Financial services

Our Financial Services team has completed more than 500 projects across sub-Saharan Africa and the Middle East since 2001. We help leading financial institutions address their challenges, unlock value for their stakeholders and develop strategies to compete in a fast-changing sector. Our team has a unique understanding of the evolving market structures, economics, and strategic and regulatory trends across all segments of the financial services sector in Africa.

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Expertise Areas

Strategy

Genesis has provided strategy support to financial institutions across Africa and the Middle East for more than 20 years. Rooted in our strong economics background, our approach to strategy development is classical in orientation, taking into account industry and market structure, competition and value chain analysis.

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Transaction Advisory

Two practices in Genesis offer transaction advisory: and Financial Services and Infrastructure and PPP Advisory. Our financial services advisory service spans the full investment cycle, from capital raising and investment advisory through to strategic interventions with portfolio companies to deliver value to all stakeholders.

The Infrastructure and PPP Advisory assists public institutions (and occasionally private investors) in the planning, procurement and implementation of large-scale transactions for infrastructure and related services.

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Market Analysis and Positioning

We have extensive expertise in conducting market analysis and positioning across a number of financial sectors in Africa and the Middle East. We work with our clients to understand industry dynamics and ascertain the relative position of competing businesses. Our approach focuses on understanding supply-side and demand-side issues to uncover potential gaps which our clients can then use in developing strategies to unlock value.

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Business and Operating Models

The complexities of doing business in Africa are stark in financial services. Faced with rapid technological change, growing competition from non-financial service providers, shifting national policy and regulation and significant economic headwinds, retail banks and insurers have to work hard to create value for their stakeholders. A key to unlocking this value is to apply structured thinking to what business and operating models are best suited to the African context.

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Financial Sector Regulation

Extensive regulatory oversight is a key feature of a number of critical sectors such as energy, telecommunications, water, healthcare, financial services and broadcasting.

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Risk Management

The ever-increasing volatility and complexity around financial markets have created ongoing downside risk for financial institutions. Without a strong understanding of the risk factors, combined with robust methodologies on how to manage them, financial institutions are virtually guaranteed to lose money,

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Financial Inclusion

Hundreds of millions of people across sub-Saharan Africa lack access to basic financial products and services, including savings, credit and insurance. Lack of access to financial services is particularly acute among the poor, among women and among those living in rural areas where the reach of traditional financial channels has historically been limited.

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Financial Institution Expertise

By working together with our clients to understand their unique contexts by applying our industry expertise and experience, Genesis delivers practical and valuable advisory services.


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Monitoring and Evaluation

Genesis provides a full range of monitoring and evaluation services that include the design, review and support of M&E systems and evaluations of programmes, strategies and policies. Our aim is to inform the design, management and allocation of funds to generate better decisions and outcomes, as well as to provide greater value for money.

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Competition Economics

We offer clients a comprehensive range of expert economic services in the area of competition law, and remain the provider of choice for most top law firms when they need to retain expert economists to advise on critical matters. Our application of rigorous economic analysis, using quantitative and conceptual approaches, has resulted in blue-chip companies across Africa routinely relying on us for expert advice and support when they interact with competition authorities.

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Applied Behavioural Economics

Behavioural economics is essentially a science that centres on studying how contextual factors affect human decisions. Our Applied Behavioural Economics team specialises in understanding why customers behave in the way they do and uses a set of tools to improve their decision-making.

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Projects

Mapping out path for local card-processing in SA

Project name:
South African card switch strategy

Service:
Market analysis and positioning
Strategy

Sector:
Financial services

Area of Expertise:
Payments

Client:
Bankserve

Date:
2016

Country:
South Africa


South Africa is unusual in having a domestic payment switch that can process domestic card transactions in addition to the global processing schemes (Visa and MasterCard). This brings a number of unique benefits: South Africa’s payments system maintains an element of sovereignty, protected from political fluctuations elsewhere, and the global processing schemes’ prices can be benchmarked against a local processor. 

However, South Africa’s domestic payment switch, BankservAfrica (Bankserv), is under increasing pressure from the global processing schemes. With the rise in digital payment innovations, banks typically move large portions of their card-processing to Visa or MasterCard to access these digital innovations. 

Genesis partnered Bankserv to address this competitive pressure and determine how to continue providing card-switching services to the South African market. We worked closely with Bankserv and an international payments consultancy to extensively scope the domestic payments landscape, in particularly estimating the probability of cash and EFT being substituted for card payments in the future. 

We then helped Bankserv understand its vulnerability to losses in card volumes by conducting a scenario analysis and a volume-based cost reallocation. This provided Bankserv with the minimum processing volume it would need  for the business to remain sustainable and highlighted how changes to the card business would impact the cost of processing all other products.  

Given the findings from the analysis, Genesis developed a number of strategic options for Bankserv to consider. The options included maintaining the current business model, with a few enhancements; pursuing a strategy to facilitate innovation across the network; or exiting and selling the card-processing business. The options were not mutually exclusive and each option was assessed against a number of criteria to understand which could be practically implemented. 

The analysis and recommendations were presented to the executive committee. It resulted in Bankserv beginning a consultative process with its shareholders to understand how best to shape its card business to meet the needs of the South African market and maintain the benefits of domestic card-processing. 

Photo by CafeCredit 

Making Botswana an investment gateway to Africa

Project name:
Supporting the development of Botswana as an international financial services centre

Service:
Market analysis and positioning

Sector:
Financial services

Area of Expertise:
Capital markets

Client:
Global asset management company

Date:
2015 - 2016

Country:
Botswana


Channelling capital flows to Africa is essential for the continent’s development. International financial centres (IFCs) facilitate this and provide income and employment opportunities.

For this reason, Botswana established its International Financial Services Centre (IFSC) in 2003. The tax and regulatory incentives offered to investors were an important step towards developing an IFC, but Botswana faced stiff competition. The IFSC attracted only a handful of large companies compared with the size and gravitational pull of the incumbent financial centre in Africa, Mauritius.

Genesis partnered with a global asset management company to diagnose why the IFSC had not developed into a global financial hub and how to rectify this. We leveraged our understanding of how IFCs evolve – investors choose a location with a competitive and credible tax and regulatory offer and with a strong network of support services. 

These factors intersect to attract a critical mass of investors to the IFC. This creates a gravitational pull which attracts more investors and support services and establishes the IFC’s credibility, creating a virtuous cycle. 

To understand why most investors were choosing Mauritius over Botswana, we conducted extensive interviews with investors, tax lawyers, fiduciary service providers and policy-makers in South Africa and Botswana. The IFSC’s tax and regulatory offer was found to be less competitive than that of Mauritius. There was uncertainty regarding the treatment of investors and the guarantee of IFSC incentives. Botswana also lacked a large network of support services.

We identified that Botswana’s government had a choice: an opportunity to develop the IFSC into a global financial hub, but at significant costs. Achieving this will require more than matching Mauritius’s offer and making it credible – the IFSC will have to carve out a niche identity which establishes a distinct advantage over Mauritius. Choosing this path requires balancing the benefits of achieving true IFC status against the costs of establishing this distinct advantage. 

Genesis developed a roadmap detailing the steps Botswana required to match the Mauritius offer; establish this offer’s credibility, and leveraging Botswana’s proximity and ties to South Africa. The plan was presented to the president and his cabinet where the government affirmed its commitment to developing the IFSC. Botswana’s Investment and Trade Centre has adopted the roadmap.   

Business case for new retail bank in South Africa

Project name:
Building a new retail bank

Service:
Business and operating models

Sector:
Financial services

Area of Expertise:
Retail banking

Client:
Confidential

Date:
2013, 2016

Country:
South Africa


Genesis partnered with a JSE-listed South African financial services provider to develop a business case for specialist banking services to the business and personal market. 

The client already possessed many of the capabilities required for a retail bank but faced multiple challenges such as the lack of a core banking system and a physical distribution network, which have  historically dominated the face of retail banking in South Africa. In order to address the capability gaps that were identified through a detailed capability mapping exercise, the Genesis team identified technological solutions that address the constraints. 

The design of the value proposition was informed by the client’s vision of building a low-cost, high-touch-and-feel bank for its target customer base. Then, in order to identify suitable technologies through which to implement this vision, the team conducted a detailed assessment of the bank’s target market segments. Using this methodology, we obtained a good understanding of client behaviours and attitudes to using digital channels as opposed to physical infrastructure.

As the client’s objective was to develop a bank from the ground up, the team proposed an operating model that would overcome many of the challenges related to organisational and product silos faced by incumbent banks, which often result in conflicting interests. Building a robust operating model fully supported by technological choices such as the core banking system was therefore identified as a key success factor for this client. 

The outputs were presented to the group CEO and were well received. These are informing the client’s market entry strategy and Genesis conducted further work in 2016 on delivering a new technologically driven retail bank.

New costing model for top-tier SA bank

Project name:
Operational Shared Services (OSS) cost-recovery model for a top-tier bank

Service:
Financial institution expertise

Sector:
Financial services
Business Banking
Corporate and Investment Banking

Area of Expertise:
Financial modelling

Client:
Confidential

Date:
2016

Country:
South Africa


A top-tier South African bank, under increasing cost pressure, needed to relook at the costs of its shared services and the allocation methodology.

The Genesis team developed a revised cost recovery model for the division. The model enabled operations and product management to immediately understand their costs better, to take control of their costs and make informed business decisions.

We provided an assessment of current and new allocations which made sense to operations and to the business, and between businesses where some of the products’ costs went up while others went down.

Through the analysis of available data and drivers of cost recovery, the team built a new cost-recovery model on activity-based costing principles. In this way, Genesis was able to identify opportunities to become more efficient as well as create accountability and transparency in the recovery of cost.

Through constant engagement with the finance, costing and business departments during the process, we ensured that the revised model was accepted as best for the bank. The new costing model will be implemented fully in the new financial year with revised estimates taking into account adjustments this year.

Unlocking competition in digital finance in Africa & Asia

Project name:
Unlocking competition in digital finance

Service:
Financial inclusion
Competition economics

Sector:
Financial services

Client:
Confidential

Date:
2015 - 2016

Country:
Bangladesh
India
Kenya
Nigeria


Genesis was commissioned to study impediments to more effective competition in mobile money markets in four markets – India, Bangladesh, Kenya and Nigeria. The explosive growth in mobile money in a number of countries has made a key contribution to providing the poor with access to financial services. At the same time, in some of these markets, the presence of dominant providers, inappropriate regulations, and other problems may prevent effective competition, to the detriment of consumers and to innovation.

The purpose of the study was to provide the client with insights into (i) potential regulatory or market-based solutions to identified problems; and (ii) how these might be promoted to improve competitive outcomes for consumers of digital financial services (“DFS”).

The team conducted the study by utilising four main tools i.e.:

  • A competition policy framework  based on economic theory
  • An extensive literature review on DFS, payment systems, competition and regulation issues in network industries, and also in multi-sided platform industries
  • Stakeholder engagements in the four countries, i.e., DFS/MFS providers, regulators, banks and mobile network operators (MNOs)
  • Internal financial sector expertise and knowledge provided by the project leader, Richard Ketley  

In addition to various country-specific recommendations, Genesis identified the following cross-cutting priorities:

  • That appropriate regulation is required for USSD pricing. Cost-based pricing of USSD is a critical enabler of competition.
  • Regulators should drive full interoperability between competing MFS platforms
  • Regulatory capacity building is required at the interface between competition law and payment systems regulation to develop the pro-competitive regulatory approaches in future.

Business model for e-wallet customer payments

Project name:
Licence application and business model for an e-wallet and peer-to-peer lender

Service:
Business and operating models

Sector:
Financial services

Client:
A large provider of online retailing and services

Date:
2014

Country:
Nigeria


Genesis was commissioned by a large provider of online retailing and services to examine the regulatory regime of Nigeria, with respect to the launch of an e-wallet for customer payments and the launch of a peer-to-peer lending service. 

The project involved the development of a detailed business plan for each business, and an assessment of the licensing options available for each business, as well as a review of the regulatory model that is evolving globally with respect to peer-to-peer lending. 

Following the advice of the consultants, the business model was reconfigured to take advantage of the card eco-system which would reduce the complexity of operations and the need for additional licences.

Sizing Africa’s Vehicle and Asset Finance (VAF) market

Project name:
Sizing Africa’s Vehicle and Asset Finance (VAF) market

Service:
Market analysis and positioning

Sector:
Financial services

Area of Expertise:
Retail banking
Business banking
Corporate and investment banking

Client:
A large Pan-African bank

Date:
2015

Country:
Angola
Botswana
Ghana
Kenya
Mozambique
Namibia
Nigeria
Tanzania
Uganda
Zambia


A large Pan-African bank approached Genesis to conduct a market-sizing exercise for vehicle asset finance (VAF) across its operations in 10 countries encompassing personal, business and commercial vehicles.

The research focused on a macroeconomic analysis of the 10 countries and the trends that may influence VAF in the future. It also focused on a review of both sector and industry developments to identify opportunities for growth.

A market-sizing exercise was then conducted using import data, regulator information, client data and industry association data. The report also estimated the client’s potential market share based on the trends and gaps in the asset finance market. 

The client used the research to develop its Africa go-to market strategy for VAF products.

Building model for a branchless retail bank

Project name:
Development of an operating model for a new retail bank in South Africa

Service:
Business and operating models

Sector:
Financial services

Area of Expertise:
Retail banking

Client:
Confidential

Date:
2012

Country:
South Africa


The mid-value retail banking market in South Africa is over-traded and highly competitive. 

Any new player would need a clear and differentiated customer value proposition (CVP) in order to acquire a share of the market. In the higher-income segments, retail banking offerings must, in addition, be at the cutting edge of technology, as clients in those segments expect and demand the convenience of digital channels. 

Genesis partnered with an existing specialist bank in South Africa to design an operating model for their proposed retail operations. 

As the bank’s target clientele was professionals in the middle-income segment, the operating model was designed to be cashless and centred around an online offering with call centre functionality to provide back-up. 

Physical infrastructure would be outsourced to existing retail banks.

We designed the bank’s operating model through the following five phases:

 

This process was concluded with the development of a high-level implementation roadmap designed to provide the bank with the key dates and milestones required before going live. It outlined the people, process, technology and infrastructure milestones required to build, test and deploy the retail offering successfully.

Market opportunity analysis for card acquisition

Project name:
Market opportunity analysis for card acquisition

Service:
Market analysis and positioning

Sector:
Financial services

Client:
A global point-of-sale manufacturer

Date:
2014

Country:
Angola
Ghana
Kenya
Mozambique
Nigeria
Tanzania
Uganda
Zambia


Genesis was commissioned by a global point-of-sale manufacturer to investigate market opportunities in eight sub-Saharan countries.

The first step was the selection of the focus countries through a filter of selected macroeconomic indicators: GDP, individual spending power and the level of financial deepening. This resulted in the selection of Angola, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda and Zambia.

The next step was to analyse specific elements of each economy to identify key trends and potential opportunities. The broad areas of investigation were the nature of the banking industry, the possible threat level of the mobile payments space, the strength of the formal retail sector and the possible ticketing and value added service opportunities. All of these areas related to the different product types offered by the company.

The project recommended a targeted deployment by first focusing on core markets and secondly, targeting specific opportunities within those markets with existing offerings. The opportunity in the card space (both point of sale and mobile point of sale) was dwarfed by the possible value-added services and ticketing market opportunity.

Sizing the SA digital banking market

Project name:
Sizing the digital banking market

Service:
Financial institution expertise
Market analysis and positioning

Sector:
Financial services

Area of Expertise:
Retail banking

Client:
A Pan-African bank

Date:
2015

Country:
South Africa


Genesis was commissioned to complete a comprehensive market sizing of the digital banking platforms in South Africa. This involved a market view and a detailed competitor sizing for online channels. 

This project put in context the demand and supply sides of the market in order to gear a large Pan-African bank for innovative digital practices in the future. Genesis, in conjunction with Moxon, developed up-take and adoption predictive models for the bank’s team. 

With this the bank identified customer sets within its client base to actively target for adoption campaigns. We also developed a comprehensive insights report on the digital landscape within South Africa. Specifically, this report touched on the demographics of the country, cellphone, PC and tablet usage statistics, as well as market share analysis of device and digital channel usage. These insights were used by the bank in the development of the bank’s digital strategy.

Assessing SA's ATM market for consolidation

Project name:
Assessing South Africa’s ATM market and opportunity for optimisation

Service:
Market analysis and positioning

Sector:
Financial services

Client:
A large cash-in-transit company

Date:
2014

Country:
South Africa


Genesis was commissioned by a large cash-in-transit company to conduct an end-to-end analysis of the ATM industry and the factors shaping it, with the view to quantify the consolidation opportunity and industry cost savings. 

The top-down analysis estimated the true value of cash in the South African market, using two approaches (Reserve Bank data and bank data). From this a five-year view on cash was formed. 

Recent developments in ATM and cards – such as the effect of SASSA, payment innovations and regulatory changes – were also incorporated into the analysis. The top-down approach yielded a significant opportunity for consolidation.

The bottom-up analysis involved a more detailed quantification of the consolidation opportunity. ATM supply data was extracted from a number of sources and then reconciled to form the most complete data set possible. 

The demand for ATMs was determined at a municipal level through the use of regional data. The supply and demand findings were overlaid to define over-capacity at the municipal level. The significant opportunity for consolidation was verified, however, as the expected magnitude of this opportunity was lower in the bottom-up.

Based on these findings the client presented a detailed opportunity for consolidation to its board.

Merger creates one of Ghana’s biggest banks

Project name:
Merger creates one of Ghana’s biggest banks

Service:
Strategy
Financial institution expertise

Sector:
Financial services

Area of Expertise:
Retail banking
Business banking
Corporate and investment banking

Client:
One of the largest Ghanaian banks

Date:
2014

Country:
Ghana


Genesis was contracted as an external adviser in the merger process between one of the largest local banks in Ghana and an SME finance provider. Genesis was tasked with supporting the integration of two very different companies by helping them to align and optimise their operating model as they began working together.

Genesis provided the firms with an integration framework as well as aided them in defining their thoughts on strategy, given the changing macroeconomic environment in Ghana over 2014. This intervention involved extensive interviews, executive committee meetings as well as a detailed workshop focusing and defining a path forward. The outcomes of the integration were highlighted to the workshop participants. The participants were asked to think of their work streams in the context of the most important key path-dependent outcomes to which they should align their tasks towards integration. This was then used as an overarching mechanism to track interrelated work and ensure a full understanding of the goals of the integration process. This streamlining activity helped the two firms understand their new united objective

The integration ensured that the new bank consolidated its position as number six in the market in terms of asset book, but with one of the largest networks (80 branches, 300 agencies and 96 ATMs) and customer base of over 700 000. The integration was also deemed a success as the new bank was able to retain the majority of the staff and functions from both previous organisations.

The benefits of the merger continue to be realised with the bank continuing to scale the rankings. It is no longer labelled as one of the largest local banks in Ghana, but rather one of the largest banks in Ghana.

Bank gets more customers to go mobile

Project name:
Bank gets more customers to go mobile

Service:
Strategy
Financial institution expertise

Sector:
Financial services

Area of Expertise:
Retail banking

Client:
A large Pan-African bank

Date:
2014

Country:
South Africa


A large Pan-African bank commissioned Genesis to conduct an analysis of the mobile-banking market in South Africa and to craft initiatives to drive rapid mobile adoption, allowing it to achieve aggressive targets set by the executive.

The goal of the project was to develop a clear understanding of the addressable market for mobile-banking applications. In order to do this, the bank’s user base was profiled using the data capabilities of Genesis's former internal analytics specialists, Moxon Solutions. This allowed the bank to identify the characteristics of early adopters, which ultimately led to targeted adoption initiatives in the marketing and channel space.

At the conclusion of the project, the Genesis team was instrumental in setting up a steering committee to bring together various stakeholder groups, all of whom wished to migrate customers from fairly expensive channels, such as branches, to fairly inexpensive channels, such as a mobile-banking app or internet banking.

The client managed to reach the target of one million customers seven months before it had expected to.

Strategy for financial inclusion unit of Ghanaian bank

Project name:
Strategy for the financial inclusion unit of a major Ghanaian bank

Service:
Strategy
Financial inclusion
Market systems development

Sector:
Financial services

Area of Expertise:
Retail banking

Client:
Financial Sector Development Programme Africa (FSD Africa)

Date:
2014

Country:
Ghana


Our purpose was to assist a leading Ghanaian bank's Financial Inclusion Unit (FIU) to deliver on its overarching goal of having five million active accounts by 2018, and to identify ‘capability’ gaps that could potentially be supported by FSD Africa. The analysis involved a market opportunity analysis and internal capability assessment.

While it was clear that the goal was a stretch target, the analysis gave the initiative a green/amber light because, technically, the opportunity did exist and the bank had the three key advantages: it was the first mover in the mass market, it was given special dispensation by the central bank to run an agent network (the only bank in the market) and mobile-money solutions had not yet taken off.

Capability wise, however, the analysis highlighted numerous concerns. The operating model was not scalable (i.e. too many manual processes) and, structurally, the division was set up as a special project with duplicated main-bank functions (such as operations and IT) which substantially increased costs. Furthermore, a poor decision had been made about its IT platforms, i.e. a separate core-banking system had been built, which meant that customers from this segment could not interact with the main bank and vice versa.

The project concluded with the creation of a new organisational structure of a retail banking value chain continuum that eliminated the initial silo nature of the organisation. The business case investigation revealed key issues in terms of sales performances, card functionality and pricing. Together with overall process and systems problems, these formed the foundation for a list of key activities that would need to be undertaken for the unit to improve performance and achieve its goals. These key initiatives were then workshopped with key stakeholders in order to gain consensus and rank them in terms of priority. The bank decided to implement all of our recommendations.

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More information about our practice

Our Financial Services Strategy practice was established more than 15 years ago by Richard Ketley, who is widely recognised as a leading expert on the financial services sector in Africa. The practice is made up of around 20 consultants with backgrounds in financial services and consulting.







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Areas of Service Expertise

  • Strategy
  • Transaction Advisory
  • Market Analysis and Positioning
  • Business and Operating Models
  • Financial Sector Regulation
  • Risk Management
  • Financial Inclusion
  • Financial Institution Expertise
  • Monitoring and Evaluation
  • Competition Economics
  • Applied Behavioural Economics

Related Sectors

  • Retail banking
  • Corporate and Investment Banking
  • Insurance and Asset Management
  • Business Banking
  • Capital Markets
  • Payments

Projects

Project

Mapping out path for local card-processing in SA

Genesis partnered South Africa’s domestic payment switch, BankservAfrica (Bankserv)  to determine how to continue providing card-switching services to the South African market. 

View Project
Project

Making Botswana an investment gateway to Africa

Botswana's Investment and Trade Centre has adopted a roadmap detailing the steps the country would need to take to develop an international finance centre that could match Africa's leader, Mauritius. 

View Project

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Leading the team

Richard Ketley

Director and Managing Partner (Financial Services Strategy)

Richard Ketley
Director and Managing Partner (Financial Services Strategy)
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Neil Lightfoot

Partner (Applied Behavioural Economics)

Neil Lightfoot
Partner (Applied Behavioural Economics)
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​Alyna Wyatt

Partner (Evaluation for Development)

​Alyna Wyatt
Partner (Evaluation for Development)
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