[From SavingsRevolution blog, 2 March 2013]
What an interesting exchange that Paul has triggered with his last post “The very essence of savings groups.” The post was focused on what kind of products (savings vs. loans) are most needed, but of course the commentary spilled over into what kinds of institutions we should be counting on to deliver them.
I rather liked Kim Wilson’s comment on financial inclusion being microfinance repackaged. But unlike Ian Robinson who interpreted the word “repackaged” in a negative sense (like a mere face-washing), I interpreted it in a much more fundamental way: as an attempt to put a more expansive, meaningful “box” around the notion of what we are trying to achieve and the client benefits that we are seeking.
And I agree wholeheartedly with Kim that the one key benefit of this “repackaging” (ok, let’s call it “reframing”) of microfinance is to invite a much larger variety of players to come in and show us –with deeds— what they can do about it. Maybe the job will be done by caring NGOs who are prepared to take low pay and no profits to do what no one else can do, and maybe it will be done by hard-nosed commercial organizations who find a workable delivery model that helps them expand into uncontested “blue space.” Maybe it will be done by bankers whose business this ought to be, and maybe it will be done by telcos who stumble on a financial service which for them feels like a no-brainer extension of what they already do. Maybe it will be done by training and deploying lots and lots of front-line staff who can help clients, maybe it will be done by putting technology in customers’ hands and letting them help themselves. Maybe efforts will be highly organized through hierarchy and bureaucracy, maybe they will be largely spontaneous through community action.
I have no idea how any of this will play out. Like Paul, I am very skeptical of banks having any real interest in the base of the pyramid – which we really need to be calling the mass market. I am only slightly less dubious of telcos as a class having enough client focus and innovation spark to treat financial services as anything other than a one-size-fits-all. I worry about thousands of little under-trained, unsupervised community banks and coops springing up everywhere as being unsafe, and I worry about restricting thegame to a few large ones as being uncompetitive. I don’t question the good heart of many NGOs, but I do question their desire to go beyond the small and cozy. I doubt that any staff-intensive organization (such as microcredit organizations typically are) can grow substantially and not pervert its own goals, as simple staff performance metrics will always take precedence over more nuanced client-benefit considerations. I am reluctant to believe that the entire solution is in the community, because I see development as a process of loosening the strictures of geography, local authority and tradition and connecting people to opportunities and relationships elsewhere. And I cringe as I become more and more aware of just how donor driven all this is.
Let’s see, who did I leave out? If I neglected to mention any model or type of organization, take that as a sign of how bearish I am about it.
So all this leaves me with two main thoughts. First, we need to welcome as much diversity of approaches as possible. The magnitude of the task is so large, and our successes so far so limited, that it would be downright presumptuous to think we can lock in on a solution. I don’t think we have enough bets on the board yet. And second, we need to find the common ground across diverse models so that new solutions emerge which are better than the sum of the parts. The answer is always in the middle.
Unfortunately, our field has traditionally been characterized by deep ideological rifts and wondrous claims of silver-bullet solutions. We turn any idea into a “movement,” either to extol it or to ridicule it. We have tribal instincts.
Speaking for myself now, may I proclaim that even though I happen to work on mobile phones, I don’t feel part of a mobile banking movement and I am by no means certain that the answer will lie in mobile phones alone. But equally I reject the empty criticism that it’s naive to think that mobile phones can be the solution to all problems (who said they were?). I refuse to accept that technology solutions are automatically supply-push (as if getting people to renew their group loans pretty much automatically every 12 or 16 months wasn’t). I don’t believe that being technology-centric is at odds with being customer-centric (did you notice how much customer value a fistful of engineers at Google, Amazon and Facebook have unlocked?) And I enjoy engaging with the Savings Revolution community, because what you all see and do is so different to what I normally see and do.