In markets with high levels of financial exclusion, actors in the financial system, financial ser... more In markets with high levels of financial exclusion, actors in the financial system, financial service providers (FSPs), consumers, providers of financial system infrastructure and other market supporting functions, regulators and other policy makers, often face capacity limitations. These include insufficient or inexperienced staff, lack of knowledge or understanding of the market, and limited financial literacy. Building sustainable and inclusive financial markets will require building the capacity of these actors. Funders that work to promote financial inclusion can play a very useful role in tackling capacity challenges, particularly if they provide support in a way that facilitates the development of a capacity building services market. This approach can benefit the whole financial market as opposed to the more common approach of providing direct support to one or a few actors in the market. This focus note builds on the ideas discussed in facilitating market development to adv...
In most cases of transformation, nongovernmental organization (NGO) microfinance institutions (MF... more In most cases of transformation, nongovernmental organization (NGO) microfinance institutions (MFIs) have two primary objectives: (i) to provide clients with a range of financial services beyond credit, including savings and transfer services; and (ii) to increase access to capital, whether through commercial borrowings, deposits, raising equity, or all three. This paper provides insights and guidance for those who plan to carry out a transformation. Thus the paper's discussion of issues is likely more detailed and technical than most general readers will care to wade through. At the same time, this is not a how to manual nor does it identify right and wrong answers. Such an approach will not be feasible, primarily because of the different scenarios transforming institutions will face depending on local law and regulation. Although this paper touches on matters that have raised difficult ethical and double bottom line issues in recent transformations and post-transformation sale...
As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billio... more As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billion, reflecting a 17 percent increase (US$3 billion) over 2008 commitments. Although this rate of increase is lower than the prior year's 30 percent growth rate, cross-border funding is expected to continue growing. Of cross-border funders, public funders provide a larger share of commitments, though private funders are growing their commitments at a higher rate, with 2009 commitments one-third higher than 2008 commitments. In some markets, cross-border funding represents the lion's share of microfinance institutions' (MFIs') funding base. Yet, where institutions can mobilize deposits and where local capital markets exist, cross-border flows is likely to represent a small part of the picture. This focus note draws on data from Consultative Group to Assist the Poorest (CGAP's) annual surveys on cross-border funding (2009, 2010) to provide an overview of the microfinance ...
Digital financial inclusion can be a game changer for unserved and under-served low-income househ... more Digital financial inclusion can be a game changer for unserved and under-served low-income households as well as micro- and small enterprises. The regulatory, supervisory, and standard setting challenges - and likewise the solutions include those one currently face, and others one can only imagine as billions of new digital finance users go online. One has the opportunity and indeed the responsibility to prepare for both the risks and the rewards of the digitization of financial services.
As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billio... more As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billion, reflecting a 17 percent increase (US$3 billion) over 2008 commitments. Although this rate of increase is lower than the prior year's 30 percent growth rate, cross-border funding is expected to continue growing. Of cross-border funders, public funders provide a larger share of commitments, though private funders are growing their commitments at a higher rate, with 2009 commitments one-third higher than 2008 commitments. In some markets, cross-border funding represents the lion's share of microfinance institutions' (MFIs') funding base. Yet, where institutions can mobilize deposits and where local capital markets exist, cross-border flows is likely to represent a small part of the picture. This focus note draws on data from Consultative Group to Assist the Poorest (CGAP's) annual surveys on cross-border funding (2009, 2010) to provide an overview of the microfinance ...
Nonbank e-money issuers (NEMIs) can play an important role in providing an array of financial ser... more Nonbank e-money issuers (NEMIs) can play an important role in providing an array of financial services-particularly payments, transfers, and savings-for those who are currently excluded from the formal financial system. In some countries, private sector interest in establishing NEMI operations has been hindered by policy maker concerns over the lack of a clear supervisory framework for this relatively new category of financial institution. In light of this, CGAP researched the current supervisory practice in 10 countries that permit NEMIs and found that while few have a clear supervisory approach, all engage in minimal post-licensing supervision. This brief addresses only the supervision of e-money issuing activities of a NEMI. It highlights the primary risks presented by NEMIs and concludes that the minimal supervision undertaken in the researched countries reflects two current realities: NEMIs are engaged in limited activities, and they do not present a systemic risk given the lim...
In markets with high levels of financial exclusion, actors in the financial system, financial ser... more In markets with high levels of financial exclusion, actors in the financial system, financial service providers (FSPs), consumers, providers of financial system infrastructure and other market supporting functions, regulators and other policy makers, often face capacity limitations. These include insufficient or inexperienced staff, lack of knowledge or understanding of the market, and limited financial literacy. Building sustainable and inclusive financial markets will require building the capacity of these actors. Funders that work to promote financial inclusion can play a very useful role in tackling capacity challenges, particularly if they provide support in a way that facilitates the development of a capacity building services market. This approach can benefit the whole financial market as opposed to the more common approach of providing direct support to one or a few actors in the market. This focus note builds on the ideas discussed in facilitating market development to adv...
A well-functioning and inclusive financial sector is critical for efficient resource allocation l... more A well-functioning and inclusive financial sector is critical for efficient resource allocation leading to increased productivity, greater investment, higher overall levels of economic growth, and lower inequality. This is particularly critical in Iraq, where years of political instability and violence have impeded the development of a robust private sector. Microfinance services in Iraq are still nascent and far from meeting their full potential. This diagnostic report aims to present the microfinance landscape in Iraq, its legal and regulatory framework, and potential policy improvements to enhance the operating environment. It aims to inform public and private sector stakeholders on the regulations and laws affecting the development and strategic direction of the microfinance sector. The policy recommendations presented are designed to address factors preventing greater growth and outreach, with the goal of promoting inclusive financial sector development in Iraq.
The use of bank agents has the potential to significantly increase financial access by poor and u... more The use of bank agents has the potential to significantly increase financial access by poor and underserved populations to a range of formal financial services, including savings, payments and transfers, and insurance. In particular, agents who may be individuals, small retail shops, post offices, or large retailers can offer customers a convenient and affordable opportunity to cash-in and cash-out of an electronic payments system. This focus note uses the term 'agent' to refer to any third party acting on behalf of a bank (or other principal), whether pursuant to an agency agreement, service agreement, or other similar arrangement. In most countries, a principal is liable under law for the actions of its agents, whether such actions are explicitly or implicitly authorized. Liability for the actions of a non agent acting on behalf of the bank may be different and will often depend on the contractual agreement. However, a bank's liability (whether by law or contract) for ...
More and more nonprofit microfinance institutions (NGO MFIs) are transforming into for profit com... more More and more nonprofit microfinance institutions (NGO MFIs) are transforming into for profit companies, including regulated financial institutions. Transformations are typically driven by one or more of the following factors: an MFI's need for capital, its desire to offer services that may be limited to regulated financial institutions (such as savings), and new legislation or regulation requiring or permitting transformation.
In markets with high levels of financial exclusion, actors in the financial system, financial ser... more In markets with high levels of financial exclusion, actors in the financial system, financial service providers (FSPs), consumers, providers of financial system infrastructure and other market supporting functions, regulators and other policy makers, often face capacity limitations. These include insufficient or inexperienced staff, lack of knowledge or understanding of the market, and limited financial literacy. Building sustainable and inclusive financial markets will require building the capacity of these actors. Funders that work to promote financial inclusion can play a very useful role in tackling capacity challenges, particularly if they provide support in a way that facilitates the development of a capacity building services market. This approach can benefit the whole financial market as opposed to the more common approach of providing direct support to one or a few actors in the market. This focus note builds on the ideas discussed in facilitating market development to adv...
Peer group table All currency figures are in million US Dollars as of 2009-12-31. N indicates the... more Peer group table All currency figures are in million US Dollars as of 2009-12-31. N indicates the sample size. Growth rates are for 2008/2009 TOTAL CROSS-BORDER FUNDING TO MICROFINANCE Public Funders
E n décembre 2009, les financeurs internationaux ont déclaré des engagements dans la microfinance... more E n décembre 2009, les financeurs internationaux ont déclaré des engagements dans la microfinance 1 d'un montant de 21,3 milliards de dollars US, soit une augmentation de 17 % (3 milliards de dollars US) par rapport à 2008 2. Si cette hausse est inférieure à celle de 2007 (30 %), on peut tout de même s'attendre à ce que les financements transfrontaliers continuent de progresser 3. Parmi les financeurs internationaux, les entités publiques sont celles qui détiennent le plus d'engagements. Mais les flux provenant d'entités privées augmentent plus rapidement (30 % de hausse en 2009 par rapport à 2008). Sur certains marchés, les financements transfrontaliers représentent l'essentiel de la base financière des institutions de microfinance (IMF). Pourtant, partout où les institutions sont autorisées à mobiliser des dépôts et où des marchés de capitaux locaux existent, les flux transfrontaliers sont susceptibles de rester minoritaires (voir l'encadré 1). Cette Note Focus s'appuie sur les enquêtes annuelles du CGAP concernant les sources de financement internationales (2009, 2010) pour dresser un état des lieux du financement de la microfinance et des tendances en matière de financement transfrontalier.
The first two "bank-based" models often rely on nonbanks to provide processing or other technolog... more The first two "bank-based" models often rely on nonbanks to provide processing or other technology. A recently issued report by the Committee on Payments and Market Infrastructures (CPMI) analyzes the increasing influence of nonbanks on retail payment systems. The report finds that improved efficiency through bank outsourcing to nonbanks has the potential to lower fees, increase the range of payment methods, and reach new markets and customers (CPMI 2014).
This Brief addresses only the supervision of e-money issuing activities of a NEMI. It highlights ... more This Brief addresses only the supervision of e-money issuing activities of a NEMI. It highlights the primary risks presented by NEMIs and concludes that the minimal supervision undertaken in the researched countries reflects two current realities: NEMIs are
E n el mes de diciembre de 2009, las entidades de financiamiento transfronterizo notificaron comp... more E n el mes de diciembre de 2009, las entidades de financiamiento transfronterizo notificaron compromisos para las microfinanzas 1 por un importe de US$21 300 millones, lo que representa un incremento del 17% (US$3000 millones) con respecto a la cifra
In markets with high levels of financial exclusion, actors in the financial system, financial ser... more In markets with high levels of financial exclusion, actors in the financial system, financial service providers (FSPs), consumers, providers of financial system infrastructure and other market supporting functions, regulators and other policy makers, often face capacity limitations. These include insufficient or inexperienced staff, lack of knowledge or understanding of the market, and limited financial literacy. Building sustainable and inclusive financial markets will require building the capacity of these actors. Funders that work to promote financial inclusion can play a very useful role in tackling capacity challenges, particularly if they provide support in a way that facilitates the development of a capacity building services market. This approach can benefit the whole financial market as opposed to the more common approach of providing direct support to one or a few actors in the market. This focus note builds on the ideas discussed in facilitating market development to adv...
In most cases of transformation, nongovernmental organization (NGO) microfinance institutions (MF... more In most cases of transformation, nongovernmental organization (NGO) microfinance institutions (MFIs) have two primary objectives: (i) to provide clients with a range of financial services beyond credit, including savings and transfer services; and (ii) to increase access to capital, whether through commercial borrowings, deposits, raising equity, or all three. This paper provides insights and guidance for those who plan to carry out a transformation. Thus the paper's discussion of issues is likely more detailed and technical than most general readers will care to wade through. At the same time, this is not a how to manual nor does it identify right and wrong answers. Such an approach will not be feasible, primarily because of the different scenarios transforming institutions will face depending on local law and regulation. Although this paper touches on matters that have raised difficult ethical and double bottom line issues in recent transformations and post-transformation sale...
As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billio... more As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billion, reflecting a 17 percent increase (US$3 billion) over 2008 commitments. Although this rate of increase is lower than the prior year's 30 percent growth rate, cross-border funding is expected to continue growing. Of cross-border funders, public funders provide a larger share of commitments, though private funders are growing their commitments at a higher rate, with 2009 commitments one-third higher than 2008 commitments. In some markets, cross-border funding represents the lion's share of microfinance institutions' (MFIs') funding base. Yet, where institutions can mobilize deposits and where local capital markets exist, cross-border flows is likely to represent a small part of the picture. This focus note draws on data from Consultative Group to Assist the Poorest (CGAP's) annual surveys on cross-border funding (2009, 2010) to provide an overview of the microfinance ...
Digital financial inclusion can be a game changer for unserved and under-served low-income househ... more Digital financial inclusion can be a game changer for unserved and under-served low-income households as well as micro- and small enterprises. The regulatory, supervisory, and standard setting challenges - and likewise the solutions include those one currently face, and others one can only imagine as billions of new digital finance users go online. One has the opportunity and indeed the responsibility to prepare for both the risks and the rewards of the digitization of financial services.
As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billio... more As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billion, reflecting a 17 percent increase (US$3 billion) over 2008 commitments. Although this rate of increase is lower than the prior year's 30 percent growth rate, cross-border funding is expected to continue growing. Of cross-border funders, public funders provide a larger share of commitments, though private funders are growing their commitments at a higher rate, with 2009 commitments one-third higher than 2008 commitments. In some markets, cross-border funding represents the lion's share of microfinance institutions' (MFIs') funding base. Yet, where institutions can mobilize deposits and where local capital markets exist, cross-border flows is likely to represent a small part of the picture. This focus note draws on data from Consultative Group to Assist the Poorest (CGAP's) annual surveys on cross-border funding (2009, 2010) to provide an overview of the microfinance ...
Nonbank e-money issuers (NEMIs) can play an important role in providing an array of financial ser... more Nonbank e-money issuers (NEMIs) can play an important role in providing an array of financial services-particularly payments, transfers, and savings-for those who are currently excluded from the formal financial system. In some countries, private sector interest in establishing NEMI operations has been hindered by policy maker concerns over the lack of a clear supervisory framework for this relatively new category of financial institution. In light of this, CGAP researched the current supervisory practice in 10 countries that permit NEMIs and found that while few have a clear supervisory approach, all engage in minimal post-licensing supervision. This brief addresses only the supervision of e-money issuing activities of a NEMI. It highlights the primary risks presented by NEMIs and concludes that the minimal supervision undertaken in the researched countries reflects two current realities: NEMIs are engaged in limited activities, and they do not present a systemic risk given the lim...
In markets with high levels of financial exclusion, actors in the financial system, financial ser... more In markets with high levels of financial exclusion, actors in the financial system, financial service providers (FSPs), consumers, providers of financial system infrastructure and other market supporting functions, regulators and other policy makers, often face capacity limitations. These include insufficient or inexperienced staff, lack of knowledge or understanding of the market, and limited financial literacy. Building sustainable and inclusive financial markets will require building the capacity of these actors. Funders that work to promote financial inclusion can play a very useful role in tackling capacity challenges, particularly if they provide support in a way that facilitates the development of a capacity building services market. This approach can benefit the whole financial market as opposed to the more common approach of providing direct support to one or a few actors in the market. This focus note builds on the ideas discussed in facilitating market development to adv...
A well-functioning and inclusive financial sector is critical for efficient resource allocation l... more A well-functioning and inclusive financial sector is critical for efficient resource allocation leading to increased productivity, greater investment, higher overall levels of economic growth, and lower inequality. This is particularly critical in Iraq, where years of political instability and violence have impeded the development of a robust private sector. Microfinance services in Iraq are still nascent and far from meeting their full potential. This diagnostic report aims to present the microfinance landscape in Iraq, its legal and regulatory framework, and potential policy improvements to enhance the operating environment. It aims to inform public and private sector stakeholders on the regulations and laws affecting the development and strategic direction of the microfinance sector. The policy recommendations presented are designed to address factors preventing greater growth and outreach, with the goal of promoting inclusive financial sector development in Iraq.
The use of bank agents has the potential to significantly increase financial access by poor and u... more The use of bank agents has the potential to significantly increase financial access by poor and underserved populations to a range of formal financial services, including savings, payments and transfers, and insurance. In particular, agents who may be individuals, small retail shops, post offices, or large retailers can offer customers a convenient and affordable opportunity to cash-in and cash-out of an electronic payments system. This focus note uses the term 'agent' to refer to any third party acting on behalf of a bank (or other principal), whether pursuant to an agency agreement, service agreement, or other similar arrangement. In most countries, a principal is liable under law for the actions of its agents, whether such actions are explicitly or implicitly authorized. Liability for the actions of a non agent acting on behalf of the bank may be different and will often depend on the contractual agreement. However, a bank's liability (whether by law or contract) for ...
More and more nonprofit microfinance institutions (NGO MFIs) are transforming into for profit com... more More and more nonprofit microfinance institutions (NGO MFIs) are transforming into for profit companies, including regulated financial institutions. Transformations are typically driven by one or more of the following factors: an MFI's need for capital, its desire to offer services that may be limited to regulated financial institutions (such as savings), and new legislation or regulation requiring or permitting transformation.
In markets with high levels of financial exclusion, actors in the financial system, financial ser... more In markets with high levels of financial exclusion, actors in the financial system, financial service providers (FSPs), consumers, providers of financial system infrastructure and other market supporting functions, regulators and other policy makers, often face capacity limitations. These include insufficient or inexperienced staff, lack of knowledge or understanding of the market, and limited financial literacy. Building sustainable and inclusive financial markets will require building the capacity of these actors. Funders that work to promote financial inclusion can play a very useful role in tackling capacity challenges, particularly if they provide support in a way that facilitates the development of a capacity building services market. This approach can benefit the whole financial market as opposed to the more common approach of providing direct support to one or a few actors in the market. This focus note builds on the ideas discussed in facilitating market development to adv...
Peer group table All currency figures are in million US Dollars as of 2009-12-31. N indicates the... more Peer group table All currency figures are in million US Dollars as of 2009-12-31. N indicates the sample size. Growth rates are for 2008/2009 TOTAL CROSS-BORDER FUNDING TO MICROFINANCE Public Funders
E n décembre 2009, les financeurs internationaux ont déclaré des engagements dans la microfinance... more E n décembre 2009, les financeurs internationaux ont déclaré des engagements dans la microfinance 1 d'un montant de 21,3 milliards de dollars US, soit une augmentation de 17 % (3 milliards de dollars US) par rapport à 2008 2. Si cette hausse est inférieure à celle de 2007 (30 %), on peut tout de même s'attendre à ce que les financements transfrontaliers continuent de progresser 3. Parmi les financeurs internationaux, les entités publiques sont celles qui détiennent le plus d'engagements. Mais les flux provenant d'entités privées augmentent plus rapidement (30 % de hausse en 2009 par rapport à 2008). Sur certains marchés, les financements transfrontaliers représentent l'essentiel de la base financière des institutions de microfinance (IMF). Pourtant, partout où les institutions sont autorisées à mobiliser des dépôts et où des marchés de capitaux locaux existent, les flux transfrontaliers sont susceptibles de rester minoritaires (voir l'encadré 1). Cette Note Focus s'appuie sur les enquêtes annuelles du CGAP concernant les sources de financement internationales (2009, 2010) pour dresser un état des lieux du financement de la microfinance et des tendances en matière de financement transfrontalier.
The first two "bank-based" models often rely on nonbanks to provide processing or other technolog... more The first two "bank-based" models often rely on nonbanks to provide processing or other technology. A recently issued report by the Committee on Payments and Market Infrastructures (CPMI) analyzes the increasing influence of nonbanks on retail payment systems. The report finds that improved efficiency through bank outsourcing to nonbanks has the potential to lower fees, increase the range of payment methods, and reach new markets and customers (CPMI 2014).
This Brief addresses only the supervision of e-money issuing activities of a NEMI. It highlights ... more This Brief addresses only the supervision of e-money issuing activities of a NEMI. It highlights the primary risks presented by NEMIs and concludes that the minimal supervision undertaken in the researched countries reflects two current realities: NEMIs are
E n el mes de diciembre de 2009, las entidades de financiamiento transfronterizo notificaron comp... more E n el mes de diciembre de 2009, las entidades de financiamiento transfronterizo notificaron compromisos para las microfinanzas 1 por un importe de US$21 300 millones, lo que representa un incremento del 17% (US$3000 millones) con respecto a la cifra
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