What We’ve Been Reading: January 24, 2014

The World Bank started off the new year with the publication of the 2014 Global Financial Development Report. After last year’s report, which highlighted the state’s role in finance after the global financial crisis, this year’s main focus is on the level of financial inclusion throughout the world and the steps we should take to increase inclusion. According to the report, an estimated 2.5 billion adults in the world—approximately 50% of the world’s adult population—do not have a bank account with a formal financial institution. Many of these adults simply lack access to a financial institution because banks are too far away and often refuse customers who are riskier than average. However, evidence shows that the poor benefit greatly from financial inclusion, particularly when they have access to basic payments, savings accounts, and insurance services.

Technological innovations have shown to reduce the number of people without access to financial institutions by introducing services like mobile payments and mobile banking. Providing information on financial services and skills through social media and other entertainment venues also seem to work better for the average person compared to a formal training session. Rather than invest in the creation of banks and financial institutions in the area, the World Bank Report encourages the use of modern, technological tools that will instead bring these financial services to poor people’s fingertips.

Grameen Foundation can see firsthand the advantages of technology and mobile financial services for the poor. Aya Silva, the Asia Regional Senior Program Officer for the Grameen Foundation, wrote a great blog post on the value of technology in improving financial services. The GSMA mWomen Working Group in the Philippines got the opportunity to learn about the different methods used to increase access and financial inclusion of women; one of these methods was through using mobile technology. The Grameen Foundation worked together with CARD Bank, the largest microfinance institution in the Philippines, to spearhead a mobile financial services project that will allow women to not only make mobile transactions through their savings account, but also make loan payments and receive loan disbursements through their mobile phone. For these women, who live in the rural Philippines and have difficulty regularly traveling to CARD Bank in Manila, the increased convenience and efficiency of mobile financial services have allowed for more security and safety in their financial transactions and have created an environment in which women can invest confidently in their family’s future.

In addition to these articles we’ve been reading, there are some videos we’ve been watching too! One of these videos is an interview with Mohammad Yunus, founder of the Grameen Bank and 2006 Nobel Peace Prize winner. His time at the World Economic Forum has brought up some great points on the future of social business and the meaning of success in today’s society. Mainly, he believes that social business can become a very powerful tool for solving many human problems, such as poverty, income inequality, and the environment, but since success today is often defined by profits instead of goals and improvements to society, we must change the way we think about business and success. Dr. Yunus’s message has been spreading all over the world, inspiring a new type of entrepreneur, the social entrepreneur,  who focuses on using business to create a better world instead of using business only to generate profit. If businesses continue to listen to society’s needs, the future of social business looks very bright.