Financial inclusion data paywall: end of the global Knowledge Bank?
The World Bank's previously freely accessible public data on microfinance and financial inclusion has recently been locked away behind a paywall. This flies in the face of the Bank’s commitments to making development knowledge a global public good, and contrasts to many other global initiatives which are moving in the opposite direction aiming to open up data. It also raises larger questions about the Bank’s strategies for microfinance and knowledge.
The MIX (also known as "Microfinance Information Exchange", or "Mixmarket.org") was created by UNCTAD (PDF) and the World Bank's in-house-but-arms-length microfinance governing body, the Consultative Group to Assist the Poor (CGAP). Its founding purpose was to catalyse the World Bank's effort to encourage commercial investors into microfinance.
Since 2002, the MIX (whose headquarters are across the street from the World Bank) has collected data about the global microfinance sector, and packaged primarily for investment decision-makers.
In particular, it aimed at making data related to the financial performance of microfinance institutions, which, incidentally, give information voluntarily and for free to MIX, accessible and comparable. In spite of persistent data quality issues, opaque definitions, and an overall clunky functionality, the site was rather useful, offering freely accessible overview of various metrics for around 2,000 microfinance institutions worldwide.
Its ".org" suffix denotes its claim to serve the greater good, and indeed, anyone with an interest in microfinance could freely access its data online: “a big win for open data in international development”.
Those days, it seems, are over.
What used to be a global public good is now priced at least $486 a year - too much for most students or researchers, especially those based in developing countries. For any given country, anything beyond the names of financial service providers and their loan portfolio size, borrower numbers, savings deposits and savers, is now "premium" information.
From global public good to private data vault
The new MIX, however, clearly contradicts twenty years of World Bank's view that "development knowledge is a global public good that belongs to everyone" (PDF).
It also seems at odds with the wide range of donors and funders who are placing an increasing emphasis on open knowledge and open access approaches (and something that we are IDS are responding to through initiatives such as the Global Open Knowledge Hub and our own open access journal, the IDS Bulletin).
Evidently, development knowledge, as defined by MIX, is now investor knowledge, which is for sale as proprietary packages (priced from $486 per year (for what used to be free) to $5,000-$24,000 per year for more advanced tools).
As an academic researcher, I've used MIX data for a range of purposes, from conducting detailed and systematic calculations - the conclusions of which CGAP and MIX may not always agree with, but that's the nature of free debate - to quick fact-checking.
While MIX acknowledges the importance of research as a key driver of progress in the financial inclusion industry, this appears to be mere lip service, and there is no special access or reduced price for non-commercial users.
Trying to cash in, or trying to restrict access?
The rationale which the MIX puts forward is puzzling: user registration and payment allow them to better understand user needs. But it is unclear why cookies or user surveys couldn’t do that job – or if need be, registration of all users, without payment.
Explaining their new strategy, MIX says: "We transform the relationship between data providers and data consumers". They add: "our efforts have increased the transparency of financial inclusion by providing views into the industry for investors, regulators, and policymakers" – note the past tense.
One wonders, how is that compatible with: "MIX Market is a public data hub […] to create transparency and market insight. This exchange enables users to establish reporting standards, reduce reporting burden, and promote responsible investment" (emphasis added) – are those goals no longer important?
Three possible explanations come to mind:
- Cashing in on their microfinance/financial inclusion sectoral knowledge
- Restricting access to information about microfinance and financial inclusion
- Cordoning off the microfinance investment market by making relevant information accessible only to larger institutional investors
This would be both ethically questionable and at odds with the World Bank's (proclaimed) broader strategies. But also, the monetisation gambit appears destined to fail, while frustrating and locking out many legitimate users.
Judging from a recent trial run with a MIX client relationship manager, there have been no significant improvements to the site. Behind the paywall lurk the same data and interface as before; the only discernibly new product category are regular, semi-automatically produced reports on selected countries, supposed to save users the work of doing their own data crunching. There are even new odd glitches and quirks. Yet the upper end of MIX's "Intelligence" package places it in the same price league as a Bloomberg terminal.
If this is the case, MIX must strike its ".org" suffix, and there are serious questions to be asked about whether the organisation still qualifies for 501(c) tax exemption status as a public charity would also be due, as would be questions about what justified the $4.7m in grants (PDF) per year from its "partners".
MIX and its sponsors might be concerned about information getting into the "wrong hands". Do they perhaps fear it may be used against them, or against specific microfinance institutions? Did some institutions perhaps request information to be locked away?
For instance, regarding interest rates, no other public resource exists, since last year MicrofinanceTransparency was declared "dead". Of course, the MIX offered far more than just interest rate data; it was supposed to entice investors into microfinance.
Cordoning off microfinance investment?
Are they trying to cordon off the microfinance investment market by making relevant information accessible only to larger institutional investors? Are new entrants no longer wanted?
There could be various reasons for wanting to contain and condense the pool of capital-providers and actors in financial inclusion, such as making the investor scene easier to manage and govern. Also, the parent companies of the foundation partners funding the MIX might have an interest in making data on microfinance accessible only to larger investors. These funders may not have an interest in creating global public goods.
Implications for the World Bank
The MIX paywall puts into question both the inclusivity of the the World Bank’s financial inclusion strategies and the Bank’s (former?) commitment to be a global “Knowledge Bank” dead.
I strongly urge Mixmarket and its partners to reconsider their decision to privatise and paywall data (at least the raw data should be freely available for non-commercial usage), and would welcome a response on why this paywall has been brought into being and how they will address the issues I have raised. At present, I cannot see how the new situation does not appear to serve development, research, transparency, or freedom of knowledge.