UNDP and UNCDF engaged MSC to conduct a scoping mission with key stakeholders across Pacific Island Countries (PICs) and design the 2014-2018 phase II of the Pacific Financial Inclusion Programme (PFIP). MSC consulted more than 130 stakeholders including government, central banks, private sector players, donors, and international development agencies. The project covered five Pacific island countries—Papua New Guinea, Fiji, Solomon Islands, Samoa, and Vanuatu.
MSC also conducted stakeholder workshops in four of the countries. We then developed the project proposal for PFIP-II. Our engagement allowed UNCDF and UNDP to secure an initial round of funding (over USD 21 million) for the program. The interventions under PFIP phase II have already benefitted more than 500,000 Pacific Islanders, including rural and low-income women, men, youth, and micro-entrepreneurs.
MSC carried out a comprehensive assessment of the regulatory framework for digital and mobile financial services in Bangladesh for ‘Shaping Inclusive Finance Transformations’ (SHIFT) SAARC, a UNCDF project.
MSC’s regulatory assessment and subsequent policy brief recommended the following:
- Tiered Know Your Customer (KYC) regulations.
- A DFS steering committee in the Bangladesh Bank.
- The introduction of a regulatory sandbox.
- Revisions to the mobile money and agent banking guidelines.
- Investments in the supervisory structures at the Bangladesh Bank.
Since the review, SHIFT and a2i have been working to introduce eKYC alongside a working committee. Meanwhile, the mobile money and agent banking guidelines have been updated, while there is greater coordination of digital finance policy and regulation within the Bangladesh Bank. At the time of writing, discussions on the regulatory sandbox continue.
MSC developed and implemented agent banking strategies for three leading banks in Uganda—Stanbic Bank, Centenary Bank, and DFCU. This intervention increased the financial services outreach of the banks to the untapped remote areas of Uganda. MSC provided technical assistance support to design the strategy and business case, channel development and implementation, and agent network development and management. The MSC team also worked on marketing and communications, behavioral research, pilot testing and evaluation, and the design and implementation of the rollout of agent banking.
MSC’s support helped the institutions to speed up the launch of agent banking with strategic business cases and approval from the Bank of Uganda. At the time of writing, these institutions had realized significant benefits in the 10-month period. By the end of 2018, more than 2,600 agents had registered and thousands of customers had accessed the banking services through the agent channel. The three banks had processed a cumulative 2.9 million transactions with a value of UGX 1.4 trillion (USD 400 million).
MSC’s intervention took place in three Indian states—Uttar Pradesh, Kerala, and Odisha. The intervention helped to increase the penetration of bank accounts from 80% to 95% in target locations within five months.
After the intervention, 100% bank accounts in the target locations were Aadhaar– and mobile number-seeded—a prerequisite for doing digital Aadhaar-enabled transactions. In the state of Odisha, mobile number linkage to bank accounts increased from 12% to 91%. During the process, customers conducted their first digital transaction. At an overall level, digital transactions increased by 30-35% within five months.
In Ramnagar city of Varanasi district in Uttar Pradesh, MSC worked on strategy and implementation plan for transforming Ramnagar into a less-cash village. We increased awareness of the BHIM application and *99# (USSD) by multiple times (from five to 150 merchants). MSC helped to onboard 20 new merchants on BHIM and another 20 merchants on Paytm to accept payments digitally. MSC helped 9% of the weavers receive their salaries digitally in their bank accounts.
MSC worked with Strategic Impact Advisors (SIA) to assess and diagnose the opportunities and challenges in growing a robust agent acceptance infrastructure for digital financial services (DFS) in Liberia and Sierra Leone. This infrastructure would build the capacity and liquidity to support digital payment use for G2P and other bulk payment streams, and in the process create opportunities for agents. MSC’s technical teams worked closely with individual providers in these two hard-to-reach markets. We provided technical assistance, set up agent management systems, and supported operational activity.
As a direct result of MSC’s program activities, DFS providers in Liberia were able to increase agent outlets and set up a more efficient liquidity management system. In five years, they channeled an average transaction volume of USD 180,000 per month through each super-agent from a base of zero super-agent activity. In Sierra Leone, our team assisted providers to exponentially grow their agent networks by over 50% across target geographies within the country in five months and improve active agent rates by over 130%.
USAID commissioned MSC to provide technical assistance to refine and reposition Britam’s microinsurance product line. UNCDF engaged MSC based on our sound market understanding and best practices worldwide. The MSC team conducted a situational analysis of microinsurance at Britam, performed market and behavioral diagnoses, directed concept distillation, and created a product and strategic business case by pilot testing and refining products. We drafted specific market and communication strategies followed by an implementation framework.
Prior to MSC’s intervention, Britam made recurring losses on its microinsurance portfolio. After our advisory and technical assistance, Britam achieved an operational breakeven in 2016 and made a small profit on the microinsurance portfolio. As of the end of 2017, it increased annual profits on its microinsurance portfolio to KES 79 million (USD 0.79 million). By the end of July, 2018, Britam served over 550,000 low-income customers.
