We’re delighted to announce the publication of the latest European Dialogue, presenting the outcomes of the European Microfinance Award 2017 on 'Microfinance for Housing'. The Dialogue series has been published since 2008, and each year one of them is dedicated to the European Microfinance Award, providing e-MFP a great opportunity to present the process, the applicants and the findings from the extensive Award process to a broader audience than those at European Microfinance Week and the Award ceremony. This latest Dialogue was written by e-MFP’s Sam Mendelson with support from Award consultants Katarzyna Pawlak and Ewa Bańkowska, and e-MFP’s Gabriela Erice and Daniel Rozas, and presents the housing programmes of the ten semi-finalists across several sections. Entitled 'Building New Foundations in Housing Microfinance', it looks at the innovations underway in what has for too long been a niche product, but which is growing in importance as MFIs respond to the fact that so many of their financial services are used for housing anyway. Now, they increasingly see the opportunity to innovate in providing a range of financial products and non-financial support to help clients improve their homes, addressing issues of safety, security, health and income-generation in the process.
As outlined in a workshop session at European Microfinance Week 2017, Financial Education (FE) is one of the pillars of financial inclusion. Without it, microfinance clients are not able to make informed and appropriate choices; they cannot compare the costs of financial products, understand the risks of failing to repay their own loans or of taking on someone else’s risk in cases of guarantees, or accurately assess how much credit, and what type, they actually need – if any. FE may be important, but there are key challenges to its provision. First, the link between offering FE and achieving positive impacts are not always direct and clear. Evaluation of the outcomes of FE shows impact to be inconsistent – a function of that impact’s sensitivity to the content and delivery of the education. Second, it is also unclear how, even if the content and delivery to achieve impact were standardised, financial education can be provided sustainably at scale. Provision of any type of training is costly.
There’s a saying in technology circles: “If you’re not paying, then you’re the product.” Nothing could be more axiomatic in the current zeitgeist, as shown by Mark Zuckerberg’s recent testimony in front of Congress to explain the ongoing furore about the sale of Facebook users’ personal data to nefarious entities. Facebook, of course, is free to use. Its users – and the data we produce – are the product. The advertisers and other beneficiaries of that data are its customers. Surprisingly, this little axiom long pre-dates social media. In fact, it goes back at least as far as 1973, when artists Richard Serra and Carlota Fay Schoolman broadcast a short video entitled “Television Delivers People.” But whatever people have until now understood of their relationship with technology platforms such as Facebook and Google, there can be no doubt that the mood has turned. For all the Pollyanna-ish talk of liberation, efficiency and modernization, technology is increasingly seen as the proverbial double-edged sword – something not just from which to benefit, but also, as CFI’s Elisabeth Rhyne has argued just this week, from which to be protected. The protection of clients is central to financial inclusion (or, at least, it is when done well). Technology, too, becomes more and more embedded in how financial services can be offered to low-income and excluded client segments. Coming with it are the well-known opportunities to reduce costs, increase outreach, drive financial education and in particular help remote populations access information and tools to increase their income and protect themselves from shocks.