Establishing Effective Partnerships in the Innovation Ecosystem

In this D4T-TIDE Case Study, we spotlight the critical role of effective partnerships within the fintech ecosystem to boost financial inclusion, featuring insights from Laina Finance’s journey in Tanzania.

This case study delves into the importance of collaborations between fintech startups like Laina Finance, which is regulated by the Bank of Tanzania and offers instant credit solutions, and a diverse range of partners including telecom companies, banks, and the customers themselves.

Through examining Laina’s strategies in establishing partnerships that enhance access to digital financial services for underserved populations, the study highlights the synergy between fintech innovation and traditional financial institutions.

This exploration serves as a valuable blueprint for startups navigating their growth pathways and for traditional finance entities seeking to engage with fintech innovators.

The findings underscore the transformative potential of partnerships in creating a more inclusive digital economy, especially for women and youth at the base of the economic pyramid.

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UNCDF Make recourse clear, quick and responsive

Make recourse clear, quick and responsive

The World Bank’s Global Findex acknowledges digital payments as the cornerstone of financial inclusion. The pandemic starkly illustrated their potency then supercharged their adoption. Billions now benefit from access to essential financial services. Recently, there has been a surge in the number of adults embracing digital payments for the first time. Global Findex data reveals that two thirds of adults now engage in digital transactions, with emerging economies witnessing particularly significant growth in the past decade. Account ownership in these economies has grown to 71 percent, a marked increase from 2011 (42 percent). Encouragingly, the gender gap in account ownership has narrowed almost by half.

However, exponential growth is accompanied by a concomitant upswing in disputes and grievances. Redressal systems have not evolved in lockstep with uptake. Users encountered difficulties in both comprehending and navigating the resolution process, especially during complex transactions involving multiple entities – such as government ministries, payment service providers (PSPs), and agents. A recent merchant digitization survey in Pakistan revealed that 50 percent of respondents had experienced poor redressal issues and consequently regarded all digital payments as inherently untrustworthy. The burden of payment system failures weighs heavily on low-income consumers who lack alternative financial resources while awaiting resolution. In the same survey, 65 percent of respondents cited reliability as a principal reason for preferring cash over digital payments. Streamlining complaint processes and ensuring users understand the redressal processes are vital to earn back trust in digital financial services.

Women are even less inclined to use recourse channels due to limited awareness, reduced confidence in navigating them, and a reluctance to disclose personal information. Around one third of mobile money users require some assistance.

Yet, a recent (2019–2020) IPA study in Uganda found that complaints by female customers were only 35 percent of the overall volume, despite women accounting for 45 percent of total subscribers. Women, often with less financial experience, are also particularly susceptible to financial abuse and fraud The same study demonstrated that users with unresolved complaints were roughly three times more likely to reduce or halt usage than those whose problem was resolved. Frequently, users shoulder th impression that responsibility for resolution rests primarily on them. This hampers the recourse process and erodes faith in its efficacy.

Recourse systems act as a vital safety net, particularly for low-income users and women. It is imperative to overhaul these mechanisms, ensuring that filing a complaint is as straightforward as conducting a digital transaction to restore lost trust. This technical note is product of the Responsible Finance Forum (RFF) Recourse Working Group. It is a resource for Alliance members aiming to fortify recourse mechanisms via policy evolution. Within this document, various Alliance member strategies are recast as case studies to demonstrate how recourse has been improved.

These strategies encompass policy revisions, technology-based complaint resolution, and the bolstering of systemic oversights. Recognizing the significance of peer dialogue and knowledge sharing, this technical note is extended to external stakeholders seeking to strengthen their recourse mechanisms through condign policy evolution

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Assessing Digital and Financial Literacy in Vanuatu: Survey on Knowledge, Skills and Access

Assessing Digital and Financial Literacy in Vanuatu: Survey on Knowledge, Skills and Access

The growing availability of digital financial services (DFS) and emerging digital platforms in Vanuatu can provide unique capital-building tools and resources for accelerating financial inclusion and inclusive growth for the last mile. To realize this potential, strengthening digital and financial literacy (DFL) of all population segments, especially the marginalized and low-income groups is essential.

Vanuatu’s National Financial Inclusion Strategy (NFIS) (2018-2023) incorporated Financial Literacy and Consumer Empowerment as its one of the four strategic goals. The strategy outlined following objectives as part of the activities under the strategic goal:

i. Strengthen financial education in educational institutions at the national and sub-national level, the latter being within the TVET sector or other tertiary institutions.

ii. Integrate financial literacy and product awareness by financial service providers into financial services offerings. iii. Raise awareness of the general public vis-à-vis the Secured Transaction Act and other Financial Services-related consumer impact legislation.

iv. Ensure consistency in financial services product disclosure and transparency on fees and charges across all financial services providers.

v. Ensure consistency in or wide awareness of financial services redress and recourse mechanisms across financial services industries.

vi. Develop a financial literacy strategy.

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