Webcast: Digital Finance Innovation is at the Core of Solving Big Development Challenges

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Apr 08, 2014, 03:11 ET

WASHINGTON, April 8, 2014 /PRNewswire-USNewswire/ -- As part of the World Bank Group 2014 Spring Meetings, the session Digital Finance: Innovation at the Core of Big Development Challenges will bring together innovators, private sector leaders, and government representatives to discuss how transformative businesses are taking advantage of giant leaps in digital technology to benefit individuals and small businesses in developing countries who have no access to formal financial services and credit.

DATE: April 9, 2014

TIME: 11:15 am–12:45 pm EDT

Moderated by:
Tilman Ehrbeck, Director and CEO, CGAP

Presenters:
Jin-Yong Cai, Executive Vice President and CEO, IFC
Hortensia Contreras, Vice President, Grupo Bimbo, Mexico
Arjuna Costa, Partner, Omidyar Network
Thomas Duveau, Head of Business Development, Mobisol
Walt Macnee, President, MasterCard Center for Inclusive Growth and Vice Chairman, MasterCard Worldwide
Chidi Okpala, Director, Airtel Money Africa
Sandhya Rani, Postmaster General, Andhra Pradesh, India
Kamal Quadir, CEO, bKash

The event is webcast live at http://live.worldbank.org/digital-finance. Follow on Twitter and join the conversation with #digitalfinance and #wblive.

Media Contacts:
Sona Panajyan: +1 (202) 473-9751, [email protected]
Kai Bucher: +1 (202) 473-5995, [email protected]

Ten Key Facts about Digital Finance and Financial Inclusion

1. Digital finance involves the use of "mobile money" and other innovative financial tools to expand poor people's access to basic services and utilities. The opportunity for impact is high: Nearly 50 percent of people in the developing world own a mobile phone, with close to 70 percent having access to one. Estimates project that each year an additional 130 million people will start using mobile devices across the developing world by 2017.[1]

2. More than 2.5 billion people globally do not have access to formal financial services. More than three-quarters of the world's poor lack a formal bank account, mainly because of the costs involved, travel distances, and the often-burdensome requirements to open an account.[2]

3. During the 2013 Annual Meetings, World Bank Group President Kim called for a concerted global effort to achieve universal financial access by year 2020. He emphasized that universal access to financial services is within reach, thanks to new technologies, transformative business models, and ambitious reforms.

4. About 200 million formal and informal micro, small, and medium enterprises in developing countries lack the financing they need to grow. That's half of all businesses in these countries: Their unmet financing needs are estimated to be more than $2 trillion.[3]

5. Delivering financial services through technological innovations, including via mobile money, can be a catalyst for providing and using a diverse set of financial services—including credit, insurance, savings, and financial education.

6. The mobile money industry continues to grow: With 219 mobile money services in 84 countries, mobile money is now available in most developing and emerging markets. The majority of mobile money services are in Sub-Saharan Africa.[4]

7. Financial institutions use agents—licensed operators who can accept deposits or allow withdrawals of money—to make financial services available outside of physical bank branches, particularly to rural residents. In Kenya, for example, over 100,000 agents serve more than 25 million customers.[5]

8. Digital finance is expanding beyond financial services to a variety of other sectors, including agriculture, transportation, water, health, education, and clean energy. CGAP has identified more than 55 services in digital finance, along with innovations that leverage the already-established infrastructure of mobile payments to reach and serve customers.[6]

9. Digital finance expands opportunities to small businesses by providing them with access to electronic payment systems, secure financial products, and a chance to build a financial history. It also significantly reduces the costs of doing business: Studies indicate that a mobile banking transaction can be done at about one-seventh the cost of a transaction in a bank branch.

10. The public and private sector are working together more closely to expand digital finance and ultimately remove barriers to financial access such as high costs, travel times, and cumbersome documentation requirements needed for many services.

QUOTES FROM PRESENTERS AND PANELISTS

Hortensia Contreras, Vice President, Grupo Bimbo, Mexico
"We see 'mom and pop' stores as the core of the retail culture in Mexico; they are not only the social center for many communities, but also a key driver of the country's economic growth."

Arjuna Costa, Partner, Omidyar Network
"The Omidyar Network is excited by the potential for digital finance to transform the delivery and usage of financial products and services for the underserved. Smart money should leverage the confluence of three trends: (1) the near ubiquity of mobile communication; (2) the proliferation of digital consumer data, and a growing ability to analyze it; and (3) a greater focus on understanding customers' behaviors and needs. This convergence holds significant potential for financial inclusion at commercial scale."

Thomas Duveau, Head of Business Development, Mobisol
"The buzzword 'digital finance' is already an everyday reality for our Tanzanian, Kenyan, and Rwandan customers that are using Mobisol Solar Home Systems. Paying for solar power in small installments through mobile money is not a "fancy option," it's already the norm for commercial transactions by those at the bottom of the economic pyramid."

Chidi Okpala, Director and Head Airtel Money—Africa
"Leveraging a network of about 140,000 agent locations in 15 countries, Airtel Money is currently leading the charge for massive scale financial inclusion, creating entire cashless payments ecosystems and reducing financial transaction costs across Africa. In less than 30 months, we have expanded the service to 15 countries and achieved an active base of 5 million customers, with over 1 million daily transactions. Our aspiration is to ensure 100 million Africans have access to financial services by 2020 via Airtel Money."

Walt Macnee, President, MasterCard Center for Inclusive Growth and Vice Chairman, MasterCard Worldwide
"MasterCard is using innovations in electronic payments technology like mobile and prepaid to enable people to live more secure, empowered, and included lives. We hope to make a large impact by helping improve how governments get social benefits into the hands of recipients. Already, countries like South Africa, Mexico, Colombia, and even the U.S. are using electronic payments to do this."

Kamal Quadir, CEO, bKash
"As millions of poor people use mobile money, like bKash, the poor contributes directly to generating many multiplier effects of the value which can be used in productive activities like funding businesses. This way digital money allows common people to contribute in the nation building efforts and in the macroeconomics of the nation."

Sandhya Rani, Postmaster General, Andhra Pradesh, India
"The India Post is the largest postal network in the world with 155,000 post offices, most of which are in rural areas. The India Post is poised to play a critical role in enhancing financial inclusion because it has the unique advantage of being able to effectively deliver a variety of financial services, including banking, insurance, and remittances even in remote areas of the country."

[1] GSMA Intelligence: Scaling Mobile for Development. August 2013.
[2] The Global Financial Inclusion Database (Global Findex)
[3] IFC Enterprise Finance Gap Database: financegap.smefinanceforum.org
[4] GSMA (2013) State of the Industry 2013 report
[5] Central Bank of Kenya: www.centralbank.go.ke/index.php/retail-payments-2/retail-payments/mobile-payments
[6] CGAP: www.cgap.org/topics/digital-finance-plus

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