Innovating for Financial Inclusion in Client Outcomes Assessment Report June 2018

March 2020 - UNCDF MicroLead Partner Case Study Series Project: Innovating for Financial Inclusion in Benin

Funder: Mastercard Foundation

Technical Service Provider: Grameen Foundation

Authors and Researchers: Grameen Foundation - Beverly Brul - Bobbi Gray - Megan Gash

Co-authors: UNCDF - Pamela Eser - Hermann Messan

Review Committee: United Nations Capital Development Fund - MicroLead - Pamela Eser - Hermann Messan - Ivana Damjanov Mastercard Foundation - Prabhat Labh - Ruth Dueck-Mbeba - Amos Odero

March 2020. Copyright © UN Capital Development Fund. All rights reserved. The views expressed in this publication are those of the author(s) and do not necessarily represent the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States.

2 UNCDF MicroLead Partner Case Study Series Acknowledgements

We would like to thank the staff members of ALIDé and FADeC for their collaboration in the Innovating for Financial Inclusion in Benin (IFIB) project as well as in the assessment activities that are documented in this report. Many thanks also go to our colleagues Nadège Gbaguidi, Christian Loupeda, and Sybil Chidiac for their leadership and support of the research activities. Many thanks go to the UNCDF Microlead team for their support of this project and the review of this report.

Table of Contents

• Executive Summary

4 Introduction 8 Methods 10 Results 22 Discussion & Conclusion

24 References

Acronyms

ALIDé Association de Lutte pour la promotion des Initiatives IFIB Innovating for Financial Inclusion in Benin de Développement NGO Non-Governmental Organization FADeC Femmes Actrices de Développement Communautaire SG Savings Groups FSP Financial Service Providers Executive Summary

Facilitating the linkage of savings groups to financial service providers is an area of innovation in financial inclusion which has received a great deal of attention in recent years. The UNCDF MicroLead Expansion initiative tasked Freedom from Hunger (now merged with Grameen Foundation) with testing savings group-linkage models in Benin through the Innovating for Financial Inclusion in Benin (IFIB) project. The goal of the IFIB project was to link at least 120 savings groups to a formal savings account held with ALIDé. By the end of the pilot project, 219 savings groups had accounts with ALIDé, exceeding the original target.

This report documents the client outcome pre- and post-test assessment results conducted with savings group members of the non- governmental organization FADeC who were supported by the institution ALIDé with linkages to a formal savings account through a mobile money solution.

A simple pre- and post-test assessment conducted with approximately 70 randomly-selected savings group members occurred between 2017 and 2018 and evaluated savings group membership, linkages, and member perception of the product on offer.

Results reveal notable increases in access to mobile phones; ownership and usage of mobile money accounts; access to financial education linking women to mobile money and savings accounts; as well as ownership of savings accounts. Many savings group members grew more confident in using mobile money and accessing their savings account as they gained more knowledge through financial education and having recognized the importance of having group savings accounts.

Connections with ALIDé agents were seen as integral in the building confidence among women SG members. Members highly valued that the ALIDé agents were readily available and were respectful and appreciative towards them as clients. Although radio messages were observed to be a good method to reinforce the value of acquiring a savings account, it was still eclipsed by actual interactions with FADeC and ALIDé agents. An interesting point of discussion and further action would be the low awareness of the members of other ALIDé financial products aside from savings accounts. It would be interesting to explore how savings group members could be made aware of the utility and advantages of using other financial products.

At the conclusion of the IFIB pilot project, ALIDé was convinced of the market opportunity of linking savings groups to their financial services. Field staff and management continued to believe that the digital approach to serving savings group members would reduce their operational costs as well as the costs that members would face in traveling to make deposits or withdrawals, the time waiting at the counter, and especially emotional and confidence barriers faced by many. In short, ALIDé continued to see the IFIB project as a win-win proposition for ALIDé and the future market they desire to serve better and more deeply.

UNCDF MicroLead Partner Case Study Series 3 Introduction

Facilitating the linkage of savings groups (SGs) to financial service providers (FSPs) is an area of innovation in financial inclusion which has received a great deal of attention in recent years.1 There are questions of whether it can be financially feasible for FSPs to do it in various contexts, particularly with add-on components like financial education.2 Another important issue that has emerged is that of scale: what are effective strategies to increase the number of groups linked to savings accounts?

4 UNCDF MicroLead Partner Case Study Series The UNCDF MicroLead Expansion initiative tasked Freedom from Hunger (now merged with Grameen Foundation) with testing SG-linkage models in Benin through the Innovating for Financial Inclusion in Benin (IFIB) project. Through IFIB, Freedom from Hunger set out to:

• Strengthen the capacity of the microfinance institution (MFI) ALIDé to link at least 120 experienced savings groups supported by the non-governmental organization (NGO) FADeC to specialized savings accounts using a mobile money solution. Savings Groups originally targeted for IFIB were FADeC savings group members living in the rural community of Ouinhi in the department of Zou in south-west Benin where ALIDé has its operations. ALIDé also designed a media campaign to directly reach savings groups through local radios and other traditional media such as town criers. This last approach was designed to enable ALIDé to work with a wider range of savings groups operating in the region (particularly in Zagnanado and Zogbodomey, including those supported by local NGOs other than FADeC.) • Combine a proven community-based savings group linkage model with a financial education program using mobile learning tools to reduce the costs of transactions for both customers and ALIDé. Freedom from Hunger adapted its Saving for Change i methodology for an MFI context.

As a core component of IFIB, ALIDé also engaged in a Smart Campaign Client Protection Principles Self- Assessment to ensure that principles were embedded in every element of the model—from the client- centered design and delivery of the savings products to the financial education that respectfully builds participants’ understanding of pricing, risks and consumer rights to the evaluation of product delivery and client satisfaction. This client protection self-assessment built off a similar project implemented in that similarly aimed to link savings groups to formal financial services.3

As of February 2018, 219 SGs, serving approximately 4,965 members, opened savings accounts with ALIDé under a product known as Djidémi. The total volume of savings on deposit equated to 4,804,100 CFA (or ~8,502 USD). Table i outlines the financial product characteristics and Table ii summarizes the learning objectives of the mobile financial education sessions.

i Saving for Change was jointly developed by Freedom from Hunger, Oxfam America and Strømme Foundation. It is a methodology for self-managed savings and lending groups integrated with simple trainings in , business and mon- ey management. Saving for Change brings basic financial services to sus- tainable, cohesive groups that tackle social issues facing their members and their communities.

UNCDF MicroLead Partner Case Study Series 5 Table i Savings Account Product Description

Name of product DJIDEMI

Target population Savings groups formed with rural, poor women in the communes of Ouinhi, Zogbodomey and Zagnanado.

General product description Group-based savings account for savings group members that is acces- sible through ALIDé agents that are deployed on the ground in the com- munities and who will ensure transactions to savings groups: deposits, withdrawals, transfers (sending money to another user).

Account opening Two representatives (group president and treasurer) of the savings group are required to open an account. If savings group lives more than 5 kilometers (km) from a branch office, an Alidé agent will visit the group to assist in transactions. If the group lives within 5 km of an office, the group can visit the office. The following pieces of information are required to open an account:

• Provide a residence certificate and a photocopy of the LEPI card or the Birth Certificate of the group representatives (President and Treasurer) • Fill out the ALIDé account application • A photo of each of the president and treasurer) taken by the ALIDé Agent • A SIM card (if the savings group already has an MTN SIM card, the number is documented. One can use the one from the President or buy a special SIM for the group

Minimum opening balance: 0 FCFA

When opening an account, GEs receive an SMS notification on their phone.

Account use Two representatives of the group (President and Treasurer) are required to make all deposits and withdrawals on behalf of the group. These two people hold the account’s secret code, which is composed of 4 digits.

Account closure The savings groups pay an amount of 2000 FCFA to close an account.

Interest rate The savings account offers interest at a rate of 2.5% annually. Any deposit lasting more than three months will be remunerated in proportion to the actual duration.

Minimum balance 2000 FCFA Account maintenance No account maintenance fees.

Withdrawal fees 2% of the amount withdrawn.

Marketing of the Account The product offered by ALIDé to the savings groups is promoted by ALIDé according to the following channels:

(i) Word of mouth (ii) Public announcements/village criers (iii) Financial Education (see Table ii) (iv) Radio and media (advertising campaign)

6 UNCDF MicroLead Partner Case Study Series Table ii Description of “Go mobile: Keep your money safe!” Financial Education

Title of the session Session objectives (By the end of this session, participants will have…)

1. Introduction to financial product Identified the services offered by the financial product Djidémi Djidémi 2. Advantages and costs of Djidémi Analyzed the advantages and costs of the Djidémi product

3. How to open a Djidémi Determined what the group has to do in order to open a account Djidémi account 4. How to make a deposit into your Examined the procedures to make a deposit into a Djidémi account Djidémi account

5. How to make a withdrawal into Examined the procedures to make a withdrawal from a your Djidémi account Djidémi account

6. How to manage problems and risks Evaluated the potential problems and risks of using the of your Djidémi account Djidémi product

7. Deciding whether to open a Decided whether their group wants to use or not use the Djidémi account Djidémi product

Table iii shows the break-up of the Djidémi accounts opened. Accounts opened in Ouinhi represent those associated with savings groups directly served by ALIDé and those opened in Zagnanado and Zogbodomey represent those associated with the accounts opened in the areas where only the media campaign marketed the Djidémi account. Therefore, 160 accounts were opened in the area where ALIDé has operations and almost 60 accounts were opened in two areas where the media campaign marketed the accounts but where ALIDé had yet to establish a physical presence. Overall, the IFIB target of linking 120 Savings Groups was exceeded.

Table iii Djidemi Account Outreach

Djidemi accounts opened Number of savings group Volume of savings members served collected (FCFA) Ouinhi 160 3,439 3,513,000 Zagnanado 45 1,176 983,500

Zogbodomey 14 350 307,600

Total 219 4,965 4,804,100

UNCDF MicroLead Partner Case Study Series 7 Methods

The client outcomes study includes a simple pre- and post-test methodology capturing knowledge, attitude and behavior change prior to program implementation and after 1 year of implementation. A quantitative survey was designed by Freedom from Hunger, consisting of approximately 64 questions, divided into 5 sections: 1) Respondent Information; 2) Savings Group Indicators; 3) Savings Account Linkage Indicators; 4) Household Indicators (including level indicators); and 5) Food Security. The survey was implemented using Freedom from Hunger’s Social Indicator System (SIS), which includes a monitoring system managed by NGO or FSP staff that emphasizes the collection of socially-oriented indicators of savings group members (in contrast to group financial indicators typically collected by management information systems), while building the capacity of NGO or FSP staff in monitoring and evaluation.

8 UNCDF MicroLead Partner Case Study Series As a way to ease the burden of cost, time and effort of data collection on FSP staff, the client outcomes study follows the SIS sampling strategy: all facilitators interview one randomly selected SG member from the first group formed by each CA that they manage at the time of the baseline. Facilitators use “drawing the short stick” or similar method at a group meeting to publicly and randomly select a participant for surveying. Data were collected using mobile phones and SurveyToGo’s data collection tool. Women are not required to participate, and data is kept confidential.

Seventy-seven (77) individuals who were members of various savings groups under ALIDé were included in the pre-test survey that occurred in February 2017. Out of the original baseline sample of 77 individuals, 65 were able to participate again for the post-test survey that was implemented in late January 2018. It is recognized as limitations of the study that only 85% of the original sample were interviewed for the second round of interviews. Moreover, this evaluation method does not produce a rigorous or scientific representation of all the groups but the sample is seen as providing an adequate example of early groups.

Grameen Foundation staff analyzed the data and developed the final report.

UNCDF MicroLead Partner Case Study Series 9 Results

The following section summarizes and interprets the outcomes from the pre- and post-test surveys. The results are organized by the main topics of the survey, with particularly interesting outcomes highlighted. As results are presented, their interpretation is discussed in the text. At the end of this section, issues of particular interest or concern are suggested for further discussion.

10 UNCDF MicroLead Partner Case Study Series Demographics

Women from the SGs included in the post-test sample were the same ones who participated in the pre-test survey. Table iv summarizes key demographics for the pre- and post-test surveys. All of the women were from rural areas of the Ouinhi commune of the Zou province. At the time of the post-test survey, the average age was 40 years, with ages ranging from 21 to 73 years old. The vast majority were still married (91%), with some who claimed that they have since been widowed or divorced. The average length of time in a savings groups at the post-test was 50 months, or 4 years and 2 months. Most groups had distributed funds on average four (4) times. Food insecurity among the sample was slightly lower at the time of the post-test

Table iv Key Demographics

Indicator Pre-test Post-test (n=77) (n=65) Percentage living in a 100% 100% rural community Average age 38 years 40 years

Percentage who are 92% 91% married Average time in a 43 months 50 months savings group (3 years, 7 months) (4 years, 2 months)

Average numbers of 3 4 times groups distributed funds Percentage who are 91% 85% food insecure

UNCDF MicroLead Partner Case Study Series 11 Poverty Status

Using the Poverty Probability Index (PPI), ii Figure 1 shows that 33 percent of the SG members interviewed at the pre-test were estimated to live below the national poverty line (NPL), estimated at FCFA 369 per person per day—based on 2010 measures. A small percentage more, 38 percent, lived below the $1.25/day international poverty line (estimated at FCFA 397). Significantly more of the sample, 83 percent, lived under the $2.50/day 2005 PPP (estimated at FCFA 794). The estimates of those living below the national poverty line and the $2.50/day PPP line were similar to the national averages, but the rates of those living below the $1.25/ day PPP line varied by about 15 percent (38% for the SG members, and 53% for the national average). Considering the very small difference in FCFA equivalence for the national poverty line (369) and the $1.25/day PPP line (397), this 15 percentage point difference is not particularly important. While poverty measures were captured at post-test, they are not noted here given the short period of time between the pre- and post-test and the fact any change in poverty was not hypothesized to change in one year’s time or influence one’s gaining access to a savings account.

Figure i Poverty Status and Relevant National Benchmarks

90% 83% 80% 76%

70%

60% 53%

50%

38% 40% 36% 33%

30%

20%

10%

0 Percentage living below the Percentage living below the Percentage living below the National Poverty Line $1.25/day 2005 PPP line $2.50/day 2005 PPP line

SGs National ii This survey was developed using a national poverty survey conducted in 2010. Therefore, the benchmarks provided here are provided by Mark Schreiner in the documenta- tion for the Benin PPI survey and may not relate to latest poverty measurements found by the or others. Please see the PPI documentation at http://progressout- ofpoverty.org/country/benin. Since the development of the Benin PPI survey, Innovations for Poverty Action took over leadership of the PPI and renamed it as the Poverty Probability Index from its original name of the Progress out of Poverty Index.

12 UNCDF MicroLead Partner Case Study Series Savings Group Interactions

The indicators in the Savings Group section emphasize client protection principles, with some notable changes in outcomes (see Table v). At the post-test, SG members experienced a slight improvement in the belief that their group members followed principles and procedures (from 86% to 95%). At the pre-test, SG members already had a strong perception that their community agent takes questions and complaints seriously and this perception was maintained at the post-test.

On the question whetherthe group fairly assessed every request for a loan and the capacity of someone to repay it, 91% responded positively at the post-test, demonstrating a slight decrease from the pre-test (97%). The decline could possibly be attributed to the lower sample turnout of the post-test as compared to the pre-test. Sampling differences aside, a recent study conducted by Financial Sector Deepening Kenya on SG projects with CARE and Catholic Relief Services in Kenya found that 22 percent of members reported that they had been pressured by their savings group to take a loan even when they do not want or need one.4 The study found that SG members figure out that the share-out at the end of the cycle will be larger if members borrow and repay with interest income, and in some groups, members savers who do not take out loans are seen as “free-riders.” iii This is an unfortunate, yet seemingly common concern and could also explain the decline of positive perception towards fair assessment of loans and members’ capacity to pay.

There was a noticeable increase in positive agreement towards the question,

In the case when someone cannot repay a loan, do you believe there is fair and respectful “ treatment of that person by the other group members?

From 47 percent at pre-test and 79 percent at the post-test, post-test participants were more likely to believe that there was a fair and respectful treatment from the group towards a member who couldn’t repay a loan. This increase could possibly be attributed to the capacity built among the women members to productively handle ” conflict resolutions in the group and via the financial literacy program of ALIDé facilitators.

iii Ibid, pg. 26.

UNCDF MicroLead Partner Case Study Series 13 On the other hand, far more survey participants at post-test believed that there were women who were unfairly excluded from joining this group. From 58 percent at the pre-test, the number rose to 72 percent at the post-test. The most common criterion unto which survey participants think that women are excluded is because they cannot afford to save as much as the rest of the group (65%). This increase could be due to a stronger realization of other women’s limitations to join the savings groups due to the minimum level of savings required to ensure membership.

Other factors (no description provided) and not being a good fit to the group are also seen as possible reasons for exclusion (32% and 3% respectively).

The last question pertains to the amount that is being saved individually by the women members. The savings amount includes their personal savings in addition to that of the savings group. Saving more than FCFA 1,000 per week increased from 68 percent to 77 percent among the members. This means that more members were motivated to save larger amounts than was previously seen. This consequently also resulted in the decline of members who saved in amounts less than FCFA 1,000.

14 UNCDF MicroLead Partner Case Study Series Table v Savings Group Interactions

Indicator Pre-test Post-test (n=77) (n=65) Do the members in your savings group always 86% 95% follow the principles and procedures as established by the group? (Yes)

If you have a question or a complaint about 100% 99% your savings group, does your community agent take the issue seriously and help you get it resolved? (Yes)

Does your group fairly assess every request 97% 91% for a loan and the capacity of someone to repay it? (Yes)

In the case when someone cannot repay a 47% 79% loan, do you believe there is fair and respectful treatment of that person by the other group members? (Yes)

Do you think anyone is unfairly excluded from 58% 72% joining this group? (Yes)

On what criteria do you think women are excluded?

Cannot afford to save as much as the rest of 30% 65% the group

- Do not “fit in” 4% 3%

- Other 66% 32%

How much are you able to save individually per week including your savings with the savings group? - Less than FCFA 500 3% 2%

- Between FCFA 500 and 1000 30% 22%

- More than FCFA 1000 68% 77%

UNCDF MicroLead Partner Case Study Series 15 Savings Account Linkages Women who have access to mobile phone post-test

The indicators in this section look at questions regarding mobile phone access, mobile money usage, and access to loans and savings accounts (table vi). Eighty-nine percent INCREASED FROM (89%) of the women at the post-test said that now they had access to a mobile phone; 68% AT PRE-TEST a notable increase from the 64 percent during the pre-test. Ninety-one percent (91%), up from 68 percent at the pre-test, felt confident operating a phone, a fairly good outcome considering that low rates of digital literacy common in rural areas. Very few members (12%) had an individual mobile money account for personal use (for herself or her family) at the pre-test. This number visibly increased to 46 percent by the post- test.

There was a 12 percentage-point increase between the pre- and post-test among members who have a loan from formal financial institutions like CLCAM or ALIDé. Although it was not disclosed as to what kind of loan or savings products were particularly availed by the members, this percentage increase could reflect the confidence that the members have towards accessing different financial services.

Sixty-five percent at the pre-test indicated they had received some sort of financial education about linking their group to a mobile money and/or savings account. By the post-test, almost all had noted their participated in some sort of financial education.

The most notable increase occurred among savings group members who had a savings account. Only 3 percent of the savings group members noted their group had a savings account at pre-test; by the post-test, 88 percent had a savings account.

Table vi Savings Group Linkage Indicators

Indicator Pre-test Post-test (n=77) (n=65) Did you have access to a mobile phone before 64% 89% you joined this savings group? (Yes)

Do you feel confident operating a mobile 68% 91% phone? (Yes)

Do you have an individual mobile money 12% 46% account for personal use (for you or your family)? (Yes)

Do you currently have a loan or an account 40% 52% with a formal financial institution for personal use or for you or your family, such as CLCAM, ALIDé products or others? (Yes)

Has your group received any financial educa- 60% 95% tion about linking your group with a mobile money account and a savings account? (Yes) Has your savings group opened a savings 3% 88% account? (Yes)

16 UNCDF MicroLead Partner Case Study Series There were also other indicators that were collected during the post-test that were not reflected during the pre-test survey. These are summarized in Table vii. The respondents’ answered favorably to questions as to whether their group’s money earns interest, members‘ sense of feeling prepared for opening an account, comfort with how the group’s funds are managed, and indications of change from when their group opened a savings account. These could be taken as manifestations of their confidence in using financial services acquired from the financial literacy lessons provided ALIDé facilitators. Eighty percent (80%) of the respondents believe that their hard-earned savings are secured with ALIDé. Asking about the how the group access and use their savings account provide insights on the knowledge and saving habits of women who belong to savings groups. Most women (80%) check the balance of their savings account by asking the assistance of their respective ALIDé agents. Other means of checking their savings account balance are through mobile phones (18%) or by going to the ALIDé office. All (100%) women reported that their groups make deposits to their savings account once month and that they know where to get help whenever they have questions or complaints about their savings accounts.

UNCDF MicroLead Partner Case Study Series 17 Table vii Additional Indicators on Savings Group Linkage

Indicator n= Post-test Does your group’s money earn interest? (Yes) 53 96%

Do you think your group felt well prepared 50 96% when they opened a savings account with ALIDé? (Yes) Are you comfortable with how group funds 50 100% are managed since your group opened an account with ALIDé? (Yes)

Do you think your group has changed positively, stayed the same, or has changed negatively since opening the savings account?

- Changed positively 50 100% How secure is your savings account? 50

- Very safe 80%

- Enough 20%

How does your Savings Group check the 50 balance of your savings account?

- By asking for help from an ALIDé agent 80%

- By going to the ALIDé agency 2%

- With a mobile phone 18%

How often does your group make deposits to the savings account?

- Once a month or less 50 100%

Do you know where to get help if you have 57 100% questions or complaints about savings (Yes)

18 UNCDF MicroLead Partner Case Study Series Information Dissemination Indicators

The innovation that was implemented for the project was using two varied strategies to disseminate information on various financial services available to savings group members: either through an agent or facilitator; or via traditional media such as radio. Almost all respondents (98%) were informed about ALIDé savings account through staff members or facilitators of FADEC or ALIDé (table viii). This was to be expected since those participating in this survey were among savings groups being directly targeted by ALIDé using their agents. A very small percentage (2%) reported to have been informed through a radio message. However, when asked whether they have heard radio messages about the ALIDé savings account, 70 percent affirmed that they heard of ALIDé savings account on the radio at least once. Of those who reported to have heard the radio messages, 93 percent said that they were convinced to open an ALIDé group savings account. The combination of both the direct targeting by FADEC and ALIDé facilitators and the radio messages likely reinforced each other.

Despite the positive reception of ALIDé radio messages, the majority of women who belonged to savings group were unaware of other financial products offered by ALIDé aside from the savings account. This could be due to the particular concentration given to savings account on the two channels deployed through the project. As such, the low awareness of other products likely resulted in the low uptake of other financial products offered by ALIDé. Nevertheless, the women are keen on using their other products in the future.

Word of mouth and regular interaction with ALIDé facilitators are credited by 72 percent of members as the driver that convinced them to use other ALIDé products. All of the participants (100%) would recommend opening a savings account with a financial institution to other savings groups.

UNCDF MicroLead Partner Case Study Series 19 Table viii Indicators on Information Dissemination

Indicator n= Post-test How were you informed about the ALIDé 56 savings account? - By a FADEC staff or facilitator 77%

- By a staff or an ALIDé facilitator 21% - From a radio message 2%

Have you heard radio messages about the 56 70% ALIDé savings account? (Yes)

If you've heard the radio messages, do you 56 93% think these messages convinced you and / or your group members to open the ALIDé group savings account? (Agree)

Do you know other financial products offered 51 49% by ALIDé outside the savings account? (Yes)

Do you currently have other financial 52 35% products from ALIDé, such as a personal savings account or a loan? (Yes)

Do you intend to use any of their other 57 100% products in the future? (Yes)

Do you feel driven by someone to use other 57 72% ALIDé products? (Yes)

Would you recommend to other savings 52 100% groups to open a savings account with a financial institution? (Yes)

Indicators on Services offered by ALIDé Agents

It is also important to note of the quality of services delivered by ALIDé facilitators to members of savings groups. Eighty eight percent (88%) of the respondents stated that ALIDé agents were very easy to reach and were available whenever they needed to make deposit transactions. All of the members (100%) also recognized that they felt respected and appreciated by their respective agents.

20 UNCDF MicroLead Partner Case Study Series Table ix Indicators on Services offered by ALIDé Agents

Indicator n= Post-test How available was your ALIDé agent when 50 you need to make deposits?

- Very available/easy to reach 88%

- Little availability 12%

Do you think ALIDé agents respect you and 50 100% appreciate you as a client? (Yes)

UNCDF MicroLead Partner Case Study Series 21 Discussion & Conclusion

The results from this small assessment exhibit the progress that has been made since the beginning of the IFIB project. Notable increases in access to mobile phones; ownership and usage of mobile money accounts; access to financial education linking women to mobile money and savings accounts; as well as ownership of savings accounts were observed upon comparing the pre-test and post-test results.

22 UNCDF MicroLead Partner Case Study Series Many women grew more confident in using mobile money and accessing their savings account as they gained more knowledge through financial education and having recognized the importance of having group savings accounts. Connections with ALIDé agents were seen as integral in the growing confidence among women SG members. Members highly valued that the ALIDé agents were readily available and were respectful and appreciative towards them as clients. Although radio messages were observed to be a good method to reinforce the value of acquiring a savings account, it was eclipsed by actual interactions with FADEC and ALIDé agents. An interesting point of discussion and further action would be the low awareness of the members of other ALIDé financial products aside from savings accounts. It would be interesting to see as to how SG members could be made aware of the utility and advantages of using other financial products.

Between 2015 and 2017, Freedom from Hunger implemented a similar savings group linkage project in Burkina Faso—known as the Bridge to Financial Inclusion (BFI) project—whereby microfinance institutions built their own savings groups and linked them to savings accounts through mobile money transactions. This project similarly was able to successfully build and link savings groups to formal savings accounts and improve savings group member knowledge, confidence and access to formal financial services.6 While the client outcome assessments for both the IFIB and the BFI projects have relied on data collected by the implementing partners and small samples sizes, they provide some evidence that these linkages have the potential to improve formal financial inclusion of savings group members and link them to additional formal financial services and create financial benefits for savings groups. Further and more rigorous research is needed to verify these findings.

Unlike the BFI project, ALIDé relied on linking FADeC’s existing savings groups to their financial services; however, ALIDé is considering building their own savings groups to link to formal financial services as a means to deepen their outreach. This opportunity was noted when demand was detected in areas where ALIDé was yet to serve through the outreach of the radio marketing. At the time of this report, the IFIB team was assessing the cost of the two outreach strategies and the implications of these costs on reaching and linking savings groups to their savings accounts as well as how to offer additional financial services to those groups, such as loans.

At the conclusion of the IFIB pilot project, ALIDé was convinced of the market opportunity of linking savings groups to their financial services. Field staff and management continued to believe that the digital approach to serving savings group members would reduce their operational costs as well as the costs that members would face in traveling to make deposits or withdrawals, the time waiting at the counter, and especially emotional and confidence barriers faced by many. In short, ALIDé continued to see the IFIB project as a win- win proposition for ALIDé and the future market they desire to serve better and more deeply.

UNCDF MicroLead Partner Case Study Series 23 References

1 https://www.mangotree.org/files/galleries/1752_SEEP_Delivering-Formal-Financial- Services-to-SGs_A-Handbook-for-FSPs-FINAL-20170407.pdf; http://www.uncdf. org/article/1609/linking-savings-groups-a-knowledge-sharing-workshop-migration; https://seepnetwork.org/Peer-Learning-Group-Commercial-Relationships-between- Savings-Groups-and-Financial-Service-Providers; https://seepnetwork.org/Blog-Post/ Commercial-Relationships-between-Savings-Groups-and-Financial-Service-Providers- Considerations-in-Developing-a-Business-Model-for-Linkages; The State of Linkage Report. 2016. Barclays, CARE, Plan International. https://www.mangotree.org/Resource/ The-State-of-Linkage-Report

2 Commercial Relationships between Savings Groups and Financial Service Providers: Considerations in Developing a Business Model for Linkages. 2018. The SEEP Network. ITAD. The Mastercard Foundation Savings Learning Lab. UNCDF. https://seepnetwork. org/Resource-Post/Commercial-Relationships-between-Savings-Groups-and-Financial- Service-Providers-Considerations-in-Developing-a-Business-Model-for-Linkages

3 Gray B, Brusky B, Loupeda C, de Briey V, Gash M. 2018. Protecting Savings Groups Reached Through High-Tech Channels: Guidance from the New Client Protection Principles for a Digital Savings Product. UN Capital Development Fund. https://uncdf-cdn. azureedge.net/media-manager/84615?sv=2016-05-31&sr=b&sig=8VA4G6gBFQNh73vDc yaLDjQ4ZVGI1ueS04lPDQsDr9s%3D&se=2018-07-10T19%3A01%3A33Z&sp=r

4 Rippey, Paul, and Financial Sector Deepening Kenya. (March 2015). Quality of Delivery Study. Pp. vi, 25-26. Nairobi, Kenya: FSD Kenya. Ibid, pg. 26.

5 Gray B, Brusky B, Loupeda C, de Briey V, Gash M. 2018. Protecting Savings Groups Reached Through High-Tech Channels: Guidance from the New Client Protection Principles for a Digital Savings Product. UN Capital Development Fund. https://uncdf-cdn. azureedge.net/media-manager/84615?sv=2016-05-31&sr=b&sig=8VA4G6gBFQNh73vDc yaLDjQ4ZVGI1ueS04lPDQsDr9s%3D&se=2018-07-10T19%3A01%3A33Z&sp=r

24 UNCDF MicroLead Partner Case Study Series ABOUT UNCDF UNCDF makes public and private finance work for the poor in the world’s 47 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for individuals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and by showing how localized investments — through fiscal decentralization, innovative municipal finance, and structured project finance — can drive public and private funding that underpins local economic expansion and sustainable development. By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a number of different SDGs.

ABOUT MICROLEAD MicroLead, a UNCDF global initiative which challenges financial service providers to develop, pilot and scale deposit services for low income, rural populations, particularly women, was initiated in 2008 with support from the Bill & Melinda Gates Foundation and expanded in 2011 with support from Mastercard Foundation and LIFT Myanmar. It contributes to the UN’s Sustainable Development Goals, particularly SDG 1 (end poverty), SDG 2 (end hunger, achieve food security and promote sustainable agriculture) and SDG 5 (achieve gender equality and economic empowerment of women), as well as the Addis-Abeba Financing for Development Agenda (domestic resource mobilization).

MicroLead works with a variety of FSPs and Technical Service Providers (TSPs) to reach into previously untapped rural markets with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents, point of sales devices and informal group linkages The products are offered in conjunction with financial education so that customers not only have access but actually use quality services.

With a specific emphasis on savings, women, rural markets, and technology, MicroLead is a performance-based programme that supports partnerships which build the capacity of financial institutions to pilot and roll out sustainable financial services, particularly savings. As UNCDF rolls out the next phase of MicroLead, it will continue to focus on facilitating innovative partnerships that encourage FSPs to reach into rural remote populations, build on existing digital financial infrastructure and emphasize customer-centric product design. For more information, please visit www.uncdf.org/microlead. Follow UNCDF MicroLead on Twitter at @UNCDFMicroLead.

ABOUT MASTERCARD FOUNDATION The Mastercard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Africa. As one of the largest private foundations its work is guided by its mission to advance learning and promote financial inclusion to create an inclusive and equitable world. Based in Toronto, Canada, its independence was established by Mastercard when the Foundation was created in 2006. For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org. Follow the Foundation at @MastercardFdn on Twitter.

ABOUT GRAMEEN FOUNDATION Grameen Foundation USA (Grameen) is a global nonprofit organization that helps the world’s poorest people achieve their full potential by providing access to essential financial and agricultural information and services that can transform their lives. In 2016, Grameen and the global non-profit Freedom from Hunger joined forces under the banner of Grameen Foundation. The integration of the two organizations brings together Grameen’s expertise in digital innovation to end poverty and Freedom from Hunger’s rich experience providing the world’s poorest women with self-help tools to reduce hunger and poverty. Grameen is headquartered in Washington, D.C., with offices in the U.S., , Africa, and Latin America. For more information, please visit www.grameenfoundation.org or follow us on Twitter: @GrameenFdn.

UNCDF MicroLead Partner Case Study Series 25 MicroLead / UN Capital Development Fund

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