Why Microfinance Rocks

Digital Savings GroupsThe Aga Khan Foundation

#18MCSummit

3/9/2016

#What problems are being solved?Cash security$100m per yearTheft isnt a big problem yet, butA robbery at distribution is worth a years household incomeSome groups save $10k+

(Less critically) bookkeeping isnt easy

Donor dependence inhibits scale

3/9/2016##18MCSummit

3/9/2016

#What about bank linkage?We looked at it, but

The business case for bank linkage isnt yet clearDo telcos want lumpy payins?Do agents want to support cash distributions?

We are already looking at mobile money Reduce household financial services expenseHost services (SaaS) for cashless enterprises

3/9/2016##18MCSummit

3/9/2016

#How will it work(from April)?

#18MCSummit

3/9/2016

#How will it work?Pay to/from group from m-wallet of choicePay in and request loans between meetingsMeet fortnightly to review statements and approve loans

Platform will inform, but not decideAll decisions will require randomized approvalsApproval window times out quickly

Keeping it a group

3/9/2016##18MCSummit

3/9/2016

#Likely challenges the big onesWhy meet?Platform is almost too capableWhy limit the group size?Why limit the variation in savings?Why not use an algorithm to suggest big internal loans?Why distribute each year?De-centralization has always been our biggest virtuePrivacy?

3/9/2016##18MCSummit

3/9/2016

#Commercial prospectsWe hope user fees and float margin will sustain platform offering to experienced DSGs

Could we raise other revenue for expansion without donor funds?Customer acquisition for DFS of value to telcos (in exclusive mode)Facilitate value added services Limited group overdraftIndividual loans in parallelInsuranceNon financial services?

3/9/2016##18MCSummit

3/9/2016

#Likely challenges the not so big onesSMS and USSD are clunkyLow literacy and tech savvyPayouts subject to encashment fees (weak digital ecosystem)

3/9/2016##18MCSummit

3/9/2016

#Paperless Training and Tracking (Mozambique)

3/9/2016##18MCSummit

3/9/2016

#Animated training

3/9/2016##18MCSummit

3/9/2016

#Mobile data platform

Animations embedded in an Android appMaster trainers will train from a tabletTrainers will get the animations in a smartphone appSmartphone app will be used to post new groups to a new data platformGroups will update their membership details

3/9/2016##18MCSummit

3/9/2016

#