Homefield advantage: Learning from the popularity of local financial services providers

In the six countries where MAP was piloted, informal financial services persist despite an explicit push both globally and within the MAP countries to migrate consumers towards formal financial services. While it is increasingly acknowledged that informal services often offer benefits that formal services do not (such as accepting informal means of collateral like gold or jewellery, or providing more flexible terms), the persistence of informality is still commonly attributed to people having little to no alternative. Homefield advantage – learning from the popularity of local financial services providers is the third note to be published from the Global Insight series and shows there is increasing evidence that consumers rely on informal services even when they have access to formal alternatives. Why, despite the best efforts to increase usage of formal financial services, is this the case?

Cenfri's Hennie Bester talks us through MAP's discoveries:

 



Note 3 shows that the widespread use of informal financial services has less to do with the fact that they are informal than with the value that clients derive from the local nature of such services. It explores the prevalence – and persistence over time – of locally delivered financial services across the six MAP pilot countries. It creates a new distinction in financial services – local versus remote – to enhance our understanding of why consumers ultimately prefer to use local financial services.

The MAP Global Insights series attempt to consolidate and synthesise the learnings from the first six MAP pilot countries which have been conducted in Thailand, Myanmar, Swaziland, Mozambique, Lesotho and Malawi.

Additional Info

  • Country: Mozambique, Swaziland, Malawi, Lesotho, Global, France
  • Institution: Cenfri, FinMark Trust, UNCDF
  • Date Published: 2016
  • Document Type: Synthesis Documents
  • Author/s: Christine Hougaard, Hennie Bester, Jeremy Gray, David Saunders

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Homefield advantage: Learning from the popularity of local financial services providers

In the six countries where MAP was piloted, informal financial services persist despite an explicit push both globally and within the MAP countries to migrate consumers towards formal financial services. While it is increasingly acknowledged that informal services often offer benefits that formal services do not (such as accepting informal means of collateral like gold or jewellery, or providing more flexible terms), the persistence of informality is still commonly attributed to people having little to no alternative. Homefield advantage – learning from the popularity of local financial services providers is the third note to be published from the Global Insight series and shows there is increasing evidence that consumers rely on informal services even when they have access to formal alternatives. Why, despite the best efforts to increase usage of formal financial services, is this the case?

Cenfri's Hennie Bester talks us through MAP's discoveries:

 



Note 3 shows that the widespread use of informal financial services has less to do with the fact that they are informal than with the value that clients derive from the local nature of such services. It explores the prevalence – and persistence over time – of locally delivered financial services across the six MAP pilot countries. It creates a new distinction in financial services – local versus remote – to enhance our understanding of why consumers ultimately prefer to use local financial services.

The MAP Global Insights series attempt to consolidate and synthesise the learnings from the first six MAP pilot countries which have been conducted in Thailand, Myanmar, Swaziland, Mozambique, Lesotho and Malawi.

Additional Info

  • Country: Mozambique, Swaziland, Malawi, Lesotho, Global, France
  • Institution: Cenfri, FinMark Trust, UNCDF
  • Date Published: 2016
  • Document Type: Synthesis Documents
  • Author/s: Christine Hougaard, Hennie Bester, Jeremy Gray, David Saunders

Search news, publications and events