FinScope, a research tool developed by FinMark Trust, is a nationally representative survey of how individuals source their income and manage their financial lives in South Africa. Created in 2002, FinScope arose in response to the dearth of data on financial inclusion in South Africa and has effectively served to fill this information gap ever since. FinMark Trust’s analysis led it to understand that lack of information causes sub-optimal decision-making, by policy makers, advocacy organisation and financial service providers.
The FinScope survey was piloted in 2002 with the objective to increase evidence-based policy and decision making in the financial sector. The survey measured the levels of access to and uptake of financial products (both formal and informal) across income ranges and other demographics. The objectives and the content of FinScope surveys, in South Africa and elsewhere, have widened over time to reflect financial market development and to incorporate analysis of the cultural and attitudinal factors influencing the financial behaviour and needs of the population.
FinScope surveys have an ambitious range of objectives, from tracking access and usage to highlighting product development opportunities and providing insights for policy reform and the regulatory framework. By providing a means to measure financial inclusion, FinScope has a pathway connecting to the ultimate goal and objectives of FinMark Trust. FinScope is widely perceived to have been transformative. It has become a robust methodological framework and a well-recognised brand across Africa and beyond.
Market facilitation (M4P) is an approach to promote systemic change—change that goes beyond individual players and that is relevant to the wider environment, affecting many. Market systems development requires that organisations play a facilitating role. Standing outside of the market system, facilitators work with different players within the system, to make it work more effectively. Their essential role is active and catalytic, to enable others to do rather than do themselves—stimulating changes in a market system without becoming part of it.
Understanding this concept and applying it in market systems development initiatives is no mean feat. Market facilitators, donors and practitioners must draw from a wide range of tools and techniques to put market facilitation into practice. Developing and maintaining partnerships, managing risks, deploying flexible intervention tactics, establishing a measurement system and communicating effectively are all useful learning points for those working in this field. Knowing when to exit an intervention is just as critical as identifying and selecting the right partners to work with and understanding these complexities can have an impact on the effectiveness of interventions. Market facilitation as a practice is more of an art than a science, directed by principles rather than lists of actions, which can make it difficult to translate the theory into practice.
There is limited evidence from the field on how to apply this approach in a way that ensures interventions are both scalable and sustainable. In June 2015, FSD Africa commissioned the Springfield Centre to produce: a) one
comprehensive case study of FSD Kenya—a financial market facilitation agency in Nairobi, Kenya; and b) six minicase studies of financial market facilitation interventions from the wider FSD Network, by the FinMark Trust, FSD Kenya, FSD Tanzania and FSD Zambia. The aim of this process was to build the knowledge base around the art of market facilitation in the field. These case studies revealed a lot of insights about effective market facilitation, the challenges the Financial Sector Deepening (FSD) Network faced while designing and delivering interventions using the M4P approach and the lessons they have learned so far.
The M4P synthesis paper (this publication) explores the art of market facilitation in action through the lens of the FSD network and synthesises learnings gained from these case studies to build understanding around the M4P approach. The paper examines the wider lessons and challenges that emerge for organisations addressing the dilemmas of developing financial markets for the poor and how they differ significantly from other conventional approaches.