European Microfinance Week 2021

DISCUSSION

Ayako IBA welcomed the speakers and participants, gathered to discuss the question how to achieve migrant-smart, gender-inclusive product design for remittance services.

Saskia VOSSENBERG kicked off by presenting the UNCDF vision and practice, focusing on three key elements: improving access, usage and resilience. This is pursued through four activity channels: enabling policy and regulation; inclusive innovation; empowered customers; and, promoting open digital payment systems. Strategic instruments are the application of customer centricity with a gender lens, supply and demand side research, providing technical advice, and training and finding ways of de-risking financial instruments.

Learnings to date are:

1. Understanding that choices of senders are deeply intertwined with the needs and circumstances of their receivers;
2. Value can be added along the customer journey;
3. The gender lens makes us aware that women may have different behaviour than men, at both the sending and receiving end;
4. Digital remittances can be an on-ramp for financial inclusion at both ends as well.

Babette LIND explained the origins of Ping in The Gambia; essentially it stems from dissatisfaction with existing providers: specialized money transfer companies are too expensive; regular banks are too slow and bureaucratic; and both are not particularly client-focused. Establishing Ping solved these shortcomings. The fact that 80% of new clients are recruited through existing clients is an indication that client satisfaction is high, and this motivates the organisation to continue to innovate itself.

Iba presented an overview of the position of remittances in the larger financial inclusion ecosystem, which she illustrated with a graph. The graph shows on a global scale which institutions people use for financial intermediation.

Vossenberg commented on  the complexity of the ecosystem, as it helps us to understand where and how resilience is built, and how critical remittances are in that process. Digitalisation also empowers, for instance by enabling receivers to track the actual transfer (which often was a challenge in the past), and helps improve financial literacy, which in turn allows for instance challenging the pricing of a transfer.

Lind concurred and next explained how Ping invested time and effort in patiently training clients how to transfer through its system. Financial (and digital) literacy empowers indeed. People realise that transferring through Ping results in cost-savings up to 75%, which also adds to customer satisfaction.

Back then to the key question, ‘what are the key ingredients for a migrant and gender focused remittance strategy and practice?’

Vossenberg responded that the process that leads to product and service offerings is critical. That means that it starts with what prospective client’s need and aspire. Research across corridors identifies key components but also differences across countries. Next is to design around trust and confidence of clients. That essentially calls for a turn-around in business planning. Whereas transfer companies’ business plans were designed exclusively on fee income, an inclusive concept puts the client and her needs at the centre, which creates value. Plus, it allows for cooperation with other entities such as NGOs and MFIs to mutually reinforce shared values.

Lind added that it is important to allow women clients to gain control over the destination of remittances received, mostly for family needs such as electricity payments, school fees, health bills, government taxes, etc. A second challenge is to reach out to and include all migrant workers, specifically undocumented migrant workers. Remittances can also be partly used for longer term financial needs such as building a pension or accessing insurance or a mortgage loan. All of that is not easily available for people on the move due to documentation and residency requirements. According to Lind, digitalisation makes more possible than initially envisaged with respect to inclusion. But it also comes with challenges in terms of digital literacy, which requires extra time and effort to empower clients, but also when it comes to interoperation-ability.

From the session, it can be concluded that the migrant dimension is quite dynamic, requiring on-going review and revision to stay relevant for clients and their evolving needs and preferences. Next to applying a specific migrant lens at both the sender and receiver end, a firm gender lens must be applied to particularly monitor the receiving end and facilitate proper utilisation of the transferred funds. This may also open venues for cooperation with microfinance organization and banks in offering new products, including community focused options.