The digital financial service market in Zambia is diverse and competitive, but it faces some hurdles that must be overcome for the market to reach its full potential. As agency banking takes shape, financial service providers (FSPs) have displayed an openness to testing a number of different models. However, one of the major challenges is that providers have struggled to effectively leverage financial service data collection for effective decision-making.[1]

To help address this issue, the United Nations Capital Development Fund (UNCDF), through its Mobile Money for the Poor (MM4P) programme in Zambia, invited Microfinance Information Exchange (MIX) to debut its innovative FINclusion Lab tool in May 2016. ‘FINclusion Lab is a data analytics platform designed to help users make sense of financial inclusion data through interactive dashboards and maps.’[2] Based on an extensive data collection exercise performed by Financial Sector Deepening Zambia (FSDZ) in 2015, the FINclusion Lab tool for Zambia uses geospatial mapping and data visualization of all the financial access points in the country in order to measure financial inclusion not only at the national level but also at province, district and ward levels. The tool was developed to allow FSPs and regulators to identify opportunities to increase service coverage, inform strategic business planning, and improve government policy and regulation.

Based on positive feedback from the introduction of the FINclusion Lab tool to Zambian digital FSPs in May 2016, UNCDF invited MIX back to Zambia for a follow-up training with providers 6–7 October 2016. The training aimed to achieve the following goals:

• Reintroduce FINclusion Lab mapping as a tool to support effective financial inclusion decision-making
• Present some key findings and use cases to raise interest in the use of the tool for strategic analysis
• Obtain feedback from providers on the usability and usefulness of the tool

MIX provided the training separately at the offices of seven providers, including mobile network operators, banks and other FSPs. Overall, participants received the training positively. A few participants were present during the training in March as well, but for most, it was their first introduction to the tool. Below are some of the visualizations/use cases presented during the training to get participants actively thinking about the various ways to use FINclusion Lab, some of the recurring questions that emerged during discussion with the providers, and some of the key insights gained by UNCDF and MIX during the training.

Figure I gives an overview of the number and type of financial access points across Zambia. What differentiates this tool from others in the market is its precision and level of detail. It breaks down the number of access points by province, district and even the ward level.

Figure I
National overview of financial access points in Zambia

Figure II shows the number of access points available per 10,000 people at different levels (country, province, district and ward). This information is highly relevant for providers wishing to know the current supply of and demand for financial access points in different locations and takes the guess work out of determining how financially well served different areas of the country are. Based on this information, providers can shape their agent/access-point deployment strategies.

Figure II
Supply/demand of access points per 10,000 people in Zambia

Figure III shows the proximity of financial access points to the service points of other sectors such as agriculture, education and health as well as the existing infrastructure and population densities in the specific locations. Such maps could prove very useful for providers who want to gain a full picture of the location they are interested in scoping. For instance, the orange circles in the figure show parts of Zambia where there are a large number of education and agriculture service points but not enough financial access points.

Figure III
Geolocator of access points in relation to other activities in Zambia

Key questions from providers

Most of the providers had questions concerning the accuracy of the data sourced by the FINclusion Lab tool, which for Zambia comes from the comprehensive GIS data that FSDZ gathered. There were also some questions about updating the tool, which will be completed on an annual basis. Other questions focused on the possibility of identifying the providers included in the tool by name, which is something that is technically possible but would require permission from all the providers involved as it might be considered sensitive information.

Lessons learned

Based on these questions and on conversations with the providers, the following insights were gained from the training exercise:

• Trainings where providers have the opportunity to explore the benefits of using innovative data mapping and visualization tools are extremely beneficial. It became clear that this exercise should be repeated at different intervals to ensure that the right people within the organizations are able to access the tool and potentially train their colleagues.
• Providers are hungry for up-to-date and easy-to-access information on the financial service ecosystem that they can leverage for more strategic decision-making. One provider would like to use the tool to develop a kiosk deployment strategy, another provider wanted to use the tool to inform a branch expansion strategy, and most of the providers expressed the usefulness of the tool, especially with the population and infrastructure maps, to paint a better picture of the market and areas that they would like to shift focus to or away from.
• Providers are eager to know what their competitors are up to, but they are also willing to share just enough information on their activities (e.g., providing updated information on agent locations) to ensure that tools like FINclusion Lab present an accurate description of the market.

What next?

Based on the outcomes of the training and the positive feedback garnered from providers, UNCDF MM4P is exploring the possibility of conducting periodical meetings to follow up on usage of the tool and issues providers encounter with it. UNCDF MM4P also plans to develop a system that allows providers to send updates to MIX when the number of financial service access points they manage changes. And lastly, based on the strategies the providers develop using the tool and the areas where they need support, UNCDF could work with providers to design projects with the ultimate aim of increasing financial inclusion in Zambia.

November 2016. Copyright © UN Capital Development Fund. All rights reserved.

The views expressed in this publication are those of the author(s) and do not necessarily represent the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States. The designations employed and the presentation of material on the maps and graphs contained in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations or UNCDF concerning the legal status of any country, territory, city or area or its authorities, or concerning the delimitation of its frontiers or boundaries.