“A map does not just chart, it unlocks and formulates meaning; it forms bridges between here and there, between disparate ideas that we did not know were previously connected.”
― Reif Larsen, The Selected Works of T.S. Spivet
How does BRAC, the world’s largest non-governmental organization (NGO), develop pathways out of poverty for the poorest people in a village? They begin with a map. As you see in the photo on the cover of this report, they bring the village together and start drawing maps in the dirt, identifying each household, market, business, and place of worship. They then ask the help of the community to identify the poorest households, marking each one on the map. Their work begins with those households.
This painstaking, household-by-household approach of identifying the excluded and locating them within their community and context represents the next step that we need to take to achieve a new set of ambitious global development goals.
The Millennium Development Goals (MDGs) set by the United Nations aimed at cutting world poverty in half by the end of this year. By some measure, that goal has been achieved, although primarily through large reductions in populous Asian countries offsetting much more modest reductions in other parts of the world. UN member states recently approved a new set of 17 objectives, the Sustainable Development Goals (SDGs). The first SDG calls for the end of extreme poverty by 2030.
The World Bank Group shares in this goal. Bank President Jim Kim has focused the work of his institution around two goals: 1) end extreme poverty by 2030 and 2) boost shared prosperity among the 40 percent of the poorest people in low- and middle-income countries. The Bank has also established a goal of achieving universal financial access by 2020 as one means of supporting the 2030 goals.
At the Microcredit Summit Campaign, one of our key roles has been to work with the microfinance community to set global goals. We first sought to reach 100 million of the world’s poorest families with microcredit and other financial services. When the microfinance community reached these targets 10 years later, we set two new goals: 1) reaching 175 million of the poorest families with credit for self-employment and other financial and business services, and 2) helping 100 million families lift themselves out of extreme poverty. This report presents the performance of the global microfinance community against these goals.
The report also describes something that the global development community has proven less adept at: drawing maps that show how—and where—a variety of disparate organizations can work together to achieve the goals. The uneven performance of many countries in realizing the MDGs demonstrates this clearly. According to the 2015 MDG report, we know that the performance was especially uneven between urban and rural areas. Without maps to show who needed to be reached to achieve each goal, and what facilities and resources would be required to meet them, countries missed reaching large segments of their population with their MDG plans.
The numbers we report here on microfinance outreach reveal a similar story. While the total number of microfinance borrowers served worldwide continues to recover and grow, following a setback in India in 2010 (due to the Andhra Pradesh crisis), the number (as measured) of poorest clients reached continues to shrink. Without mapping where these potential clients live and work, and without developing effective strategies to provide them with products and services appropriate to their needs and aspirations, we will not reach our goal of seeing 100 million families move out of extreme poverty.
Those who want to reach audacious goals need to draw a map of how to get there. We learned this from the governments of Ecuador and Ethiopia. In Ecuador, the vice president’s office has made a goal of ensuring that the country includes all persons with a disability (PWDs) in the national plans and economic life of the community. One step in achieving this goal involved the development of disaster preparedness strategies that include emergency evacuation plans for all PWDs. This required working with enumerators to identify the household of each PWD, then creating a plan for evacuating that person in the case of a disaster.
The government of Ethiopia set a goal of making its land and its people less vulnerable to drought. To achieve this goal, the government mapped out the number of people living in vulnerable areas and worked with their communities to understand the factors that created vulnerability and develop solutions to increase resilience. They developed a massive Productive Safety Net Program (PSNP) that reaches over 10 million people and has helped reduce the poverty level in Ethiopia from 56 percent to 31 percent (2001–2011).
Maps also help us identify who might be left out. They also help us make connections between factors that might seem unrelated to each other. The map drawn by John Snow in 1855 provides one of the most famous examples of this. The city of London faced a cholera epidemic in 1854. At that time, the most popular theory claimed that people caught cholera through miasma, or breathing infected air.
Snow had a different concept and drew a map to prove it. In his map of the Soho neighborhood, Snow used a bar to depict the location of each person who had died of cholera. Then, he identified each of the water pumps in the neighborhood with lines encircling all the homes that used each pump. His map clearly demonstrated that almost all the people who died had been using the same water pump. The neighborhood council responded to his map with swift and decisive action: they took the handle off the pump and brought an end to the epidemic.
Mapping the people who remain excluded from financial services can help us make connections that may be interlinked:
- The overlap of those needing access to financial services and those needing access to better health care, housing, nutrition, and education
- The connection between those lacking financial services and those earning a large portion of their income through agriculture
- The link between exclusion and gender in financial services, and the need to develop financial products appropriate to the needs and aspirations of women
- The need to place aggregators and agents in the right locations to make sure that digital financial services reach those living in extreme poverty
- The great masses of people fleeing from instability and destruction of their homes, and their need for tools to help them communicate with family and send and receive money wherever they may end up
- The link between those in poverty receiving conditional cash transfers from their government and those who need access to savings and credit facilities, financial capabilities training, and livelihood support.
The Center for Financial Inclusion, through its FI2020 program, has done the most work to date to develop the financial inclusion map. After interviewing more than 300 financial service practitioners, they developed their “Roadmap to Inclusion.” It identifies five key focus areas for reaching full financial inclusion (addressing customer needs, technology-enabled business models, financial capability, client protection, and credit reporting). Their Roadmap provides a set of instructions for expanding the outreach of financial services. In their recent progress report on the Roadmap, they gave the “addressing customer needs” focus area one of the lowest scores (3 points out of 10):
The test for financial inclusion should be whether the lives of the newly included are improved. However, access to an account does not improve lives if the account sits idle. Accounts are only a first step. The large and, we believe, growing access-usage gap, coupled with a lack of attention to services beyond payment accounts, prompts us to give this area a relatively pessimistic score of 3.
In reviewing recent progress, we found good news on access, but a bleak picture of usage. Despite mobile money’s glowing headlines, 68 percent of registered mobile wallets had not been used during the last 90 days, according to GSMA. Similarly, the Findex revealed that, while saving and borrowing trends indicate increased financial activity, this is not reflected in the uptake of formal products. And while data on microinsurance uptake is sparse, it is still a hard sell for much of the world’s underserved. The barriers often cited to explain low usage include poor product design, lack of consumer knowledge about how to use products, frustration with operational failures, and inept customer care, among others.
This points to another key value of maps: they help us start from our end goal and work back to how we want to get there. Maps help us focus on where we want to be and what we need to learn to get there. Without making and using maps, we may proceed down dead-end roads.
The Microcredit Summit Campaign has demonstrated this lesson. We have promoted microfinance as a tool for reaching the poorest families and helping them move out of poverty. The evidence from academic studies and our own analyses show that, without a very clear focus on that goal and a roadmap for achieving it, microfinance will miss the mark of realizing its potential to contribute to the elimination of extreme poverty.
In this report, we begin the effort of drawing a map to show how universal financial inclusion can support the goal of ending extreme poverty. We have identified six “pathways” that reach the poorest families to help them reduce their vulnerabilities and take advantage of opportunities. With each pathway, we also include maps that illustrate where the pathway can reach and who will have access to its resources. We also provide an example in each chapter of a Campaign partner that has launched a Campaign Commitment to take specific, measurable, and time-bound actions to support the particular pathway objective.
Our work that we describe here is incomplete, even though it identifies clear calls to action. Our maps still contain many blank spaces, terra incognita, where we still do not know the best approach or the right connection points.
This brings us to another value of maps, especially incomplete ones. They inspire adventurers and explorers to fill in missing spots, to blaze trails where none have existed before. In the same way that the crude drawings by ancient seafarers motivated others to go further and develop more precise atlases, we hope that our rudimentary attempts in this report contribute to the development of a new type of GPS system that charts the best routes out of poverty for the world’s poorest families.