Call for evidence on the European Commission mandate regarding the PRIIPs Regulation

In Europe there are many PRIIPs that retail investors can purchase. In the area of structured products (PRIPs) alone, there are more than 1.5 million of them.

Regarding the use of the Key Information Documents (KIDs) to choose or compare between the products that banks offer to their clients, we believe that they do not play a role in product selection per se; there are other sources of information and the KIDs, which are designed for retail investors, are not suitable as a basis for product comparisons by the sales offices. For product approval purposes, the sales offices have designed separate technical solutions to obtain the required information. These tools allow, for example, the filtering of products according to certain product designs such as capital protection or certain underlings. However, there are individual contents of the KIDs that are used by the institutions for product selection. This includes, for example, the SRI, which is also used for the target market under MiFID II product governance.

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ESMA's review of the MiFID II best execution reports

The RTSs 27 (and 28) currently regulates the best execution reporting by execution venues and investment firms.

We understand that the crucial question for RTS 27 reports is if these reports should be re-instated. Based on the evidence we have with these reports so far, we do not think that they provide meaningful information which justifies the efforts of producing these reports. Neither have these reports been widely used by prospective recipients so far (measured by observed page views) nor are they helpful for investment firm’s own decisions to determine suitable best execution venues. We do not expect that the proposed modifications of RTS 27 reports would change that. Therefore, we welcome the European Commissions’s proposal to delete the Art. 27 (3) [RTS 27] as part of the Capital Markets Union package.

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Joint declaration on remote work and new technologies

On 7 December 2021, the European Banking Social Partners signed a Joint Declaration on Remote Work and New Technologies. The spread of the Covid-19 pandemic and the constantly increasing use of digitalised systems and processes led the Social Partners to reassess and appropriately update our approach to remote work in the European Banking sector.

In adaptable pattern of remote work, which allows for both higher productivity and an improved work-life balance, is a key aspect of the current and future ways of working. Therefore, UNI Europa Finance together with the EBF’s Banking Committee for European Social Affairs (EBF-BCESA), the European Savings and Retail Banking Group (ESBG) and the European Association of Co-operative Banks (EACB), worked together to ensure that employees’ and employers’ interests are safeguarded in these continuously changing working environments.

UNI Europa Finance President Michael Budolfsen said: “With remote work increasing at a rapid pace during Covid and beyond, it is opportune for the European Social Partners to come together to ensure this new way of working will stimulate a good work-life balance and not have a negative impact on the sector and its workers”.

UNI Europa Finance Director Maureen Hick added: “UNI Europa Finance welcomes the signing of this Joint Declaration and the commitment made today that remote work will not lead to any significant changes to bank employees’ rights and conditions and should be a topic of collective bargaining at all levels”.

Jens Thau, Chairman of EBF-BCESA, pointed out: “Banks and its employees have a strong track record of embracing new developments and putting them to work for their clients. The new Joint Declaration underscores the social partners’ commitment to responsibly shape this process of transformation.”

Michael Kammas, Vice-Chairman of EBF-BCESA highlighted: “The expertise of the Social Partners is pivotal when it comes to address new ways of working. This new Joint Declaration not only comes in the most appropriate time due to the pandemic and the continuous technological advancement, but it also shows the Social Partners’ ability to work together and agree on common approach encompassing all the significant aspects of Remote Work to ensure banks’ competitiveness and adaptability to the digitalized world of work.”

Peter Simon, Managing Director said for ESBG: “The Social Partners continuously strive for stable working conditions in accordance with the greater working situation. The Covid-19 crisis has escalated the need to establish good teleworking practices and adapt many roles to remote work. This Joint Declaration strengthens our commitment to employees to provide a secure environment”.

Nina Schindler, CEO of EACB explained: “The Social Partners’ agreement on the Joint Declaration on Remote Work is an effective and timely response to changes in working conditions. By signing this Joint Declaration, we demonstrate as the EACB our intent to safeguard the interests of European co-operative banks’ employees.”

The Social Partners have always proactively engaged with the effects of digitalisation. This new Joint Declaration builds on our previous commitments on Telework (2017) and on the Impact of Digitalisation on Employment (2018) by focusing on remote work as a specific type of adaptation to the way of working in the digitalised era. Understanding, shaping and keeping up with technological developments are very much at the heart of the European Social Partners’ approach in order to contribute to a strong and resilient banking industry.

To this end, the Social Partners have agreed to a common understanding regarding key aspects of remote work. These include collective trade union rights, health and safety, work-life balance, working hours and the right to disconnect, digital rights, resource and equipment costs, and access to training and career development.

This Joint Declaration on Remote Work and New Technologies is another significant achievement for the European Banking Social Partners, showing our continued commitment to engage together in current issues of common interest and adding our unique knowledge and contribution to the general debate on digitalisation.

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Digital platforms serving the agricultural sector

Scale2Save Campaign

Micro savings, maximum impact.

BRUSSELS, 18 November 2021 - The World Savings and Retail Banking Institute (WSBI) programme for financial inclusion, Scale2Save, launched today ‘A case study on digital platforms serving the agricultural sector’, the fifth of its State of the Savings and Retail Banking Sector in Africa research series.

This new publication, co-authored with FinMark Trust, an independent non-profit trust for making financial markets work for the poor, explores the topic from the point of view of Financial Service Providers (FSPs). It aims to answer two key questions FSPs must consider when weighing whether to launch an online platform for farmers: Why should I participate – and if I do, what must I keep in mind? This case study looks at a variety of African agricultural platform providers and more closely at three platform models: bank-led (First City Monument Bank in Nigeria), fintech-led (DigiFarm in Kenya) and telco-led (EcoFarmer in Zimbabwe).

The emergence of digital platforms serving farmers in Africa is of enormous importance as the agricultural sector employs more than half of the continent’s labour force, and accounts for almost 20% of the continent’s gross domestic product.

Platform models are still very new in the agricultural arena. However, the use of platform services to support smallholder farmers has blossomed. During the pandemic they proved a valuable lifeline, enabling farmers to stay in touch with their value chain partners, from financial service providers to farm input suppliers and off-takers.

Looking forward, agricultural digital platforms clearly have the potential to play a powerful role as a catalyst for financial inclusion and to transform the food sector into a more inclusive one that offers viable opportunities for smallholder farmers.

This case study is guided by the overarching objective of the WSBI research series, which is to inform FSPs about developments in the finance industry that affect services to low-income customers.

WSBI’s Scale2Save programme is a six-year partnership with the Mastercard Foundation.

The publication is available for download free of charge here.

Downloads

Case study cover

The publication is available for download here.

FULL CASE STUDY - ENFULL CASE STUDY - FRALL CASE STUDIES

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Isidro Fainé re-elected as WSBI president

Isidro Fainé, president of “la Caixa" Banking Foundation, was re-elected for another three years as president of World Savings and Retail Banking Institute (WSBI) at the organisation's 2021 General Assembly, held in Paris. The Institute's Managing Director will be Peter Simon of Germany.

WSBI members devote 1.8 billion dollars annually to the fight against poverty and social inequality.

The priorities for the coming years are: financial inclusion, promoting sustainable finance, innovation and embracing digitisation to forge ever-closer relations with customers, and strengthening solvency within the framework of Basel IV.

Besides Isidro Fainé and Peter Simon, the WSBI President’s Committee is formed by Dominique Goursolle-Nouhaud, president of the Fédération Nationale des Caisses d’Epargne (France); Rebeca Romero Rainey, president & CEO of the Independent Community Bankers of America (USA); Macario Armando Rosales Rosa, president of Fedecrédito (El Salvador); Helmut Schleweis, president of the German Savings Banks Association (Germany); Isara Wongrung, executive vice-president of the Government Savings Bank (Thailand); and Redouane Najmeddine, chairman of the Management Board of the Banque Al Barid (Morocco).

The members of the Assembly of this Institute, which represents the interests of 6,500 savings banks and retail banks in more than 60 countries, unanimously re-elected Isidro Fainé as WSBI president for the next three years. Peter Simon of Germany will be managing director over the same period.

The priority lines of action established for the coming years include financial inclusion, promoting sustainable finance (reflecting the fact that WSBI member institutions are characterised by their social commitment to the communities in which they operate), exchanges of good practice in the implementation of the new Basel IV solvency framework, and innovation, seeking to make digitalisation a tool to bring members closer to customers.

In his speech, Isidro Fainé noted that, “over the coming years, we will have to address major challenges: economic recovery, increasing inequality, demographic changes that will put pressure on natural resources, climate change, sustainability… The urge to help the most vulnerable and strengthen the community forms part of our members’ DNA: members’ social contributions stand at some 1.8 billion dollars per year, aimed at fighting poverty and social exclusion”.

During Isidro Fainé’s first mandate as president (2018-2021), the organisation focused on the following issues:

1) Promoting financial inclusion:

The WSBI has exceeded the targets set by the World Bank in its commitment to Universal Financial Access (UFA2020), increasing the number of banked people by 329 million between 2014 and 2020. Moreover, the organisation’s cooperation with the Mastercard Foundation was strengthened, leading to the launch of such initiatives as Scale2Save, focused on promoting savings in Africa. Collaboration also began with the Profuturo digital literacy project to promote financial education in developing countries.

2) Increasing dialogue with international organisations:

In response to the crisis caused by the pandemic, the WSBI has focused on promoting economic, fiscal and social measures before regulators, aimed at establishing a flexible framework that enables both a successful recovery from the crisis and that the new demands that arise as a result can be satisfied.

3) Encouraging cooperation among members:

The World Savings and Retail Banking Institute is formed by four regional groups (Europe, Asia-Pacific, Africa, and North America/Latin America/Caribbean). The coronavirus crisis has resulted in increased exchanges of good practice in responding to the financial needs of all types of groups, institutions, large enterprises, SMEs and families.

The World Congress also renewed the mandates of the other statutory bodies, including the Coordination Committee. Antonio Romero, Corporate Director of Association Services and Resources at CECA, was elected as chair of this committee, which coordinates the associated activities of the WSBI and the European Savings and Retail Banking Group (ESBG). Similarly, Joan Rosàs, Director of International Institutional Relations at CaixaBank, was appointed as the representative of the WSBI Board for International Relations. This representation strengthens the participation of the Spanish banking sector in European and international working groups.

Founded in 1924, the WSBI represents the interests of 6,500 savings and retail banks around the world. WSBI members have total assets of 15 trillion dollars, employing 2.2 million workers and serving some 1,400 million customers in 63 countries, with a network of 221.577 offices providing banking services all types of groups, institutions, large enterprises, SMEs and families.

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Digitalisation of financial service providers to serve low-income customers

Scale2Save Campaign

Micro savings, maximum impact.

New Scale2Save case study: BRUSSELS, 30 September 2021 - The World Savings and Retail Banking Institute (WSBI)’s programme for financial inclusion, Scale2Save, launched today ‘A case study on connecting with low-income customers through digitalisation’, part of its State of the Savings and Retail Banking Sector in Africa research series.

Digitalisation is revolutionising the way financial service providers conduct their business. In Africa, the spread of mobile phones over the past two decades allowed the development of new forms of mobile transactions. Now digitalisation of African financial service providers is entering a new phase, as the widening use of mobile phones to access the Internet enables the roll-out of profitable digital services for low-income customers.

This new publication, co-authored with FinMark Trust, explores the answers to a question that many executives are asking: How best to digitalise a financial institution? The case study draws upon management consulting literature to assess digitalisation strategies in a pragmatic way. It also assesses three leading African financial organisations against this framework: Al Barid Bank, Morocco; Equity Bank, Kenya; and Consolidated Bank, Ghana.

The aim of this publication, as of the Scale2Save programme, is to identify the elements for financial service providers to serve low-income people and therefore boost financial inclusion. By opening the doors of remote access to formal savings and payments to people long excluded from them, these new customers get opportunities to improve their economic situation. They are enabled to smooth consumption, build assets, prepare against risks and improve their ability to cope and recover from shocks. In the context of Covid and its consequences, this case study highlights the importance of speeding up digitalisation by financial services providers not only in their service offer but also as dynamic organisations and as part of a digital financial ecosystem. It also underscores customer centred initiatives as a key to success.

WSBI’s Scale2Save is a six-year partnership with the Mastercard Foundation.

Downloads

The publication is available for download here.

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ECB announces members of Digital Euro Market Advisory Group

ECB appoints 30 senior business professionals with proven experience. Members to advise Eurosystem on design and distribution of potential digital euro. Meetings of group to be held at least quarterly, starting in November 2021.

25 October 2021 – The European Central Bank (ECB) has today announced the members of the Market Advisory Group for the digital euro project.

The Eurosystem’s High-Level Task Force on Central Bank Digital Currency called for expressions of interest on 14 July, following the Governing Council’s approval of the digital euro project investigation phase. After assessing applications, the selection committee appointed 30 senior business professionals with proven experience and a broad understanding of the euro area retail payments market.

“I am pleased that many high-quality experts from the private sector are willing to contribute to the digital euro project”, says ECB Board Member Fabio Panetta, Chair of the High-Level Task Force.

“Their expertise will facilitate the integration of prospective users’ and distributors’ views on a digital euro during the investigation phase.”

Members of the Market Advisory Group will act in a personal capacity, advising the Eurosystem on the design and distribution of a potential digital euro from an industry perspective, and on how a digital euro could add value for all players in the euro area’s diverse payments ecosystem. A representative from the European Commission and representatives from Eurosystem national central banks will also participate in the group.

Meetings are to be held at least quarterly, starting in November 2021, and written consultations will be organised between meetings. The issues identified will also be considered in the Eurosystem’s established forum for institutional dialogue on retail payments, the Euro Retail Payments Board (ERPB). The ERPB consists of high-level representatives of industry associations and represents a wide range of stakeholders. In addition, the Eurosystem will engage with the public and merchants through dedicated surveys (e.g. of focus groups) and will continue to hold technical workshops with the industry.

Members of the Digital Euro Market Advisory Group:

Aleksander Kurtevski, Managing Director, Bankart
Alessandro De Cristofaro, Director Digital Innovation Strategy, CRIF
Antonio Macías Vecino, Head of Payments Discipline, BBVA
Axel Schaefer, Payment Regulation and Innovation Specialist, Ingka Group (IKEA)
Cristian Cengher, Product Owner Cross Border Payments, Erste Group Bank AG
Cyril Vignet, Project Manager Innovation, Banque Populaire Caisse d’Epargne
Diederik Bruggink, Head of Payments and Innovation, European Savings and Retail Banking Group
Etienne Goosse, Director General, European Payments Council
Fanny Solano, Director Digital and Retail Regulation, Transparency and Implementation, CaixaBank
Fernando Rodríguez Ferrer, Head of Business Development, Bizum
Gerard Hartsink, Chairman, ICC DSI Industry Advisory Board
Inga Mullins, CEO, Fluency
Jens Holeczek, Head of Digital Payment Unit, National Association of German Cooperative Banks
Jochen Siegert, Managing Director, Global Head of Asset Platforms, Deutsche Bank AG
Nicolas Kozakiewicz, Chief Innovation Officer, Worldline
Nilixa Devlukia, CEO, Payments Solved
Nils Beier, Managing Director, Accenture Strategy & Consulting
Paul Le Manh, Advisor to CEO, EPI Interim Company
Piet Mallekoote, Former CEO, Dutch Payments Association
Régis Folbaum, Head of Payments, La Banque Postale
Roberto Catanzaro, Chief Strategy and Transformation Officer, Nexi Group
Ruth McCarthy, Managing Director, FEXCO Corporate Payments
Sean Mullaney, Head of Payment Engineering, EMEA Payments, Stripe
Silvia Attanasio, Head of Innovation, Associazione Bancaria Italiana
Sofia Lindh Possne, Senior Advisor, Group Regulatory Affairs, Swedbank
Stefano Favale, Head of Global Transaction Banking, Intesa Sanpaolo
Teresa Mesquita, Chief Marketing and Product Officer, SIBS Forward Payment Solutions
Valdis Bergs, Chairman of the Board, Mobilly sia
Ville Sointu, Head of Emerging Technologies, Nordea
Yves Blavet, Open Banking Director, Société Générale

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The EU Commission’s proposed ‘single-stack’ approach for Basel III finalisation would harm European banks

ESBG also calls for a proportionate implementation of the Basel III framework in the EU banking system to ensure that Europe’s diversified banking sector continues to foster economic growth.

BRUSSELS, 27 October 2021 – The European Savings and Retail Banking Group (ESBG) calls on the European Parliament and the Council of the EU to reconsider the output floor implementation on a ‘single-stack’ approach included in the European Commission’s proposal for the finalisation of the Basel III standards in the EU, announced today.

The ‘single-stack’ approach would mean applying the output floor to EU-specific capital requirements, on top of internationally agreed ones. ESBG calls for the use of the ‘backstop approach’, meaning applying the floor only to internationally agreed capital requirements. The ‘backstop approach’ would help preserve and strengthen the EU’s diverse banking system. Otherwise, the ability of Europe’s diversified banking sector to provide finance to the real economy and foster economic growth could be hampered.

“ESBG and its members believe that the Co-legislators should implement the Basel III framework adapting it to the specificities of the European banking market, where needed. This includes an application of the output floor that does not exceed what is explicitly laid down in the agreement on the finalisation of Basel III”, said Johanna Orth, Chair of ESBG’s Task Force on Basel.

The package of reforms to finalise the Basel III framework is designed for internationally active banks. Therefore, when implemented within the EU regulatory framework the EU special features should be considered, including those which are already enshrined in the banking regulation. In particular, the so-called SME supporting factor should be retained, as it provides the right incentive to stimulate real economic growth.

“The implementation of the Basel standards within the EU regulatory framework should reflect the proportionality principle, taking into consideration the risk nature, scale and complexity of the activities of European credit institutions”, said ESBG Managing Director, Peter Simon.

This would allow financial institutions to carry out their activities under a non-detrimental regulatory framework which strengthens the European banking sector – the backbone of the EU’s ‘real economy’. A disproportionate regulatory weight also would negatively impact banks, which would be overburdened with regulatory requirements that could even push resources away from customer service.

The EU banking sector’s diversity ensures that a full range of services is offered to customers at competitive prices, in particular by banks that focus on SMEs, households and local communities.

In this context, ESBG is looking forward to bringing the voice of its members to the upcoming legislative process. We believe that close cooperation among all stakeholders will be indispensable for the successful implementation of the finalised Basel III standards. We encourage the EU decision-makers to make full use of the discretions envisaged in the Basel III text, including those on operational risk, which will be crucial for continuous and solid credit provisions to the real economy after the implementation phase.

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A digital platform to financially include farmers in Côte d’Ivoire

Scale2Save Campaign

Micro savings, maximum impact.

On the occasion of World Savings Day 2021, the Scale2Save programme of the World Savings and Retail Banking Institute (WSBI) highlights the work for financial inclusion it does with its partners in Africa.

In the framework of Scale2Save, Advans Cote d'Ivoire, a microfinance institution, has developed a digital platform with the aim of taking down the barriers that small-holder cacao farmers face to access financial services and further develop their economic activities.

The challenge of access to financial services for rural populations

In Côte d’Ivoire financial inclusion remains a major issue as 44% of adults have never used formal or informal financial services.
Among the most affected are the socially disadvantaged and excluded layers of people, in particular women, the poor and those living in rural areas.

It is important to point out that the poor financial education and the cost of financial products are all obstacles to access to financial services.
In 2017, Global Findex data also focus on the unbanked population. Indeed, the 2017 figures show that 8 million adults in Côte d’Ivoire do not have an account at a financial institution. Out of eight million unbanked individuals (59% adults) there are 52% women. The most common form of savings is home savings.

How to change this? The agricultural sector appears to be one of the sectors with great potential for financial inclusion. Indeed, smallholder farmers express the desire to acquire financial products for their households and their activities. However, very few have access to these products. (Source APIF2019 report).

Advans, an international microfinance group present in nine countries including Côte d’Ivoire is a financial player committed to the financial inclusion of producers in rural areas. Our institution works for access to quality financial services, adapted and accessible to all these populations living in rural areas.

Our innovative project, Customer Corner, a digital application

In the framework of the Scale2Save programme, Advans Côte d’Ivoire has developed an application called Customer Corner, assisted by the Senegalese FinTech Obertys. This application is available from our banking agents, a field team dedicated to agricultural producers. Our agents travel to meet agricultural producers. The opening of savings accounts is done by the banking agent from his smartphone. It takes only a few minutes.

This application now allows producers in rural areas to open their savings accounts on the spot, without paying opening fees, and without having to go to our branches. Once the savings account is opened, the producer can carry out transactions with his phone (not necessarily an Android) via a USSD MTN code.

In addition, our field agents assist our producer clients in the management of their savings accounts by visiting them and taking into account all their concerns. The producers are met periodically either individually or within their cooperatives.

By digitalising our financial services, we are faster and more efficient while maintaining the proximity of a genuine customer relationship to better serve producers in rural areas. We believe in the digitalisation of the customer journey coupled with a personalised proximity approach to better raise awareness and give a human face to the offer of financial services.

As a result, small-holder farmers have access to savings accounts, and are supported in their financial education in order to strengthen their financial security in the short, medium and long term. In October 2021, 80,000 producers were registered in our books for more than 300 million FCFA (Franc of the French Community of Africa) saved, equivalent to about 455,000 euros.

The steps ahead

However, we are facing obstacles in this mission which are:

  • Difficulties in identifying producers: many of these people do not have an identity card, some are foreigners and therefore cannot easily obtain a birth certificate without returning to their country of origin. Without ID, it is impossible to open a bank account or even a mobile money account associated with the account.
  • The lack of an “e-kyc” procedure which prevents the provision of a 100% digital customer experience: electronic signatures, for example, are not authorised.
  • The lack of interoperability between the payment systems of telecom operators implying the cost of developing individualised interfaces for the financial institution but also strong limits on use since it is not always possible to have several phones.
  • The strong culture of “cash” in the rural world within all sectors and mistrust of financial institutions due to unfortunate past experiences.

With digital finance, we are pushing back the barriers of distance, income level, and social factors, however regulations and infrastructure must also evolve if we are to truly include rural populations financially.

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TCB digitalizes savings groups to serve low-income women and youth

Scale2Save Campaign

Micro savings, maximum impact.

On the occasion of World Savings Day 2021, Tanzania Commercial Bank Plc (TCB), a WSBI member and learning partner of its programme for financial inclusion, Scale2Save, shared the experience of working with savings groups in rural areas. TCB developed the digital product M-KOBA to address five main challenges savings groups face. Now, TCB is taking M-KOBA further by targeting Village Savings and Loans Associations.

The development of M-KOBA

Tanzania Commercial Bank Plc (TCB) previously called TPB Bank Plc has always championed financial inclusion by providing services and products to serve the population at the bottom of the pyramid.

TBD conducted a three-year project (2018-2020) with USD 1 million provided by the Mastercard Foundation for the Savings at the Frontier (SatF) programme (Digitizing Informal Saving Mechanisms) and overseen by Oxford Policy Management (OPM). The goal was to bring on board 250,000 customers by 2020 of whom 20,000 would be purely rural. TCB launched the project in 15 locations, all in rural areas. The project led to the development of a pure digital group saving product called M-KOBA.

Launched in January 2019, M-KOBA is a mobile based product meant to facilitate group saving and provides solutions to five challenges that many formal and informal savings groups in Tanzania currently face. These are the challenges and the way M-KOBA addressed them:

  1. Security: Banking through this mobile account, the security of funds of customers is high, compared to the traditional saving mechanisms they normally use.
  2. Transparency: The whole process starting from customer registration to fund transfer (depositing) is transparent in the sense that all group members are involved.
  3. Convenience: The M-KOBA product is very easy for customers to understand and use. With M-Koba, individual members can contribute, apply for a loan and vote through their mobile phones, without physically convening in one place.
  4. Cost effectiveness: All customers transactions via M-KOBA are free of charge except for balance checks which are available for a small fee.
  5. Accessibility: M-KOBA is accessible anytime and anywhere, through the customer’s mobile phone.

Taking it further

To extend the project further, in October 2020, TCB entered into a partnership with Plan International Tanzania (Plan).

Plan is a child centered organization that advances children’s rights and equality for girls. Plan has been working in five thematic areas: Child protection, Maternal, Neonatal and Child Health and Nutrition (MNCH&N), Equal access to basic education, Water, Sanitation and Hygiene (WASH) and Youth Economic Empowerment (YEE).

Plan’s YEE programs have been supporting vulnerable youth, especially young women and their families to improve livelihoods. This through provision of market relevant skills, support formation of Village Savings and Loans Associations (VSLA) and by facilitating linkage to private sector economic opportunities. VSLAs are informal, have simple record keeping, and members have full ownership and control. This methodology enables VSLAs to provide basic financial services to people in remote areas that lack infrastructure. The group members are 80% women and their main economic activity is agriculture. However, VSLAs face some limitations in offering financial services to its members, including:

  1. The safety of the money is not guaranteed, as VSLA save their money in metal boxes at home.
  2. At the initial parts of a cycle, the group has little money, which makes it difficult to meet its members’ credit needs.
  3. At times, when the loan demand is low, the group has excess liquidity and would rather save these excess funds in a bank account, where the money is safe and can earn some interest instead of lying idle.
  4. Since the loans from the group are based on member’s savings, the group is unable to provide larger loans. Also, the tenure of the loans is short, which is not appropriate for investing in income generating activities which have a longer pay-back period.

In order to address these limitations faced by the VSLAs, Plan and TCB entered into a partnership, whereby TCB would provide 2 products:

  1. M-KOBA, a digital form of saving money, accessing loans and sharing earnings to VSLA members. M-KOBA provides security of the VSLAs’ money, increase transparency and simplicity for members to contribute through mobile agency banking M-Pesa. M-KOBA digitalizes the VSLA processes and increases safety by using bank or M-Pesa savings accounts.
  2. Group savings products and potentially/eventually other bank products and services to the VSLAs formed i.e. Group loans and Group Life insurance.

Photos: ​Between August and October 2021 in Isanzu, Nyang’ingi, Sangabuye and Laela villages, saving group representatives met with TCB and Plan team to be trained on how to use M-KOBA, group loans application processes and life insurance.

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