The Microcredit Summit Campaign is proud to present the next installment in our Campaign Commitment E-Workshops Series. Co-hosted with the Center for Financial Inclusion, which launched a Campaign Commitment in 2014, this E-Workshop will focus on helping clients to prepare for old age, including through providing micropensions. The issue of aging is a new global reality, given increasing life expectancy, shrinking family sizes, and better health systems. Today, the microfinance community has the opportunity to be a leader in addressing this issue, helping people to prepare for their older years and providing financial services for older people. The Center for Financial Inclusion recently published a report titled Aging and Financial Inclusion: An Opportunity addressing the issue and identifying priority actions for financial service providers that will be presented during the E-Workshop.

1. Aging and Financial Inclusion
Helping Clients to Prepare for Old Age
Parul Khanna
Associate Director-Projects
Live-tweet the session!
@MicroCredSummit, @CFI_ACCION
use #Commit100M
Sonja Kelly
Fellow
Use the Q&A box
on the top-right to send questions
to the Panelists.
Eppu Mikkonen-Jeanneret
Head of Policy

2. The Center for Financial Inclusion (CFI) commits to bringing greater
attention to the issue of aging and financial services, by:
• Conducting supply-side research in the fall of 2014 on the obstacles
to older adults accessing and using the financial services that could
help to improve their lives.
CFI will also partner with HelpAge International to conduct demand-side
research in the fall of 2014 to better understand the income streams
and expenses of older adults in Colombia.
• Publishing a white paper on these two research efforts and conduct
two roundtable discussions -- one focused on the Latin America
region and one focused globally -- that will galvanize support around
this issue.
CFI Campaign Commitment in 2014
See more at www.microcreditsummit.org/make-a-commitment.html

3. StrategiestoCoverOld-AgeExpenses,Colombia(2013)

4. The Micro-Pension® Ecosystem and Model
Micro Pension Foundation | http://www.micropensionfoundation.org
Micro-Pension®
is a Registered Trade-mark and Brand-name of Invest India Micro Pension Services Private Limited
The microPension-VISA LAB is an India-based non-profit entity focussed on retirement literacy and on developing innovative technology-led solutions to
improve access to contributory social security programs by low income unbanked informal sector workers in developing countries

5. Lifetime poor, dis-savers
Unpaid workers and
workforce aged >60
Excluded informal workers
who can save for old age
Formal sector workers with
pension benefits
India's Pension Coverage Gap

6. 1. Children
2. God
3. Government
4. Kismet
Retirement Portfolio of Most Indians

7. Retirement Outcomes of Most Indians

8. ● The Lab is a specialised R&D facility housed within the non-profit
Micro Pension Foundation.
● The Lab develops innovative technology-led solutions to improve
access to contributory social security programs by low income
unbanked informal sector workers in developing countries.
● It also provides technical assistance and expert advisory services
to governments, regulators and multilateral aid agencies in design
and turn-key implementation of inclusive pension and social
security programs.
MicroPension-VISA Inclusion Lab

9. Micro-Pension® Operating Model

10. 1. A young person is educated and encouraged by a credible outreach partner (MFI, cooperative, NG
2. She starts saving a small part of her income into an integrated social security solution. Her contrib
3. Even if she changes her location or job, she is able to continue transmitting her micro-savings dire
4. When she is old, her accumulations are paid back directly into her repaid card or bank account as
5. Along the way, she has easy and simple access to objective information and an effective complain
Simple, Secure, Convenient, Affordable

11. Micro Pension® Impact Footprint
14.5%
16%
18.8%
>100,000 customers
Between 25,000 and 100,000 customers
<25,000 customers
Aggregate base of ~1.1 mn clients as on March 2014

12. Education & Enrolment
Clients are educated and enrolled by
trained/ certified field staff for an
integrated product solution.
Each client gets a unique and portable
"micro-pension" account number using
a central IT platform that stores static,
transactional and savings value data
over time.
Clients also receive government co-
contributions directly into their NPS-
Lite and AABY accounts.
Ongoing Contributions
Clients periodically deposit micro-
savings into their own bank a/c or
prepaid card.
Prepaid savings are kept in escrow
pending transfer to relevant financial
institution for investment.
Micro-savings are debited using a
standing instruction mandate (SI) on
each client's prepaid card or through
an SI or ECS on their bank a/c.
Reconciled micro-savings are
transferred by regulated payment
partners directly to product providers.
Services and Benefits
Social security contributions and
government co-contributions grow
over time.
Redemptions, insurance claims and
pension benefits are transferred
directly into each client's bank a/c or
prepaid card.
Clients receive periodic account
statements showing contributions
and accumulations over time.
For information, redemptions, claims
or compliants, clients simply call the
national Micro Pension® HelpLine.
Micro-Pension®
Operating Model

13. Micro-payments
Secure, low-cost and portable bank
accounts or prepaid-cards based
micro-payment solution for cash-in
and cash-out of micro-savings,
redemptions and claims settlement;
Bank accounts and prepaid cards
issued by Ratnakar Bank
Life Insurance
Term and endowment insurance
products cover mortality risk and
deliver predictable savings outcomes
to IIMPS clients.
Micro-Saving Products
Medium market risk micro-mutual
fund products that enable clients to
accumulate micro-savings for known
future expenses; The RBPF doubles
up as a long-term PF-type product
with a liquidity option and simplified
KYC
NPS-Lite/ JBY
The LIC partnership provides access
to government sponsored/
subsidized social security products
like the NPS-Lite and the Janshree
Bima Yojana
Health Insurance
Cashless group health insurance of
Rs.50,000 for a family of 4 that
covers pregnancy and all pre-existing
illnesses and provides insurance
cover immediately following
premium payment.
Integrated Product Solution

14. 1. Education and Enrolment

15. 1 MICRO-PENSION®
FIELD PROCESS

16. 2 MICRO-PENSION®
FIELD PROCESS

17. 3 MICRO-PENSION®
FIELD PROCESS

18. 4 MICRO-PENSION®
FIELD PROCESS

19. 5 MICRO-PENSION®
FIELD PROCESS

20. 6 MICRO-PENSION®
FIELD PROCESS

21. 7 MICRO-PENSION®
FIELD PROCESS

22. 8 MICRO-PENSION®
FIELD PROCESS

23. 9 MICRO-PENSION®
FIELD PROCESS

24. 10 MICRO-PENSION®
FIELD PROCESS

25. 2. Secure Micro-Payments

26. Life insurance
eal-time accounting
ciliation in a simple,
yment transaction
a BC outlet
ebited and transferred to each product provider's accounts as per client SI mandate
The microPension-VISA Prepaid Solution
Prepaid account balance
is kept safely in escrow in the
client's name with a
scheduled commercial bank
Health, accident insurance
Children's education/ marriage
Retirement savings
Low income, unbanked,
excluded informal sector person
with intermittent income and
unpredictable cash-flow in a
remote location
Integrated basket of
well regulated Social Security and
Micro-saving Products

27. Acquisition
Payments
● Field staff of MFIs, SHG federations and NGOs trained in educating an
● Commercial incentives are linked to education quality and persistency
● Incentives also linked to long-term informational and transactional serv
● Network of secure, convenient and low-cost third-party payment accep
● Commercial incentives for BC linked to value of contributions
● Central “switch” by VISA manages interoperable payment outreach, re
Strategy: Delink Acquisition from Payments

28. ● Simple: Easy for everyday citizens to understand and use; Identical to loading talk-
time onto a prepaid mobile phone
● Secure: Real-time, automated reconciliation; Zero risk of fraud or errors
● High governance and compliance: Micro-savings kept in escrow with a scheduled
commercial bank and directly transferred from individual's prepaid account to
product providers
● Portable and convenient: Nationwide, interoperable payments outreach for cash-in
and cash-out; Ideal solution for people who face frequent migration
● Flexible: Allows individuals to make contributions based on their own cash-flows
● Automated electronic contributions: Card balances and individual Standing
Instructions managed by a customized and secure prepaid program platform
Why Does This Work?

29. ● Affordable: Transaction fees linked to transaction size; Does not penalize the
poor
● Near zero capital cost for microPOS device and prepaid cards
● Immediately implementable: Does not await bank penetration to remote
locations; Harnesses VISA's existing secure back-office capacity and global
experience with electronic payments; Harnesses existing telecom outreach.
Why Does This Work? /2

30. 3. Ongoing Servicing

31. Centralised Back-office
Central document processing unit
Verification of application forms and KYC documents;
Data entry and scanning of product applications and SI
mandate forms; Managing inventory and delivery of
application forms, prepaid cards and IEC material to
field units
Central Record-keeping IT Platform
Central issuance, record-keeping and administration of
portable, individual “micro-pension” accounts;
Electronic record of individual static and transactional
data for multiple social security products; Repository for
scanned copies of application forms and documents
related to claims and payouts; Printing of digitally filled
application forms; De-duplication for efficient targeting
and prevention of leakages; Dashboard and MIS for
stakeholders
Prepaid program management platform
Recording of individual standing instructions; Real-time
accounting and reconciliation of micro-payments (cash-
in); Electronic (feeds-based) processing of individual
prepaid debit transactions; Triggering aggregated
transfer of funds to product partners
1
2
3
A central back-office, and extensive
use of IT in record-keeping,
administration and electronic,
straight-through processing of
transactions and payments
produces lower costs through
economies of scale and significantly
lower operations risk
The sCube Micro-Pension Platform was developed with KfW.
The prepaid program platform was developed with VISA

32. Excluded low income
individual
1. Standard, Aadhaar-enabled “e-KYC” for citizens who would
otherwise struggle with identity documents
2. Multiple financial product access with a single authentication
3. Low cost: Physical KYC, data-entry and verification not
required
4. Shorter enrollment process
1. Multiple KYC documents not required for different product
providers for static data changes – client uses biometric
authentication service to update UID database with multiple
product providers
2. Secure authentication-based cash-out of insurance claims,
withdrawals from mutual fund or receipt of pension benefits,
etc. using a microATM
Convenient, low cost enrolment
Secure cash-out
“Aadhaar” is the brand name of the unique identity number issued to every Indian by the Unique Identification Authority of India (UIDAI).
As on date, over 600 million Aadhaar numbers have already been issued by the UIDAI. Most of the Micro-Pension target population may
already have an Aadhaar.
IIMPS is registered with UIDAI as a KYC User Agency (KUA) and Aadhaar Authentication Agency (AUA)
Integration with Aadhaar

33. National Multilingual HelpLine
Field compliance audit
Call-backs to new clients to
verify knowledge of concepts,
product features, benefits,
rights and process and also
verify enrollment process
compliance
Reminders
Calls to new clients and to
irregular savers to encourage
continued savings discipline
HelpDesk
Centralised port for collating,
reporting and resolving complaints
and queries and effectively
addressing requests for claims
settlement, changes in static data,
withdrawals, statements, etc.
Surveys
Periodic calls for behavioral
finance studies among
persistent, irregular and
dormant clients to produce
business-level MIS for IIMPS
and partner stakeholders
Field-staff support
Support to field-staff and
certified counselors to more
effectively address client
queries; Also used in training
needs assessment surveys
Client protection
Verifying receipt of payouts
including pension payments,
insurance claims settlement
and withdrawals of liquid
savings
1 6
2
3
5
4
The national MicroPension HelpLine was launched in 2011 with support from NABARD.
Over the last 24 months, the HelpLine has made ~300,000 outbound calls to both existing
and new clients to confirm client knowledge and verify education process compliance

34. This is beginning to work...

35. THANK YOU
http://www.micropensionfoundation.org
http://www.giftapension.com
For more information, please write to
parul.khanna@micropensionfoundation.com

36. Aging and Financial Inclusion
Helping Clients to Prepare for Old Age
Don’t forget to tweet your takeaways of this E-workshop @MicroCredSummit using #Commit100M
To follow up with the panelists:
Parul Khanna: parul.khanna@micropensionfoundation.org
Sonja Kelly: skelly@accion.org
Eppu Mikkonen-Jeanneret: eppu@helpage.org
Join CFI in announcing YOUR CAMPAIGN COMMITMENT: mcs2015.org/commitonline
Feel free to write to us at mycommitment@microcreditsummit.org