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More evidence, less poverty

IPA Consumer Protection Quarterly

Issue No. 12 – January 2024

Welcome back to the Consumer Protection Quarterly, IPA's newsletter on the latest consumer protection research across the globe. This newsletter is part of IPA's Consumer Protection Research Initiative

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(CPRI). Each quarter we send you the latest research, insights, and inspiration for financial consumer protection. If you have something to share, please reach out: [email protected]

mailto:[email protected]?subject=Consumer%20Protection%20Quarterly

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You are receiving this email because of your past participation in IPA consumer protection or financial inclusion events, and/or because you signed up for our consumer protection practitioner's forum mailing interest list

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What's New and What's Next

New: Mobile Instant Credit: Impacts, Challenges, and Lessons for Consumer Protection

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Digital financial services have enabled tremendous innovation in the provision of credit in low- and middle-income countries. But as digitization increases, so does the proliferation of misconduct, consumer abuse, and over-indebtedness. A new report by IPA and CEGA

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delves into the impacts of digitization of financial services, specifically Mobile Instant Credit (MIC) and related products. These impacts are based on rigorous evidence from around the globe (including many IPA-led studies). In addition to discussing the (limited) impacts of MIC on financial health and consumer welfare, this deck highlights key consumer protection risks, such as high and hidden prices, debt stress, and discrimination. How can we overcome these risks? Section four of the report outlines promising new approaches to protect and empower consumers.

New: Blog | Boosting Digital Financial Inclusion Through Information Campaigns in Bangladesh

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Can a simple information campaign improve digital financial service usage among social assistance recipients? Turns out, it can. An IPA study

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that focused on recipients of the Bangladesh Government’s social safety net allowance using informational posters, desk calendars, and videos has been shown to improve recipients’ knowledge, understanding, and usage of mobile money accounts for government-to-person (G2P) payments. Read more about the study in our latest blog

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New: Consumers International Global Congress 2023

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​In December 2023, the Consumers International Global Congress

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brought together practitioners from across business, civil society, and academia to improve the lives of consumers globally.

Paul Adams, Director of IPA’s Financial Inclusion Program & Consumer Protection Research Initiative, participated in a panel discussion on emerging Regulatory Technology (RegTech, the use of information technology to enhance regulatory and compliance processes) solutions, their impact on regulatory innovation, and key recommendations for achieving positive outcomes in the ever-changing financial landscape. You can watch the panel here

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Photo: Left to right: Juliet Ongwae (Cambridge SupTech Lab), Rosie Thomas (CHOICE, Australia), Christine Hougaard (Cenfri), Paul Adams (IPA), and Melissa Koide (FinRegLab).



Next: Best Bets: Emerging Opportunities for Impact at Scale

In IPA’s latest report, we highlight 14 innovations that have the potential to transform lives and are ripe candidates for further investment and research. Through rigorous testing and the use of data, we now know more than ever about the impact and cost-effectiveness of different approaches. Yet, the number of evidence-based programs operating at scale remains relatively limited, addressing only a fraction of the challenges faced by vulnerable populations. IPA experts selected our “Best Bets

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” for programs with potential for impact at scale but in need of additional rigorous research to demonstrate effectiveness and call on implementers, researchers, and funders to support the accompanying research, learning, and policy work required to achieve this.

In our report, we highlight Digital Payments as one of our “Best Bets.” In low- and middle-income countries, a substantial portion of the population, especially women, still lacks access to traditional banking services and predominantly conducts financial transactions using cash. Embracing digital payment solutions, like mobile money and bank transfers, offers a cashless, fast, secure, and discreet way to facilitate financial inclusion and empower individuals in these regions.

Funding Opportunities

DCO Impact Evaluations for Digital Credit

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| Due by April 28th, 2023: This is an open eligibility RFP interested in proposals investigating the impacts of digital credit products, how these impacts vary according to product design features or borrower characteristics, and how products can be improved to better protect and benefit under-served populations.

DCO Data Privacy in Low- and Middle-Income Countries

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| Due by April 28th, 2023: This is an open eligibility RFP primarily interested in funding technical proposals that investigate how privacy-enhancing technologies (PETs) can be applied to digital services in LMICs. DCO may also fund compelling theoretical and qualitative proposals that seek to rigorously document and understand concerns regarding data privacy and identify ways to enhance data privacy protections in LMICs.

Things that Make Us Think

Report: A new policy analysis from FinRegLab

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focuses on compliance issues under federal laws governing consumer disclosures, fair lending analyses, and risk management of machine learning credit underwriting models. While many questions remain, this report highlights the importance of updating regulatory frameworks to encourage the responsible use of these technologies.

Report: As the financial sector continues to develop in Kenya, it is becoming increasingly important for the financial sector to deliver value to consumers. Consumer protection is a key part of ensuring that financial services deliver value. A new report from FSD Kenya

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develops a financial consumer outcomes index for Kenya, based on available indicators from the FinAccess survey. The financial consumer protection outcomes index— FCPOI in short—is calculated as the weighted average score across a range of sub-indicators in the FinAccess survey speaking to nine core elements.

Article: Back in 2022, IPA published a blog

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discussing the potential risks that Buy Now Pay Later (BNPL) services might pose to consumers. Since 2022, BNPL service usage has rapidly grown and more data has come to light. A new article in BIS Quarterly

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provides an overview of the BNPL business model, discussing the benefits and costs for each agent (merchant, user, and platform) and documents the global diffusion of BNPL services, mapping users' gender, age, education, and risk profiles. Additionally, the article asks why the adoption of BNPL services has varied widely across countries.

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