Liveblog: Panel: Why are We needed in the First Place? w/ Matthew Bishop

10:55 am

And that’s it for today’s panel.  Be sure to visit #SoFI2014 for real-time tracking of comments.  We’ll also be posting a short symposium wrap-up this afternoon.

10:54 am

Matthew:  “Key takeaway: we need to retain sense of mission.  Big learning from the last 10 years, and also applicable to new emerging fields of practice like impact investing.”

10:53 am

Stephen:  In Keyna there are more new adults coming into the population than are being banked.  It may be that customers will work with different types of organizations for different purposes.  Organizations need to share profits and value with different organizations.

10:51 am

Greta:  For me it’s around business models.  We need to build much more robust systems and platforms to reach scale.  Before we tackle big data, let’s start with small data — we don’t even know what we’ve got.”

10:50 am

Kamal:  Designing the product in the right way is vital.

10:49 am

Kamal:  Recalls experience of a client using bKash who told him “Too Good is no Good.”  who told him about how her family stopped visiting her to deliver money because they could transact online.  Says we failed that client.

10:48 am

Stephen:  The market among the poor is huge.  The amount of money they hold could help many institutions double their balance sheet.

10:47 am

Greta:  Know and follow your customers.  There’s a lot of value among low-income people.  It’s just disparate.

10:46 am

Matthew:  How much does sense of mission matter?

10:46 am

Greta:  Multiple players are coming in.  It’s not just telcos:  card companies, banks.  Anyone can play.

10:44 am

Stephen:  “This is not just a low-income country issue.  Middle-income countries need some of this too.”

10:43 am

Kamal:  “But when people call bKash or M-Pesa Financial Inclusion, I think it’s overkill.”  It’s not there yet.  bKash’s account balances are creating opportunities to create pools of capital that could be invested in Bangladesh’ economy.  This is what’s really exciting for Kamal.  Echoes with some of what Strive talked about yesterday.

10:41 am

Kamal:  “If we can design the product properly, then people will adopt it… allowing for more efficient distribution.”

10:39 am

Kamal is enthusiastic about the democratizing potential of the mobile phone.  “The most important thing that’s happened in 100 years.”

10:39 am

Kamal on the next ten years:  “Whatever we predict will be proven wrong.”

10:38 am

Stephen explains how he’s tried to bridge the gap between MFIs/ banks and communities at the village level.  Work WSBI has done in Uganda has had huge take up because it’s based around the needs of the community.  Technology is helping link savings groups to banks.

10:34 am

Stephen:  Quotes Reeta Roy’s opening remarks where we “dare to trust”.  For him it’s about many different bottom lines.  Village groups can bring me customers for almost nothing and know and trust them.

10:32 am

Greta:  “What we’re trying to do is to turn microfinance industry into a mass-market industry.  That expands who they serve to reach the bottom of the pyramid.   You can serve those customers with new technologies.”

10:31 am

Greta on the next 10 years:  need a market that’s competitive, built on strong rails (in terms of infrastructure).

10:30 am

Greta:  It’s actually key to get regulation right.  It can stifle innovation or not protect people enough if done wrong.  “What you really want is an ecosystem that is open, interoperable, competitive for all players.”

10:28 am

Matthew:  What should we aiming for?  Who should lead?

10:28 am

Kamal:  bKash finds that customers are ready to adopt new tools… 30 million of its customers have done so. Clever design is key.  The key is finding adequate incentives for everyone:  banks, agents, clients.  Need for clear regulation.

10:26 am

Once again, the discussion around M-Pesa’s scale centers around the peculiarity of the Kenyan market.  Can it be replicated?  If not, what should we be taking from the experience?

10:25 am

Kamal:  bKash does about 40 million transactions in their communities:  stores, service areas, etc.  Microfinance is not about giving money and taking money back.  These interventions need to be properly design and if done properly, a lot of things are possible.  There is a massive debate about whether this should be led by telcoms or banks.

10:22 am

Kamal:  “I told Bob last year I don’t know much about microfinance.  Bob told me ‘that’s why I want you come!”

10:21 am

Scale is beginning to feel like a bigger conversation than what the sector has thought.  It’s not about reaching thousands or even millions:  it’s about reaching everyone.  This is a big shift for even the most successful MFIs.

10:20 am

Greta:  The M-Pesa story has been disruptive.  It’s changed how people see financial services, but also the banking system.  Increases in mobile take up have been also coincided with increases in take up of the formal banking system.  This is a huge cultural shift.

10:18 am

Stephen:  We thought we were being modern by replacing a paper pass book with a mobile wallet.  We really weren’t thinking of this from a human perspective.  70% of the money in a Kenyan village moves within one km.  You can’t move that with mobile money.  We have to get some way to simplfy the interaction in that context.  We are literally sitting in the villages with our partners trying to learn how real people save money.

10:17 am

Stephen:  If you want to make a profit and deliver something socially useful, you have to address the needs of the ultra-poor, especially in low-income countries.  People who live largely in rural areas and make less that .50 a day.  You have to use tech and partners to serve them.  Given the costs, transacting on mobile, it’s a real luxury.

10:14 am

Greta:    Lots of people questioned why IFC and The MasterCard Foundation decided to work with microfinance institutions given the new players in mobile spaces.  We actually think that MFIs have a key role to play in the infrastructure.

10:12 am

Greta Bull of IFC: “While Safaricom and M-Pesa gave us insight, I don’t think they gave us a template.  The last 3 years have proven how hard that is to do?”

10:11 am

Matthew: “How do you view the narrative as to where we’ve come in the last 10 years?  Let us try and also think about the narratives over the next 10 years?  Do traditional microfinance organizations have a role to play and what should it be?”

10:10 am

Matthew:  “If you look at the development world, there’s a sense that impact investing has supplanted microcredit as the thing that European princesses and princesses champion.”

10:09 am

Matthew’s experience with the UN Advisor’s group during the Intnerantional Year of Microcredit in 2005 is instructive.

10:08 am

Matthew talks about the origins of M-Pesa and the original reluctance of telecommunications companies to get involved in banking and financial services.

10:07 am

And we’re back!  Matthew Bishop introduces the discussion by  talking about the recent evolution from micro credit to financial inclusion.