Application of CGAP Customer Outcomes Framework in Uganda
Scale2Save Campaign
Micro savings, maximum impact.
The case study has applied the CGAP customer outcome indicator framework to test the impact of a new basic savings product positioned in the financial inclusion market and designed to encourage digital and/or remote account opening and transactions.
As a member of the WSBI and part of the Scale2Save program, a prominent retail bank volunteered this product for a case study.
The objective was to assess if the CGAP customer outcome indicator framework could be applied as a measuring tool to determine whether or not:
- The design, positioning, performance and management of the product are working as intended;
- The product is indeed improving the lives of target customers;
- The bank is contributing to Uganda’s Financial Inclusion goals.
The CGAP customer outcomes indicators are generated from supply-side data and can be used internally by providers to measure their levels of customer-centricity. The ultimate objective, however, is for the jurisdiction’s authorities to have a quantifiable, comparable and consistent way to:
- Detect which strategies, policies, practices, activities, products/services work for or against the customer;
- Assess the impact of financial services at a market level for all customer segments; and
- Determine if, and to what extent, providers in the sector are improving or detracting from national goals.
Since the focus of the Uganda case study is Financial Inclusion, focusing on savings, the jurisdiction-specific context was informed by the Bank of Uganda’s (BoU) Financial Inclusion Strategy, 2017. The five main strategic goals classified twenty gaps that the BoU had set out to address. These gaps were therefore used as the basis to map the global CGAP indicators to Uganda’s context.
Download the case study here
Scale2Save
Driving formal savings: What works for low-income women
Scale2Save Campaign
Micro savings, maximum impact.
Gender-inclusive products need to be designed with women’s needs in mind. Yet, the real question remains: What services do female customers value, prioritize and need? This learning paper aims to contribute to the growing evidence base around this topic, building on findings from a recent Scale2Save Customer Research.
While financial inclusion is expanding globally, the gender gap in access to financial services and products persists. To close the gender gap in financial inclusion and improve women’s meaningful use of financial services, there is a clear need for financial service providers to transition toward gender-aware strategies to build tailored products that create opportunities for women and lower barriers in their lives.
This paper found that by carefully crafting the customer experience for women, financial service providers considerably amplified the adoption of formal savings products, thus significantly expanding their customer base while also contributing to financial inclusion for a traditionally excluded customer segment, such as women.
Scale2Save is WSBI’s most recent programme for financial inclusion. It operated in six African countries.
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Scale2Save
Digital Financial Inclusion in Nigeria and Uganda: opportunities and remaining challenges
Scale2Save Campaign
Micro savings, maximum impact.
Earlier this year, the World Savings and Retail Banking Institute (WBSI) programme for financial inclusion, Scale2Save, through the support of the Mastercard Foundation, hosted in-person knowledge exchange
events in Nigeria and Uganda. The workshops were attended by practitioners and experts from the financial sector, research institutions, civil society, and the media. Across the two events there were many
interesting discussions, however, the potential and challenges around digital financial inclusion (DFI) was a recurring theme across the two events. In this note we summarize key challenges and opportunities
for digital financial inclusion discussed during the two events as well as examples from Scale2Save partners and publications.
Authors: Amy Oyekunle and Daniel Joloba
This note was prepared by the Mastercard Foundation Savings Learning Lab, a six-year initiative
implemented by Itad to support learning among the Foundation’s savings sector portfolio programmes:
Scale2Save and Savings at the Frontier
DFI means providing digital access to formal financial services to excluded and underserved populations. Digital technology has played a significant role in changing the sector and advancing financial inclusion in recent years. This was particularly true during the COVID-19 pandemic, which saw an increased uptake of cashless services and clients using e-banking services, including mobile banking, Point-of-sales (PoS) transactions, and card payments. The Nigeria Inter-Bank Settlement Systems (NIBSS) estimates the volume of ATM transactions has grown exponentially in the last six years, more than doubling since 2015 to over 850M in 20191 and USD 340,314 mobile payments per day in Uganda by 20212 Additionally, data from Bank of Uganda (BoU)3 indicates that the number of active debit cards increased by 12.4% from 2.59m in March 2021 to 2.91m in March 2022 while debit card transaction volumes increased by 28.01% from 4.4 million transactions in March 2021 to 5.68 million in March 2022. Credit card transaction volumes increased by 62% from 142,350 to 230,910 transactions over the same period. However, there is an indication that digital transactions are declining and returning to pre-Pandemic levels and there are still challenges that need to be overcome if digital is to deliver on its transformational potential. Challenges such as the limited interoperability for card payments as well as cyber security threats still hamper the wider use of the digital platform
What are those challenges, and why do they matter
Digital platforms can expand access to financial services, but they also exclude. Access to financial services, particularly digital financial services is highly gendered and fraught with inequalities Usage of digital accounts remains low: there has been a steady increase in digital accounts being opened
– 45.3 million bank accounts were opened in Nigeria in January 20226Infrastructure for digital transactions can be a barrier to access DFS: connectivity, electricity and
infrastructure required for digital financial inclusion are not always present or reliable in rural areasRegulations have improved but are still a barrier to many potential customers: Even though the Central
Bank of Nigeria (CBN) has simplified the Know-your-client (KYC) regulations required for clients to open
accounts through the three-tier system of using the Bank Verification Number and National IdentificationNumber (NIN), FSPs say this is still a challenge.Risks associated with digital transactions are high: Increased cases of accidental transactions and
security breaches associated with telcos and mobile apps are a deterrent to customers, diminishing trust
in an already fragile ecosystem.
Scale2Save
Driving financial resilience through formal savings among the low-income population
Scale2Save Campaign
Micro savings, maximum impact.
This paper provides a syntesis of research findings that help understand to what extent savings allow customers to increase financial resilience, being a key learning question for the programme.
For customers unable to use savings to cope with shocks, they primarily faced physical and service related challenges to using their savings for resilience purposes, in addition to barriers posed by the product features.
Approximately 70% of the FSP’s customers reported having used part of their savings.
FSP's customers using their savings
The research observed notable differences in financial security between young adults and older adults; young adults were more frequently unemployed, studying, or working temporary jobs compared to older adults. This was also reflected in reported incomes, as a higher proportion of young adults are earning less than
or around the national minimum wage in the target countries than older adults. Young customers were more likely to have been saving informally (42%), or not saving at all
(15%) prior to opening their savings accounts, compared to adult customers. This underlines the program’s impact in deepening access to formal savings products for young customers. Young customers were most compelled to save in case of unexpected emergencies, as reported by an average of 44% of them. (By comparison 34% of adults were saving for unexpected emergencies.) Given that the majority of young customers opened their savings accounts during the COVID-19 pandemic and have lower earnings
than adults, it is not surprising that many aimed to establish ‘safety nets’ that would enable them to cope with unforeseen emergencies.
Additionally, about 30% of young customers were also saving toward a specific goal, such as a dowry, celebration, studies, or others. Lastly, a quarter of young customers were saving with the intent of investing in a business. Research commissioned by Scale2Save in 2019 found that young adults exhibited a strong preference for self-employment. Young adults expressed a greater preference for self-employment over a steady job, and this appeared to strengthen with age. This study also found that young adults, and particularly young men seek to diversify their income sources to reduce risk. Together these factors likely contributed to young adults’ increased resilience to provide for their futures.
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Scale2Save
Scale2Save learning paper: Making micro-insurance work
Scale2Save Campaign
Micro savings, maximum impact.
Based on Scale2Save partners' case studies, this learning paper explores the challenges for micro-insurance uptake for low-income customers, and presents solutions and opportunities.
BRUSSELS, 28 April 2021 – Today the Scale2Save programme launches a new learning paper. It forms part of the learning series featuring the experience of partners when developing financial products and services designed for low-income customers. It was written by Scale2Save Local Technical Specialist Agnès Fall with support from the Savings Learning Lab at Itad.
This paper aims to support learning on microinsurance in Africa by giving an overview of the sector and presenting examples on how to successfully overcome challenges related to the uptake of microinsurance while also taking into account future hurdles related to Covid-19 and its impact.
Microinsurance encompasses insurance products that protect against shocks faced by under-served, low-income populations in developing countries. These products are provided in exchange for regular premium payments proportionate to their incomes, which take into account irregular income flows.
Microinsurers increasingly tailor their products, policies and delivery channels to the needs of the poor. Policies are often written in simple terms to include a variety of options such as licensed insurers, health care providers, community-based organisations, microfinance institutions and NGOs. In addition, mobile insurance has become increasingly important to reach remote customers.
While we observe growing demand and access to formal financial services such as bank accounts, mobile money and credit, the demand for formal insurance remains low despite the ‘micro-insurance revolution’ in the past decade.
One of the questions that Scale2Save tries to answer is to what extent savings contribute to financial resilience and what would be there right mix of products that adds value to people’s lives.
The households that Scale2Save partners are serving often experience challenges to manage cash flows, cope with risks, and raise money to meet large, unplanned expenses. These households can benefit from using a combination of financial tools to meet their needs. That is why this learning paper explores the mechanisms that might trigger the uptake of savings-linked health, life or funeral insurance.
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Scale2Save
Savings and Retail Banking in Africa Results from 2019 WSBI survey
Scale2Save Campaign
Micro savings, maximum impact.
Financial Service Providers (FSPs) in Africa continue to operate in dynamic and changing environments. They are partnering and competing with new
technology disruptors, seeking new segments and developing new products in uncertain regulatory environments.
FSPs in Africa need to overhaul their business models and adapt their operations better to an increasingly cost-competitive environment. Our 2019 report reveals that they have identified the low-income market as increasingly viable, responding with new accounts, products and fee structures. But their efforts to win new customers too often fail to appeal, or accounts lapse into dormancy. Mobile is now the channel of choice for reaching the unbanked, and their cost-conscious customers shun fees.
FSPs seem to struggle with taking a customer centric approach, as we concluded in the first
edition of this Scale2Save report on savings and retail banking in Africa released in early 2019. Second, business models may be out of synch with the wave of digitisation sweeping over banking both in Africa and around the globe. They may lack in-house know-how, which may require them to build partnerships with other banks, FinTechs or even BigTechs.
If FSPs in Africa are to serve 21st century, institutions can frame their role and product offer through four main lenses: Usability, Affordability, Accessibility, and
Sustainability. Balancing all four will help FSPs address the need for services that people want that keeps in mind demographic factors, educational levels, geographic situation and data-driven technology. Costs and long-term outlook matter too. Service design, piloting and ramp-up phases in Africa, like anywhere, require strong in-house management. In this report, we expand the scope of financial institutions surveyed, going beyond the WSBI membership footprint. This approach better reflects the landscape of African banking, which serves a vast and swelling African population set to reach 4 billion by century’s end. The 2019 report draws from richer data, folds in case studies that highlight innovation, partnerships and listening to people’s needs on the ground, thinking differently about how to serve customers all while keeping costs in check and return on effort reasonable.
