Digital credit has grown rapidly over the past 10 years, with over 800 new alternative lending companies established and $9.5 billion invested. Digital credit is defined as loans that are approved instantly through automated and remote processes without human review or a physical visit. In developing markets, mobile network operators play a dominant role in providing digital credit due to their existing customer access points and data sources. Successful digital credit programs can scale rapidly, with examples in Kenya and Tanzania growing to millions of customers within a few years. While primarily used for short-term liquidity needs, digital credit fills an important gap and has the potential to strengthen financial ecosystems and inclusion.
Real time gross settlement systems (RTGS) are specialist funds transfer systems where transfer of money or securities takes place from one bank to another on a "real time" and on "gross" basis. It can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting).
Digitalization of banking refers to conducting its existing operations and developing new functions connecting to Banking through Digital Mediums. The presentation has attempted to explore the Digitalization process in Banking industry that took place from the date of independence to till 2018. The presentation invites any constructive criticism or remarks for future improvement.
"Digital Banking" by Nikolay Spasov
The presentation was part of the 2016 Digital Marketing Masterclass organized by Interactive Advertising Bureau (IAB) Bulgaria and New Bulgarian University (NBU). The scope of the lecture is to present the current trends in banking and the available technologies that are supporting the industry.
An Introduction to Digital Credit: Resources to Plan a DeploymentCGAP
This is a workshop/course offering guidance in developing new digital credit products. This content is designed for a broad audience of banks, mobile operators, lenders, and fintech firms. It may also be of interest to regulators, policy makers and investors/donors.
With any comments or to request more materials (including the financial model [Excel] or original PPT presentation with detailed presenter notes), please write to cgap [@] worldbank.org.
Real time gross settlement systems (RTGS) are specialist funds transfer systems where transfer of money or securities takes place from one bank to another on a "real time" and on "gross" basis. It can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting).
Digitalization of banking refers to conducting its existing operations and developing new functions connecting to Banking through Digital Mediums. The presentation has attempted to explore the Digitalization process in Banking industry that took place from the date of independence to till 2018. The presentation invites any constructive criticism or remarks for future improvement.
"Digital Banking" by Nikolay Spasov
The presentation was part of the 2016 Digital Marketing Masterclass organized by Interactive Advertising Bureau (IAB) Bulgaria and New Bulgarian University (NBU). The scope of the lecture is to present the current trends in banking and the available technologies that are supporting the industry.
An Introduction to Digital Credit: Resources to Plan a DeploymentCGAP
This is a workshop/course offering guidance in developing new digital credit products. This content is designed for a broad audience of banks, mobile operators, lenders, and fintech firms. It may also be of interest to regulators, policy makers and investors/donors.
With any comments or to request more materials (including the financial model [Excel] or original PPT presentation with detailed presenter notes), please write to cgap [@] worldbank.org.
Use of Articificial Intelligence and technologies in providing financial services is what fintech does. Whether it is Payment gateway, insurance, banking, lending, stock trading, taxes.
How Fintech evolved over the years in the World and Indian Economy.
Indian Fintech Companies under different categories
Common Fintech practices adopted by Fintech Companies with better flexibility, convenience and accessibile financial products and services
Technology and the Changing face of Banking SectorHirni Mewada
Presentation on Subject Management Information Systems MMS Semester 1 with Team Members-Neha Rewale,Neha Aranha,Hirni Mewada,Pooja Lotanakar,Pooja Kadam.
Role of Financial Technology in Banking. This ppt describes the impact of Fintech in Banking and the new technologies that are disrupting the banking and financial services. This also includes the need for innovation in the banking sector. Fintech i.e. Financial technology plays an important role in the banking sector. Retail banking, financial technology, Fintech, innovations, Technologies, Imoact of Fintech in banking.
The Rise of NeoBanks with the Power of Technology Aspire Systems
In the Australian SME sector, the advancement in technology has lowered the barrier cost for entry. Investors together ideated and created Judo Bank, Australia's first SME Challenger Bank.
“Digital” is the new buzz word in the banking sector, with banks all around the globe hopping onto the digital bandwagon. Banks of all sizes are making sizeable investments in digital initiatives in order to maintain a competitive edge. Vijaya Bank shows us what are the benefits of the digital banking.
The presentation involves about Fintech industry, the technologies involved, various UPI's, regulators of Fintech Industry in India and Payment Sytstem in India
out line of this Presentation.
Elaboration of Mobile banking.
What is the Mobile banking.
How to connect with Mobile banking.
Features & Benefits of Mobile banking.
Advantages & Disadvantages of M-banking
Mobile banking in world.
Mobile banking in sri lanka.
The Global Landscape of Digital Finance InnovationsCGAP
More than half of the world’s adult population, nearly 2.5 billion people, remain unbanked. Technology – particularly the mobile phone – has been used in recent years to extend financial services past the limits of bank branches and reach new consumers in traditionally underserved segments. Initial efforts focused on payments but have now grown to include savings, insurance and credit products delivered by digital channels, known as “products beyond payments.” Despite a dramatic expansion in the number of digital financial service deployments, the offering of these financial services are not new services. Rather, they are existing services migrated to a lower-cost digital channel, therefore offering greater scale potential. And even then, use of these channels currently remain low.
This research seeks to accomplish four objectives:
Catalog the ways in which technology, especially mobile, can enhance access or use of financial services
Provide a comprehensive landscape of the latest innovations in digital finance
Consider the current and potential impact of these innovations on financial inclusion
Identify enabling conditions and investments needed to unlock the potential of the sector
Tracxn Alternative Lending Landscape - India - July 2015Tracxn
Scope: This report covers companies providing Alternative Lending under Personal loans and Business loans sectors in India.
Interesting Insights:
- ~$27M invested across alternative lending companies in just the last 18 months
- ~30 companies across P2P Lending & SME Lending verticals with more than half founded in just the last 18 months
- Top funded sector: SME Lending (Capital Float ($16M), LendingKart ($9.5M), NeoGrowth ($4.6M))
- Investors: Sequoia Capital, Aspada Investments, SAIF Partners
TRACXN
Building the largest team of Analysts tracking startups globally for Venture Capital Funds.
www.tracxn.com
hi@tracxn.com
Use of Articificial Intelligence and technologies in providing financial services is what fintech does. Whether it is Payment gateway, insurance, banking, lending, stock trading, taxes.
How Fintech evolved over the years in the World and Indian Economy.
Indian Fintech Companies under different categories
Common Fintech practices adopted by Fintech Companies with better flexibility, convenience and accessibile financial products and services
Technology and the Changing face of Banking SectorHirni Mewada
Presentation on Subject Management Information Systems MMS Semester 1 with Team Members-Neha Rewale,Neha Aranha,Hirni Mewada,Pooja Lotanakar,Pooja Kadam.
Role of Financial Technology in Banking. This ppt describes the impact of Fintech in Banking and the new technologies that are disrupting the banking and financial services. This also includes the need for innovation in the banking sector. Fintech i.e. Financial technology plays an important role in the banking sector. Retail banking, financial technology, Fintech, innovations, Technologies, Imoact of Fintech in banking.
The Rise of NeoBanks with the Power of Technology Aspire Systems
In the Australian SME sector, the advancement in technology has lowered the barrier cost for entry. Investors together ideated and created Judo Bank, Australia's first SME Challenger Bank.
“Digital” is the new buzz word in the banking sector, with banks all around the globe hopping onto the digital bandwagon. Banks of all sizes are making sizeable investments in digital initiatives in order to maintain a competitive edge. Vijaya Bank shows us what are the benefits of the digital banking.
The presentation involves about Fintech industry, the technologies involved, various UPI's, regulators of Fintech Industry in India and Payment Sytstem in India
out line of this Presentation.
Elaboration of Mobile banking.
What is the Mobile banking.
How to connect with Mobile banking.
Features & Benefits of Mobile banking.
Advantages & Disadvantages of M-banking
Mobile banking in world.
Mobile banking in sri lanka.
The Global Landscape of Digital Finance InnovationsCGAP
More than half of the world’s adult population, nearly 2.5 billion people, remain unbanked. Technology – particularly the mobile phone – has been used in recent years to extend financial services past the limits of bank branches and reach new consumers in traditionally underserved segments. Initial efforts focused on payments but have now grown to include savings, insurance and credit products delivered by digital channels, known as “products beyond payments.” Despite a dramatic expansion in the number of digital financial service deployments, the offering of these financial services are not new services. Rather, they are existing services migrated to a lower-cost digital channel, therefore offering greater scale potential. And even then, use of these channels currently remain low.
This research seeks to accomplish four objectives:
Catalog the ways in which technology, especially mobile, can enhance access or use of financial services
Provide a comprehensive landscape of the latest innovations in digital finance
Consider the current and potential impact of these innovations on financial inclusion
Identify enabling conditions and investments needed to unlock the potential of the sector
Tracxn Alternative Lending Landscape - India - July 2015Tracxn
Scope: This report covers companies providing Alternative Lending under Personal loans and Business loans sectors in India.
Interesting Insights:
- ~$27M invested across alternative lending companies in just the last 18 months
- ~30 companies across P2P Lending & SME Lending verticals with more than half founded in just the last 18 months
- Top funded sector: SME Lending (Capital Float ($16M), LendingKart ($9.5M), NeoGrowth ($4.6M))
- Investors: Sequoia Capital, Aspada Investments, SAIF Partners
TRACXN
Building the largest team of Analysts tracking startups globally for Venture Capital Funds.
www.tracxn.com
hi@tracxn.com
Starting today, you can lend online to consumers and businesses. You can reach more customers, and better qualify them. Increase your ROI by lowering your cost of lending more than 50% and increase your revenue per customer more than 25%.
Be where your customers are, when they want you. It’s a new day in banking. Digital lending is here.
That’s banking without walls.
Tracxn Startup Research: Alternative Lending Landscape, September 2016Tracxn
This report covers lending companies which operate through an online platform and use alternative data points for credit scoring. It also covers ecosystem of companies that enable alternative lending.
Alternative Data: Transforming SME FinanceJohn Owens
This presentation summarizes the IFC/World Bank/G20 GPFI report on the landscape of alternative data and players that are expanding access to SME finance. This presentation was prepared jointly with the effort of my co-author Lisa Wilhelm. The complete report can be downloaded at https://www.smefinanceforum.org/post/alternative-data-transforming-sme-finance
Digital financial services (DFS) are rapidly rewriting the landscape of financial access in developing markets. This deck is meant to serve as a primer to the DFS space by explaining the basic concepts and strengths of DFS models; showing how they are so successful because they correspond to the weaknesses of traditional delivery; and showcasing some of the next generation of DFS products in order to illustrate that this is just the beginning of a cross-sectoral revolution of access.
0601035 retail banking front office management activitySupa Buoy
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I am a mentor, Friend for all Management Aspirants, Any query related to anything in Management, Do write me @ supabuoy@gmail.com.
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PowerPoint presentations from Fundación Capital's South-South Knowledge Exchange Forum, organized with support from IFAD "Leveraging Opportunities to Encourage Financial Inclusion"
Greensill Capital Investor Presentation Deck March 2016.pdfBryann Alexandros
Greensill Capital was a financial services company based in the UK and Australia. It specialized in providing supply chain financing and related services. The company was founded in 2011 by Lex Greensill, a former banker and adviser to the UK government. It claimed to have revolutionized the way businesses pay their suppliers and access working capital. It had over 1,000 clients and 5 million suppliers in 175 countries by 2020. However, Greensill Capital failed in March 2021 after losing its main insurer and facing a liquidity crisis. The company was accused of misrepresenting its assets, overexposing itself to a single client (GFG Alliance), and engaging in questionable practices such as reverse factoring and future receivables. The company filed for insolvency protection on 8 March 2021 and was sold to Apollo Global Management for $60 million134. The failure of Greensill Capital triggered a series of investigations, lawsuits, and scandals involving its investors (such as Credit Suisse and SoftBank), its customers (such as GFG Alliance and Sanjeev Gupta), its regulators (such as the UK Financial Conduct Authority and the Swiss Financial Market Supervisory Authority), and its lobbyists (such as former UK Prime Minister David Cameron).
Though digital credit has been in Tanzania for years, there have been few analyses of the country’s digital credit market. Existing studies raise important concerns about digital credit’s impact on customers. To help fill this knowledge gap in Tanzania, CGAP and the Busara Center for Behavioral Economics, at the request of the Bank of Tanzania, analyzed data from three digital credit providers and built a first-of-its-kind, data-driven picture of the digital credit market’s evolution and current state. In total, we looked at transactional and demographic data for more than 20 million loans disbursed over 23 months.
This playbook discusses the various value-added services (VAS) that could increase uptake of mobile retail payments in Tanzania and similar emerging markets.
Digitizing Merchant Payments: What Will It Take?CGAP
A staggering amount of cash is paid to retail merchants worldwide -- around $19 trillion out of a total of $34 trillion in payments. What will it take for digital payments to beat cash?
Wallet and Over-the-Counter Transactions: Understanding Financial IncentivesCGAP
How well do financial incentives encourage customers to opt for wallet transactions instead of over-the-counter transactions? To find out, CGAP looked at four diverse markets in Africa and Asia: Bangladesh, Ghana, Pakistan, and Tanzania.
Real-Time Customer Interactions via SMS (Juntos and Mynt)CGAP
Myntpartnered with Juntos to impact customers’ financial behavior. Phase I was focused on driving GCash transactions and the purpose of Phase II was to engage customers on topics of credit and the Instaloan product.
Global Landscape Study on P2G Payments: Summary of in-country consumer resear...CGAP
For this study on P2G (Person-to-government) payments, Rwanda was selected as a focus country given the potential reach and varied nature of two key initiatives: the IREMBO e-government platform and the Tap&Go smartcard for public bus transport. Digital payments for school fees and utility payments were also studied. Tap&Go is privately managed but offers P2G learnings for other countries where public transport is government-run.
The research sought to answer questions across three key areas:
1. How well did digital P2G payment solutions reach and address the needs of the financially excluded?
2. What were effective and sustainable business models between actors, and how were they set up?
3. How do current and planned solutions support and work with the evolving digital payments ecosystem in Rwanda?
Digital Rails: How Providers Can Unlock Innovation in DFS Ecosystems Through ...CGAP
This document explains the concept of “Open APIs” in digital finance services (DFS), how they enable increased innovation, and the role they can play in expanding DFS ecosystems.
Saldazo, a Visa debit card product co-branded with Banamex bank, has made Mexico’s largest corner store retail chain – OXXO – the country’s number one transactional account supplier. This presentation provides a Mexican market overview and shares key success factors, challenges and insights from this project.
Smartphones & Mobile Money: Principles for UI/UX Design (1.0)CGAP
CGAP holds that Smartphone interfaces are likely to become the main interface for mobile money use. A well-designed interface will drive growth, profitability, and a much improved user experience. This presentation outlines 21 principles for UI/UX design.
Customer Segmentation: Design and Delivery (Webinar)CGAP
This webinar, recorded in September with SPTF, covers the design and delivery of customer segmentation work. Included are example cases from CGAP's work, sharings by webinar participants, and a preview of CGAP's forthcoming Customer Segmentation Toolkit. The webinar recording is available at https://youtu.be/RJfthuKif80
Why Star Ratings Matter for Financial InclusionCGAP
Using the example of MercadoLibre, this presentation details the ways in which e-commerce sales data--not typically available for credit scoring--can enrich existing scoring models and improve their predictive power, with positive implications for the financially excluded.
Services Financiers Numériques pour les Producteurs de Cacao en Côte d’IvoireCGAP
Les petits exploitants agricoles, même ceux des chaines de valeur structurées comme celle du cacao en Côte d’Ivoire, n’ont généralement pas la possibilité d’accéder aux services des banques, institutions de microfinance et autres institutions financières formelles. Fournir à ces segments de clients des services financiers adaptés qui soient abordables et durables constitue un défi majeur.
L’un des nombreux défis en Côte d’Ivoire est de sortir du système de paiement en espèces pour qu’ainsi un lien soit établi entre ces exploitants agricoles et les institutions financières. Le canal mobile offre une opportunité unique pour effectuer cette transition du cash vers les paiements numériques mais la proposition de valeur pour les exploitants agricoles doit être attractive.
C’est ce défi qu’Advans Côte d'Ivoire s’est engagée à relever et les résultats du projet pilote – mis en œuvre au cours des derniers 22 mois par Advans avec l’appui du CGAP - sont prometteurs.
Digital Financial Services for Cocoa Farmers in Côte d'IvoireCGAP
Smallholder farmers, even those in structured value chains such as cocoa farmers in Côte d’Ivoire, are largely unable to access banks, microfinance institutions and other formal financial institutions. Providing meaningful financial services to these customers in an affordable and sustainable manner is a great challenge. In Côte d’Ivoire, transitioning from cash to digital payments may alleviate some of these challenges
This presentation details a digital financial services pilot project – implemented over 22 months by Advans Côte d'Ivoire with the support of CGAP – which has shown promising results.
Digital Finance and Innovations in Education: Workshop ReportCGAP
CGAP’s Digital Finance Plus initiative convened a workshop in Nairobi on 7 April 2016 aimed at bringing together stakeholders interested in the opportunities for digital finance to improve the affordability of education for low-income households. This document captures themes from the workshop presentations and design thinking session.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
1. The Emerging Landscape of Digital Credit
Maria Fernandez Vidal
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Presented at CGAP’s learning event: Customer value & Customer risks: Emerging issues in Digital Credit & Data Privacy, February 2017, Paris
2. 2
• In last 10 years:
‒ 800+ new
alternative
lending
companies
‒ USD 9.5 B+
invested
• Fast growth: >50%
of total investment
made in 2015
• 7 “unicorns” (SoFi,
CreditKarma,
Klarna, Avant,
Prosper, Funding
Circle, Kabbage)
• Several IPOs (e.g.
Lending Club,
OnDeck)
Alternative lending options have grown rapidly in developed
markets over the past 10 years
Source: Tracxn, “Alternative Lending Report”, Dec 2015
3. Payment account
$
Data pool
0110101
1101010
0100111
0010011
Balance Sheet
Access points
• Diverse players
• Deep data pools, multiple sources of
information
• Internet connectivity and smartphones
universally available
• Payments infrastructure (switches, ACH)
that disaggregate the value chain and
enable innovation
Credit bureau, Social
media, Internet
Banks, Prepaid issuers,
retailers, MNOs
Internet, Smartphone
apps, ATMs, ACH
Numerous sources
Developed markets Sub Saharan Africa
MNOs
BANKS
Fin Co’s.
In developing markets, especially in SSA, MNOs play a dominant
role due to the lack of alternative channels to reach customers
• In SSA, MNOs concentrate the key aspects
needed to reach customers with a credit
offering – except the balance sheet, but that
can be a “commodity” accessed through a
partnership or a lending license
• In many Asian countries banks have a
higher penetration in the low income
segment
Payment account
$
Data pool
0110101
1101010
0100111
0010011
Balance Sheet
Access points
3
4. What do we mean when we refer to digital credit?
Defining attributes
of digital credit
Instant
Automated
Remote
1
2
3
• Loans are approved instantly, often
within seconds
• Individual decisions are undertaken
without a one-by-one human review
• Borrowers can receive funds and repay
remotely without visiting a B&M location
Additional
characteristics of
the space we are
focusing on
Collateral-free
Direct to individuals
Developing markets
Targeting the Unbanked
4
5
6
7
• Collateral restricts access and generally
requires an in person interaction
• Loans for businesses and P2P have
specific characteristics
• We focus on Africa, Asia and Latin
America
• Products that do not require a prior
bank account can reach the unbanked
4
5. Example: M-Shwari loan
.
. .
8 SEC
Turn around time on
account activation
6 SEC
Turn around time on
transaction processing
Kenya (2012)Country/Launch
Providers
Deposit into
mobile
account
Instant
Automated
Remote
Collateral-free
Direct to individuals
Developing market
No bank account
5
6. Though still concentrated in Kenya, Digital Credit is a growing trend
across emerging markets
Philippines
DRC, Ghana, Malawi, Niger,
Rwanda, Tanzania, Uganda, Zimbabwe
Kenya
Mexico
Pakistan
Indi
a
• Currently 22 live deployments
globally*:
‒ 18 deployments in SSA
‒ 5 offer Credit & Savings
‒ 6 have >1 M users
• Most:
‒ 2-4 weeks average tenor
‒ USD $10-$50 average loan
amount
‒ Interest rate 6 – 10% for
duration of loan
• Estimated 24M+ subscribers
‒ About 15-25% active
borrowers
• For example, M-Shwari in Kenya:
‒ 13.5 M customers
‒ NPL = 1.7 %
Note: These deployments strictly follow our definition
of digital credit. If expanding the definition, e.g. not
fully automated, P2P and SME lending etc., the
number of deployments increases to 50+.
As of January 2017
6
7. Successful deployments can scale up rapidly, as illustrated on the
example of M-Shwari in Kenya and M-Pawa in Tanzania
2012 2013 2014 2015
M-Shwari Customers
(Million)
Includes savings and loan customers
Nov 2012:
M-Shwari Launch
2.9
9.0
12.5
M-Pawa Customers
(Millions)
May
2014
0.2 0.4
0.7
1.3
2.0
3.6
4.1
June
2014
Sept
2014
Jan
2015
June
2015
Dec
2015
March
2016
7
8. And have can lead to significant growth for the players involved
Deposit Accounts
(Million)
Loans
(Million)
2011 2012 2013 2014 2015
0.04
1.06
5.65
9.35
12.93
0.01
0.89 0.90
1.85
2.69
Source: Central Bank of Kenya
Nov 2012:
M-Shwari Launch
Kenya
8
9. Digital credit deployments typically offer small, short-term loans, but
there is some variation on the loan terms, amount, and pricing structure
LOAN TERM: 4 weeks 1, 2, 3, or 4 weeks 16 weeks4 weeks
Note: Data as of Dec 2015
USD $30 USD $10 USD $50USD $125TYPICAL
LOAN AMOUNT:
INTEREST/FEE: 7.5% monthly 0.5% a day 1.5% weekly
None 10%
initiation fee
One time
application fee of
$2 if approved
ADDITIONAL FEES:
5% handling
Transaction fees
for moving funds
to/from wallet
Kenya (2012) Tanzania (2014) Zimbabwe (2014) Philippines (2015)COUNTRY
9
10. Digital credit is primarily being used for day to day needs and
emergencies
Reasons for taking loans by selected institution type (%)
Kenya, FinAccess 2016
34.2
6.7
14.5
10.7
18.9
5.9
3.2
40.9
8.1
10.5
11.8
46.2
5.2
1.8
6.8
5.8
15.2
3.6
45.9
10.5
36.5
21.5
17.1
8.2
11.5
40.1
34.1
51.5
37
36
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
House/Land
Emergency
Education
Agriculture
Business
Day to day needs
Banks Mobile banks Microfinance SACCOs Informal providers
11. There are unique aspects of the digital credit product that make it
different from traditional products like microfinance
Digital Credit Microfinance
Type of loan
Need being
addressed
Requirements
Short term
Short term liquidity need due to
irregular income
No collateral or formal proof of
income generally required
Medium term
Financing for an asset to be used
in a productive activity
A business plan or functioning
business and collateral are
generally required
Target Anyone that has a short term need
for cash
MSME owner, farmer, self-
employed
Breakeven loan
size
$10-$50 $300-$600
Breakeven
interest rate
? 15%-40%
Example:
11
12. This business model requires higher annualized interest rates to
breakeven when compared to longer term loans
Term 1 month
Amount $20
Cost of
capital
0.5% per
month
(6%)
Operational
cost per loan
10c
Simplified example:
Assumptions:
Breakeven
interest rate
12.2% per month
(299%)
Breakeven
interest rate
6.3% per month
(109%)
Breakeven
interest rate
18.8% per month
(692%)
12
Default rate
10%
Default rate
5%
Default rate
15%
Scenario A
Scenario B
Scenario C
Note: Simplified example for illustration purposes only, should not be understood as an accurate description of the cost of a digital credit product.
13. NBFI + MNO
NBFI scores,
underwrites,
and lends on
own balance
sheet
MNO
provides
data, wallet
and agents
TIMIZA
Jumo+ Airtel
TANZANIA
There are different types of partnerships in the market,
depending on the role each player takes in the value chain
Balance
sheet
Data pool
Payment
account
Credit
scoring
Product
Example:
Bank / FI
Mobile Network
Operator
Tech Firm/NBFI
BANK + MNO
+ Tech Firm
Tech Firm
provides
scoring service
Bank
underwrites
and lends
MNO
provides
data, wallet
and agents
Libiki
UBA + Tiaxa
+ Airtel
DRC
BANK+ MNO
MNO
provides
data, wallet
and agents
Bank scores,
underwrites
and lends
MSHWARI
Safaricom+
CBA
KENYA
BRANCH
KENYA
Tech Firm
scores,
underwrites,
and lends on
own balance
sheet
Uses MNO
wallet and
agents for
cash-in and
cash-out
Tech Firm + MNO
TELCO- LED MODEL TECH-FIRM LED MODEL
Access
points
Tech Firm
reaches
customers,
scores, and
lends on
own sheet
Uses
Internet
footprint
INTERNET
MARKETPLACE
KUBO*
FINANCIERO
MEXICO
Internet /
Banks
*Requires previous bank account ownership
13
Smartphones or internet
as the Access Point
14. • Smartphone penetration: The availability of a direct digital channel through
smartphones or online enables the tech-led models to use apps as access points
• Digital footprint: The availability of digital data on potential borrowers enables
better scoring of applicants and helps manage the default rate
• KYC requirements: In person KYC requirements limit the expansion of tech-led
models and new entrants, that don’t have a physical channel they can leverage
• Interest rate caps: Regulation on interest rates that considers digital short term
loans in the same light as annual or multiannual loans can make the business
model for small liquidity loans unsustainable, as interest is only charged for short
periods of time and on small amounts
• Lending license requirements: Simplified processes to get lending licenses can
enable new players to enter the market without requiring a partnership with a
bank, increasing the competition
There are several factors that affect the business model and impact
the growth and evolution of the market
14
15. • Digital Credit does not seem to be a passing fad, it is growing and becoming
more mainstream, offering banks and other formal FIs a role in developing the
digital ecosystem
• Digital Credit offers a source of revenue for providers and a clear value
proposition for customers, and therefore it has the potential to be a gateway
product that strengthens the digital ecosystem by bringing in more users and
providers to the space
• It is leading to a new kind of credit market, where Telcos, banks, MFIs and
Fintechs are participating, for a product that did not exist before but can fill an
important need for low income customers
• This new market poses new challenges for customers, providers and regulators,
as it follows a different business model, it evolves at a fast pace and it attracts a
more diverse group of players
Key takeaways
15