Round 2 with CGAP’s Gautam Ivatury

The ThinkChange India staff is committed to providing our readers with interviews with people we believe are at the brink of something special but have for the most part been overlooked by the mainstream media. Readers will be able to see other conversations under our TC-I Changemakers tag.

This week, Vinay sat down (over the phone) with Gautam Ivatury of the global microfinance center CGAP, which works to expand poor people’s access to financial services. Such services include but are not limited to microcredit and branchless banking. This interview is a follow up to one conducted on May 4, 2008, which you can read here.

Vinay Ganti: Could you please review yourself on the following topics, which we discussed in our last conversation?

  • Reaching beyond MFIs:

Gautam Ivatury: This still continues to be a major focus of CGAP’s mission. Across all of CGAP’s work we continue to look for ways to partner with a range of institutions and providers, including but not limited to MFIs, to be able to massively expand financial services for poor people.

GI: With regard to branchless banking, we set out to accomplish a number of goals. Overall we have been happy with the results of CGAP’s work in this area over the last six months, despite the fact that it has taken longer than expected for our project partners (in countries like Pakistan, Kenya, Mongolia, South Africa and elsewhere) to roll-out the branchless banking channels we helped design and finance.

Since our last talk, CGAP has expanded its policy and regulatory diagnostic work in branchless banking. New markets analyzed have included Colombia, Argentina and Indonesia, and we’ve continued to maintain close dialogue with the Reserve Bank of India and regulators elsewhere.

Also, the actual awareness of mobile banking in the field, i.e. what is and how it can work, has increased dramatically in the past. Last May we co-organized the first major annual event on “Mobile Money” for the unbanked in Cairo with the GSM Association (the industry body for the world’s 700+ mobile operators), IFC and DFID. That event got more than 500 paid attendees, most from private industry. And this week at the GSM World Congress in Barcelona, GSMA and other private sector players will announce additional activities in the space. DFID announced its new FAST program to encourage branchless banking this week. Initiatives like these are critical to get widespread adoption of the concept and to achieve scale. Moreover, major consulting and research outfits like Aite, Monitor and McKinsey have started research and published reports on the topic.

At the same time, our seven branchless banking projects have been slower to launch than we all expected two years ago. There have been some notable achievements — our Philippines partner has entered three new rural provinces and signed up about 80,000 new mobile banking clients, and Telenor bought 51 percent of Tameer Bank (our partner in Pakistan) to jumpstart its mobile banking initiatives. But in general the implementation of mobile / branchless banking has been slower than anticipated.

VG: Why do you think this is? Continue reading

[TC-I Call to Action]: Financial Solutions for Social Change

Ashoka Changemakers and Citi are partnering “in the search for innovative and cutting-edge methods that allow financial security to become a reality for everyone” by offering an online challenge titled “Banking on Social Change – Seeking Financial Solutions for All.”

The competition is designed to reach the world’s entrepreneurs and challenge them to use their substantial talents and commitment to providing financial services for all. The objective is to channel the collective energy of entrepreneurial ideas and skills as a means for creating economic and social change worldwide.

Nominations are due by September 26, 2008, and innovators must submit their entries by October 1, 2008. As an incentive to submit early, entries received before August 15 will be eligible to win an early entry prize of a camcorder and digital camera worth US$1,000.

DBS Bank Offers Social Enterprise Products, Expands in India

DBS Bank, which is based in Singapore, is hoping to expand in India. With branches currently in New Delhi and Mumbai, the bank offers Enterprise Banking to support small and medium enterprises (SMEs) in India. An interesting program is the new DBS Social Enterprise Special Package, which is currently available in Singapore:

The `DBS’ Social Enterprise Special Package’ offers social enterprises preferential rates on business loans and unsecured overdrafts, and fee waivers for a slew of services, among other benefits.

In addition, employees of social enterprises will be granted special privileges for a whole range of personal banking services, including mortgage loans, renovation loans, auto loans, credit cards and general insurance.

No indication of offering this in India yet, but with all the entrepreneurial expansion occurring in the country, there may be a market for it. If you are aware of any banks in India offering financial products to assist social enterprises, please leave information in the comments.

Srijan Microfinance Business Plan Competition

Intellecap, a leading development finance consulting company, partnering with Aavishkaar Goodwell, is holding a microfinance business plan competition with application due March 15th. Srijan, which is in its 3rd year, is aimed at broadening the use of microfinance within the financial services sector. The website describes the competition as —

The last two years has seen the competition become synonymous with entrepreneurial spirit, creativity and innovation in the microfinance sector. Srijan has witnessed an immense response from MFIs, NGOs, educational institutions and young entrepreneurs all over the country. Appreciated as a unique and much required effort, the competition not only showcased the most effective and sustainable concepts but also acted as a forum for greater experience sharing, investor link ups and business networking.

Srijan in its third year, looks at expanding its outreach and aims at selecting motivated entrepreneurs, capable of addressing the above challenges and building companies that will transform the sector and accelerate its integration into mainstream financial services.

Details over the eligibility criteria, dates and other information can be found here.