Over 2 billion people around the globe live without access to basic financial services. Getting hooked into the financial mainstream may begin with simple checking and savings accounts, but access to financial services goes beyond that. While deposit accounts are just one rung in the ladder toward building financial security, they also serve as access points to other finance vehicles such as small loans or lines of credit to start or grow a business.
A number of funders are interested in this area right now, and we're keenly tracking who's doing what.
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One important player is the MetLife Foundation, which in 2013, announced its $200 million plan to launch a global campaign for financial inclusion in low-income communities in Asia, Europe, Latin America, the Middle East, and the U.S. It isn’t unusual for such big commitments to roll out at a relatively slow pace, but just a short time after announcing its multi-million-dollar financial inclusion plan, the foundation has made some considerable progress.
Two years into its five-year program, the MetLife Foundation has already committed nearly $70 million toward its goal of helping people access affordable financial services while also increasing their personal finance knowledge. We recently got in touch with Nandika Madgavkar, assistant vice president of corporate responsibility at MetLife to discuss the foundation’s financial inclusion journey.
At the outset of the initiative, the MetLife Foundation released the first round of grant money through its new program, tapping organizations such as ACCION International, Corporation for Enterprise Development, the Consultative Group to Assist the Poor, Local Initiatives Support Corporation, Pro Mujer and Women’s World Banking. These particular organizations were chosen largely based on their ability to work within local communities to develop financial inclusion strategies and to effectively deliver related services to those who currently lack access. The overall hope of the foundation, according to Madgavkar, is to “impact at least 2 million lives” when it ends its five-year financial inclusion run.
Like-minded global financial institutions aren’t the only players on the MetLife Foundation’s financial inclusion field. It recently partnered with the Wall Street Journal to launch the "Financial Inclusion Challenge,” a two-year global project initially launching in Asia. The challenge is managed by the Journal and is part of its "Financing the Future" program, a major editorial initiative in which the paper provides news, statistics, and other financial inclusion insights.
Another large undertaking at the MetLife Foundation is its newly developed Optimizing Performance Through Improved Cross Sell, or OPTIX program. In partnership with Bankable Frontier Associates and Rockefeller Philanthropy Advisors (RPA) the OPTIX program will help microfinance institutions (MFIs) better serve their clients.
The OPTIX program will help the chosen MFIs located in Mexico, Columbia, Bangladesh, and Vietnam introduce financial products to the clients it serves, as well as help them secure the MFIs position against larger competitors. This is a win for both sides of this banking coin, as smaller, local institutions are often better able to address and serve the needs of the communities in which they operate.
Madkvgar shared some insights to the OPTIX program, further explaining that the program is “Enabling our nonprofit partners on the ground with the right products so that when they go out to market they are able to maximize the value for their clients and they’re meeting the needs of the client.” Rather than financial institutions offering products they think their clients need, the OPTIX program allows them instead to tailor its product offerings based on the actual input from, and needs of, the clients.
When the MetLife Foundation announced its jump into financial inclusion, Dennis White, president and CEO of the foundation, commented that one of the overall goals of the initiative was to meet its clients’ financial needs holistically. Based on its work so far, the MetLife Foundation is making significant progress toward completing its full-circle financial inclusion goals.
As Nandika Madgavkar puts it, financial inclusion "...has to come with giving people the knowledge but also giving them the products and the tools. Because if we don’t have that, then the knowledge is as good as the classroom you’re sitting in. It’s no good giving you the education if you can’t go open a bank account because it’s just too expensive."