CARE commits to creating access to formal financial services for 500,000 women globally by 2020 through scaling its tested financial inclusion approach across Africa to Asia. The commitment aligns with CAREs 2020 Strategy that will link a total of 30 million women to financial services and building upon learnings from current programs including Banking on Change, POWER Africa and LINK Up.
Informed by existing outreach in Africa and Asia, CARE will expand the VSLA linkages model and take it to new markets. A five part process is envisaged: 1) form and strengthen VSLAs in communities and have members develop basic group operation and savings skills; 2) once primed, identify mature VSLA groups that are ready for advanced financial literacy and banking training; 3) assess the local financial ecosystem and create relationships with appropriate financial service providers; 4) develop customer-centric financial services and delivery channels that fit the needs of providers and VSLA members; 5) support new financial linkages through ongoing training and monitoring. CARE will also work at industry level in key markets to promote broad-based replication of this successful linkage model.
CARE brings considerable experience in the methodology and will apply a toolkit to support scaling activities that encompasses: training materials, coaching guidelines, and tested mechanisms to link group members to appropriate financial services. In addition, CARE will leverage relationships with banks and mobile network operators (MNOs) across Africa and Asia. These relationships can take years to cultivate in order to deliver products and services that are both pro-poor and beneficial for the private sector. Whenever local conditions permit, CARE will seek to utilize digital financial services to expedite the fulfillment of the commitment.
CARE will staff the commitment with a four-person program team versed in advancing financial inclusion programs and collaborate with a wide network of country office staff with expertise in local market conditions and vast experience implementing field programs.
Promoting formal finance to savings groups is a multi-stage process that can take up to four years to complete. The process includes selecting mature groups, providing education and training on the formal financial system, working with financial institutions to develop products that meet the needs of the groups while protecting their interests, delivering the products to groups, and monitoring the impact.
In order to fulfill a commitment to promote formal finance to 500,000 women globally by 2020, CARE will incrementally build upon its annual targets. The number of women linked to formal financial services annually will be as follows: 25,000 in 2016; 50,000 in 2017; 100,000 in 2018; 150,000 in 2019; and 175,000 in 2020.
During the first three years of the commitment, CARE will focus on new markets that are prime candidates for the model, based on the following criteria: robust agent networks, mobile network penetration, a large number of existing and functioning savings groups (SGs), and enabling bank environments that have favorable know your customer (KYC) procedures to easily open accounts and register groups. CARE will also concentrate on locations where it has existing relationships, primarily East Africa. During this time, CARE will also identify and form relationships in additional markets (West and Southern Africa, Asia) to support the scale needed to achieve each annual target per above.
With the recent adoption of the United Nations Sustainable Development Goals (SDGs), we have marked the beginning of a new era of international development. Gender is a central feature of the SDGs Outcome Document; it is highlighted as a standalone goal (SDG 5), and is integrated throughout the agreement.
In order to advance gender equality targets, CARE is joining a holistic coalition of multi-sectoral partners convened by No Ceilings, Vital Voices, and WEConnect International, focusing on three core issue areas of work: 1) Promoting Womens Economic Participation; 2) Addressing Violence Against Girls and Women; and 3) Advancing Womens Leadership in both Private and Public sectors.
Globally, there are currently 1.1 billion women who lack access to financial services. This gap is driven by a combination of factors: access, affordability, knowledge, and the unique financial needs of women. CARE believes these barriers are surmountable and, as a recognized financial inclusion leader with more than 25 years in empowering unbanked women, is primed to address them. CARE pioneered the village savings and loans association, or VSLA, a community-led and managed financial instrument.
CAREs VSLA model demonstrates that financial services can have dramatic impacts on livelihoods when designed to focus on womens capabilities and needs. In recent years, CARE spearheaded engagement with banks and mobile network operators to enable VSLAs to grow beyond informal finance and (often for the first time) to access formal financial services. CARE works closely with financial service providers, ranging from multi-national banks such as Barclays and digital service provides like Visa Inc. to local community banks, credit unions, and an array of mobile networks to build an inclusive financial ecosystem.
Throughout these efforts, CARE strives to understand the gains that such access means for women as well as demonstrating the business case for service providers to serve under-banked clients. It is now time to take this proven work to scale. With the CGI commitment, CARE will build upon this foundation to take the model to at least 5 new countries (Burundi, Niger, Vietnam, Bangladesh, Cambodia) and scale up in 6 current markets (Kenya, Tanzania, Uganda, Rwanda, Cote dIvoire, Ghana, Ethiopia) .
CARE will pursue relationships with banks, MFIs and MNOs to develop specialized products that would be relevant to the financially excluded women in the region. CARE will look to donors to acquire the necessary funds to conduct outreach, support program implementation and customer-centric product development. CARE is interested in receiving media support to promote and advertise the initiative directly within the 12 countries to reach scale in its financial inclusion efforts linking 500,000 women to formal financial services.
CARE is committed to building partnerships and sharing best practices and tools to scale financial inclusion activities for women. Building upon 25 years of experience in financial inclusion, CARE facilitates a low-cost, self-managed model to grow Village Savings and Loan Associations (VSLAs). As of June 2016, CARE has reached approximately 5 million individuals participating in savings groups in 26 countries. Replicating organizations reach an additional 5 million people. In linking VSLAs to formal finance, CARE created an effective means of advancing financial inclusion while narrowing the gap between mens and womens access to finance. CARE looks forward to working with diverse stakeholders including: financial institutions, mobile network operators, regulatory institutions, donors, and NGOs to fulfill its commitment to link 500,000 women by 2020.