Stock photo of an Apple iPad, a Kindle HD and a Samsung Galaxy S3 android phone. (Photo by Nick ... [+]
PA Images via Getty ImagesCombining financial products and services with new technologies (i.e. fintech) is often hailed as the solution to the issue of exclusion from formal financial institutions and infrastructures. And in some circumstances, it is.
Providers such as Pockit have found ways to deliver digital financial accounts to those with no set address or local documentation, that allow them to hold, send and receive money electronically. These people were historically denied accounts by most formal financial institutions, and therefore unable to access the financial products and services they needed to participate in everyday life. Therefore Pockit and its peers are enabling financial inclusion.
Other providers like Credit Kudos have found ways to assess people’s creditworthiness using data sources other than formal credit scores, accessed via open APIs. Credit Kudos’ customers can then extend credit to those who would previously have been unable to access it. Again, this is boosting financial inclusion.
However, one huge factor in financial exclusion we fail to consider in places like the UK, EU and the US is connectivity. Many financial inclusion solutions rely on the excluded person having access to the internet. But in many cases, that simply isn’t the case.
A recent report from the UK’s Select Committee on Covid-19 found that 11% of households in this country do not have access to the internet. That’s 2.8 million households. 9 million individuals are unable to access the internet on their own and almost half of this group have a disability or long-standing health issue.
MORE FOR YOU
These people are more likely to be living on low incomes, or in absolute poverty. They are the ones who need the innovative financial solutions that enable access to cheap credit, fee-free accounts and credit-building solutions. But without the internet they remain excluded.
We need to bear this in mind as we talk excitedly about the potential for financial inclusion Open Finance promises, or the benefits of “cashless societies”. Many of the solutions dreamed up by innovators in financial services assume everyone has access to the “tech” needed to deliver the “fin”.
This is not the case in many parts of the world, innovators across Africa, Latin America and Asia are aware of the great inequalities in access to both devices and connectivity. They have found ways to provide financial products and services using the most basic of devices and existing mechanisms such as networks of agents.
Some examples:
- Kiva, a crowdfunding platform that enables users in the US to lend to entrepreneurs around the world. Borrowers can apply online, or if they have no access, through one of Kiva’s Field Partners on the ground in their region.
- DreamSave, which operates across the regions listed above, enables groups to effectively run community banks — to save together, build credit scores and learn financial literacy. One Android smartphone is needed per group, but the app runs offline, updating when connectivity becomes available.
Those of us in regions where connectivity is more common need to remember to look outside of our immediate environment for inspiration when it comes to financial inclusion — there is a lot we can learn from solutions developed in other environments. And we need to keep in mind those 11 million UK households, and many more in the US, that don’t have access to the internet. We can’t leave them behind in our race towards digitalising finance.
The Link LonkApril 22, 2021 at 03:47PM
https://www.forbes.com/sites/sarahkocianski/2021/04/22/one-thing-we-often-forget-about-financial-inclusion/
One Thing We Often Forget About Financial Inclusion - Forbes
https://news.google.com/search?q=forget&hl=en-US&gl=US&ceid=US:en
No comments:
Post a Comment