Financial Services

Poor families around the world face various financial challenges and have differing financial needs. Their income may be irregular and varied – generated from different sources throughout the year or even in the span of a single day. A bad crop yield, a sick child, the death of a parent can quickly topple a family’s financial balancing act. Managing these complicated demands to achieve short- and long-term goals requires a full range of financial services designed with the customer firmly in mind.

Here are just a few examples of the diverse financial needs of poor people (there are many more):

  • Many smallholder farmers need financing for fertilizer or seeds;
  • Some observant Muslims need products that do not use interest;
  • It is common for women to need a way to save discreetly;
  • Youth often benefit from small-value savings accounts;
  • City laborers need convenient ways to send money to family members in remote areas.

Photo Credit: Nayan Sthankiya, 2013 CGAP Photo Contest

Given financial needs such as these, poor customers need to be able to access and effectively use a range of financial services to improve their lives and to truly experience financial inclusion. The basic basket of products generally are savings, credit, payments, remittances, insurance and pensions.

More and more providers in recent years have attempted to expand offerings, but not without challenges. Traditional microfinance institutions have found it difficult to go beyond credit. While digital financial services show great promise, payments are the only digital financial service that has reached scale so far. The business case for offering products such as insurance and small-balance savings is not always obvious. In all scenarios, providers struggle to go beyond adoption to active use of a product or service (e.g. only 30 percent of registered mobile money accounts globally had been used at least once in three months).

CGAP over the last few years has worked with financial service providers and their customers to better understand what it takes to create and offer financial services that poor customers truly value and will actively use. Using new methods of products innovation, including an approach known as Human-Centered Design, CGAP came to better understand the limitations of product design alone. Creating and offering poor customers services they will adopt and actively use comes down instead to customer experience. Customer experience includes products but also encompasses channels, customer service, customer empowerment and much more.

CGAP continues to work with providers and customers to further study and define the elements of customer experience. Recognizing that no one type of provider will be able to overcome the very different business model challenges of specific products, CGAP also seeks to encourage the development of an ecosystem of financial service providers that serve low-income markets effectively and sustainably.



02 February 2017
This Brief takes a look at India's financial inclusion effort--the Prime Minister’s Jan Dhan Yojana (PMJDY) program--two years since it launched in August 2014.
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English (4 pages)
20 April 2016
This paper draws upon formative research, “resilience diaries,” qualitative follow-up, and economic games to illustrate how families anticipate and cope with shocks in Burkina Faso. Designing for these household behaviors and preferences could improve financial services offered for building resilience.
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English (48 pages)

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