Insight

Latest articles

Outsized launching in the UK Where are banks and insurers bringing in Consultants? Supporting Shriram Life to Innovate and Grow in the Mass-Market Segment Working with LeapFrog Investments to Drive Financial Inclusion African start-up success can be replicated within emerging market financial services The blockchain whirlwind that's shaking up financial services FinTech innovation in the B2B space is finally taking off Insurance is about to get a digital makeover Investors need to stick to their guns when in Emerging Markets Outsized Blog - The boutique revolution Big companies are trying and failing to replicate the start-up approach Emerging markets are going to drive premium growth in insurance Do it right - designing products for lower income consumers The emergence of the 'not-quite middle class' in Africa The emerging age of blockchain within insurance The importance of building strong financial sectors in Conflict-Affected States India is named the world's third largest home of tech startups Omnichannel yes, digital only channels, not for most. RBI enacts initiatives to address emerging FinTech disruptors, including Blockchain technology 2016 Trends for the insurance industry to lock onto Outsized Blog - Levelling the playing field and transforming a $250bn industry Hopeful times for FinTech despite Brexit Social Network banking is on its way The top 10 emerging markets to watch out for FinTechs should not be feared but embraced and cooperated with Payments Banks finally seem to be on the horizon in India What you need to do to ensure real innovation in a world of increasing diruption Could FinTech be the best thing to ever happen to traditional banks? African FinTechs are not disrupting anything It is time for Indian FinTech Start-ups to start solving real world problems Can financial services companies afford not to leverage CSR in emerging markets? Banks and insurers need to go back to the drawing board to address emerging consumers Countries such as India and Nigeria would benefit the most from a cashless world India Post has huge potential to make a breakthough in financial inclusion Opportunities for disruptors as traditional Asia-Pacific banks struggle to maintain growth. Outsized Blog - I don't want a baby sister! Ghana's financial inclusion given a boost from digital financial services Now out of the EU, the UK will be looking to strengthen alliances elsewhere and India may be a good place to start. The workforce of the future and the importance of fluid talent The workforce of the future and the importance of fluid talent A consolidation era is emerging within the Indian insurance sector A consolidation era is emerging within the Indian insurance sector Use of alternative data for credit scoring Use of alternative data for credit scoring Digital disruption - What incumbents need to do to recognise if it's happening and how to adapt to prosper Digital disruption - What incumbents need to do to recognise if it's happening and how to adapt to prosper Competition and valuations increasing for African Private Equity deals Competition and valuations increasing for African Private Equity deals Impact investing - is it a houseboat or a brunch....? Impact investing - is it a houseboat or a brunch....? Is there an impending leadership challenge in emerging markets? Is there an impending leadership challenge in emerging markets? Why East Africa is an Impact Investing Hot Spot Why East Africa is an Impact Investing Hot Spot Mahindra Insurance Brokers looking to cover 2.50 lakh villages in 3 years Mahindra Insurance Brokers looking to cover 2.50 lakh villages in 3 years Facebook’s HR chief conducted a company-wide study to find its best managers – and 7 behaviours stood out Facebook’s HR chief conducted a company-wide study to find its best managers – and 7 behaviours stood out Cultivating present and future leaders with reverse mentoring Cultivating present and future leaders with reverse mentoring How technology is disrupting financial inclusion in India How technology is disrupting financial inclusion in India Modular financial services Modular financial services 7 digital questions for banks 7 digital questions for banks Cutting through the noise around financial technology Cutting through the noise around financial technology The future of insurance in a digital world The future of insurance in a digital world

Can financial services companies afford not to leverage CSR in emerging markets?

12
Jul

With hundreds of millions of unbanked customers, leapfrogging growth in digital access, high economic growth, and multiple underserved financial markets including agriculture, SMEs and affordable housing, emerging countries are increasingly proving a tremendous growth opportunity for the financial services sector. The provision of socially inclusive products and services for lower-income consumers has particular potential to fuel this growth. But simply providing unbanked or underbanked consumers with financial products and services is no silver bullet, either for the industry or for customers themselves. Without the knowledge, understanding, and financial capacity to use those products and services effectively, customers will struggle become financially sustainable in the long term and companies will, in turn, struggle to build truly sustainable customer bases.

It’s within this fast-paced atmosphere of growth that a smart CSR or corporate citizenship model can create game-changing “shared value”, enabling and empowering consumers on their journey to financial sustainability while building a pipeline of future customers for the financial sector.

In our work with one of India’s largest housing finance companies, which provides home loans to mainly low and middle income consumers, the business was able to leverage its CSR expenditure as part of a holistic capacity-building programme for consumers. Its already socially-inclusive business model was supplemented with a financial awareness and demystification programme for low-income groups that enabled them to better understand the company’s services and make responsible choices about their own finances. The programme reached 30,000 consumers across 13 tier one and two cities within Maharashtra and will extend to four more states in 2016-17.

It’s this unique combination of inclusive products and services with tailored, capacity-building interventions that creates genuine shared value. Through such interventions, companies can improve the quality of life and economic capacity of consumers and entire communities. In turn, as those consumers become more financially capable, financial services companies gain access to a growing base of loyal customers, each using an increasing number of products as they move up the financial value chain. At the same time, responsible companies also build positive reputation as the “institution of choice” amongst beneficiary communities.

Such interventions can be implemented across multiple verticals depending on business priorities and the needs of customers and target communities. In agriculture, financial products can be coupled with livelihood-enhancement interventions to improve yield, increase access to markets, or acquire better prices for produce. Similarly, financial services for the SME sector have proven to be more effective when supported with business toolkits, workshops and advisory for SME customers. By combining smart strategy, effective partnerships and strong programme management, financial services companies can create a virtuous circle that marries social impact with business benefit across almost any sector.

With the fast pace of development across emerging markets, a surge of consumers and communities are entering the purview of formal financial services for the first time and it’s becoming increasingly evident that a “beyond business” approach is not just a responsibility for the financial services industry but a valuable business opportunity. The question is no longer whether the financial services sector should go “beyond business” to create social impact, the question is whether it can afford not to.

 

Written by Laura Quinn, Managing Director at Indian consulting firm Do One Thing

RSS

Twitter

Get in touch

Any questions or suggestions?
Get in touch and we’ll get right back to you.

Urgent enquiries click here.

Send Follow us on LinkedinFollow us