Collaboration a Financial Inclusion Accelerator?

This post originally appeared on the SPINNAKER Network.

Recently the Chief Minister of the Indian state of Kerala, Oommen Chandy, declared that at least one member of each household should now hold a bank account. Though holding a bank account is not the end goal — Minister Chandy admitted that the State’s ultimate objective is inclusive access to a full range of banking services — full financial access among Kerala’s 127 villages is certainly an impressive step in India’s ambitious plan to achieve financial inclusion. This is particularly true when noting that India’s village level penetration of banking services hovers around 5%.

Yet, despite India’s notable acheivement in Kerala, the financial services field is still a long way from cracking the code on financial inclusion, and particularly savings, among the world’s poor. While CGAP CEO, Tilman Ehrbeck, believes that reaching full financial inclusion globally is attainable in our lifetime, this growing and often disparate sector will need to find ways to operate more efficiently and more effectively to achieve it. 

Susy Cheston of the Center for Financial Inclusion makes the call to “work as a community” to address the “Opportunities and Obstacles to Financial Inclusion,” as identified by their recently conducted survey among microfinance experts. We absolutely agree. Susy asks “…can we rally around a definition of financial inclusion that includes quality and not just access, and that encompasses the full range of services that all of us need in order to manage our financial lives and increase our assets?” For example, while it is true that proximity is critical insuccessfully offering savings services, in order to have meaningful financial inclusion, the product must also be well-designed and marketed to meet the demands of the poor. Will Kerala’s “no frill accounts” actually show impressive uptake and usage? Or will they lie dormant, as many accounts born out of similar campaigns have gone? While there are a number of notable successes in savings services around the world, understanding and achieving inclusive global provision of effective savings services will very likely require sharing, learning and innovating among a variety of sectors– technology, policy, behavioral economics, finance, marketing and more. 

SPINNAKER is being developed as a platform for those working in the field of savings for the poor — policymakers, technical experts, practitioners, banks and other savings providers — to discuss challenges, exchange ideas and collaborate to spur the innovation that is needed in the sector today. We hope active and interactive knowledge sharing among the field can help prevent us from re-inventing the wheel and instead, take better stock of what we know then work toward filling the gaps of what we don’t. In this age of open access to information and data and social media, knowledge sharing can serve as a vehicle to overcome long-standing challenges, take advantage of emerging opportunities – and ultimately innovate – faster.