1. MicroSave Market-led solutions for financial services Electronic MGNREGA Payments Designing the Last Mile Mike McCaffrey, Senior Advisor, MicroSave New Delhi, India 29 November 2012

2. MicroSave Market-led solutions for financial services Agenda The Fijian Experience From Access to Active Usage Global Last Mile Analogs Some Potential Improvements Conclusion & Thanks 2

3. MicroSave Market-led solutions for financial services Social Welfare E-Payment Transition in Fiji 3 Progressive Payment System Beneficiary Analysis ABC Analysis Budget Dissection Budget Dissection Beneficiary Interviews Beneficiary Interviews Beneficiary Demographics Beneficiary Demographics Staff Interviews Preparation Transition Research

4. MicroSave Market-led solutions for financial services ABC Costing in Fiji 4 Cost Structure BreakdownActual Estimated Savings Often Overlooked Provides Maneuvering Room

5. MicroSave Market-led solutions for financial services From Access to Active Usage 5 Leonard, M. (2011). G2P: Expanding Financial Inclusion in the Pacific. UNCDF.G2P: Expanding Financial Inclusion in the Pacific Fiji 76% of beneficiaries withdrew cash all at once Hanouch, M. (19 October 2012). Beyond the Mzansi Account in South Africa: Targeting Usage. CGAP Blog.Beyond the Mzansi Account in South Africa: Targeting Usage South Africa 42% of accounts became inactive, and those that were active basically just used it as a cash dispenser, withdrawing 93% of money in the system as cash Porteous, D. et al. (Feb 2012). Social Cash Transfers and Financial Inclusion: Evidence from Four Countries. CGAP.Social Cash Transfers and Financial Inclusion: Evidence from Four Countries Bra. Col. Mex. S.A. Almost all recipients reported nearly always withdrawing the whole grant amount at once MicroSave 2010-2011 Annual ReportMicroSave 2010-2011 Annual Report. India No Frills Accounts: Approximately 80% of these accounts are inactive Rhyne, E. (9 Oct. 2012). What’s Wrong with “Banking the Unbanked”? Ashoka Changemakers Blog.What’s Wrong with “Banking the Unbanked”? Global While now around a quarter of people in low income countries now have bank accounts, only 3.8% of them use them actively (two or more times a month)

6. MicroSave Market-led solutions for financial services Usage Cost Analysis 6 Usage Decision FinancialTemporalCognitive Technical Solutions Needed Behavioral Solutions Needed

7. MicroSave Market-led solutions for financial services MicroSave Market Demand Research 7 MicroSave 2010-2011 Annual ReportMicroSave 2010-2011 Annual Report. Giri, A. et al. (August 2011). Relative Risk to the Savings of the Poor in Uttar Pradesh, MicroSaveRelative Risk to the Savings of the Poor in Uttar Pradesh

8. MicroSave Market-led solutions for financial services The Last Mile is a Very Common Problem 8 Rural Schools Bed nets Oral Rehydration Household Sized Solar Anti-Retroviral Drugs Fertilizers Datta, S. & Mullainathan, S. (November 2012). Behavioral Design: A New Approach to Development Policy. CGD Policy Paper 016.Behavioral Design: A New Approach to Development Policy

9. MicroSave Market-led solutions for financial services Free Financial Inclusion Solutions: Defaults 9 Johnson, E. J., & Goldstein, D. (November, 20003). Do Defaults Save Lives? Science. Vol 302.

10. MicroSave Market-led solutions for financial services Case Study of Pilot Savings Experiment in Colombia 10 Proyecto Capital (Feburary 2012). Inshort: Case Study of Pilot Savings Experiment in Colombia.

11. MicroSave Market-led solutions for financial services Free Financial Inclusion Solutions 11 81% Increase 16% Increase Ashraf, N., Karlan, D., & Yin, W. (2006) Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines. The Quarterly Journal of Economics. May. Karlan, D., McCaonnell, M., Mullainathan, S., & Zinman, J. (2010). Getting to the Top of Mind: How Reminders Increase Savings

12. MicroSave Market-led solutions for financial services Thank You 12