running fair price shops, common service centers, and post offices are examples of such potential agents identified by MSC’s analysis. The policymakers should develop a framework to identify businesses, establishments, and people who can be potential agents.
In Kenya, the demand for digital credit is strong as a substitute for both informal and formal financial services is strong. Digital credit can harness significant financial inclusion for the demand side and commercial benefits for the supply side. There is room to enhance customer experience and protect well-being. Additionally, current ambiguities in regulation and unequal access to data between disparate providers have an impact on competition. By extension, the hurdles hinder the quality of service, fair prices, and consumer protection standards.
Given the rapid evolution of the digital credit landscape in Kenya, MSC evaluated the progress and challenges in the sector and proposed recommendations towards a more responsible delivery of digital credit. We developed a research report on the changes in the digital credit ecosystem in Kenya, building on our previous work in analytics and behavioral research. This study consolidated key findings from recent secondary research and is supplemented by customer insights, including product user experience through a mock-application review exercise as well as data analytics of supply-side data.
Clients appreciate the convenience and speed of accessing digital credit. However, some core issues remain, including:
• Insufficient oversight due to ambiguous regulation of financial institutions and lack of regulation of fintechs.
• High rates of delinquency in digital credit and the associated negative listing of customers defaulting on low-value digital loans.
• Interest rates are still high, despite the promise of technology to transfer value to customers.
• Lack of channels to understand the needs of clients or create products that are adapted to them or do both, which threatens digital exclusion for specific customer segments.
• Inadequate customer protection practices, particularly concerning prevention of over-indebtedness, transparency, client recourse mechanisms, and privacy of client data.
• Confusion or dissatisfaction, or both in the user experience due to a “low touch” approach.
The study was commissioned by SPTF and the Smart Campaign, a project of the Center for Financial Inclusion at Accion. It was made possible through the generous contributions of Agence Française de Développement (AFD).
MSC’s “Low-Income Lives” is a series of publications that uncovers how the poor manage on small incomes. These insights have emerged from a large body of careful, evidence-based, and in-depth research in selected geographies. The writings provide an opportunity to learn about the lives of the poor as they deal with small incomes, based on solid data from groundbreaking field research.
Grameen Foundation enlisted the expertise of MSC on market research and savings product design. The objective of this assignment was to develop savings services for the poor in three institutions in Asia and Africa.
MSC conducted market research and a deposit mobilization review and then supported the development of savings services at all three institutions. We used our signature Market Insights for Innovation and Design (MI4ID) market research approaches to design savings products, branding, and marketing. Our team worked to define processes and assist with risk management protocols and systems, and provided extensive support for pilot testing.
These savings products have been successfully rolled out. At the time of writing, the products reach more than 1 million Ethiopians, while deposits fund ACSIs loan portfolio to fuel ACSI’s growth. CARD Bank has now mobilized USD 179 million from its 2.5 million clients—an amount that funds its loan portfolio completely.