Two-thirds of the world’s population has a mobile subscription and the number of people using the internet via mobile phones has doubled over the last five years to 3.6 billion people. Yet, even as feature phones and smartphones are increasingly ubiquitous, 3 billion people are still left out of or poorly-served by the formal financial sector and their lives are so much harder because of that. They lack the basic tools they need to manage their day-to-day activities, navigate a crisis or seize an opportunity. Figuring out how to use mobile phones to provide these basic financial services to all of those left out is an important and urgent issue we must resolve in order to create a financially inclusive world.
That’s the challenge I tried to address in Madrid last week at MoneyConf, a summit focusing on fintech and the revolution in money, payments, and finance. I joined WiredUK Senior Editor Victoria Turk and WorldRemit Founder and CEO Ismail Ahmed for a discussion titled “Unbanked on a Global Scale.” You can watch our full conversation below:
WorldRemit's Ismail Ahmed, Accion's Michael Schlein and WIRED UK's Victoria Turk:Around the world, three billion people are left out of or poorly served by the formal financial sector. They struggle in or near poverty and can not fully contribute to or benefit from the global economy. But emerging technologies are making it easier than ever to change that and to build a financially inclusive world. Mobile phones, the internet, alternative data credit analysis, factoring, payments, and other innovations are combining together to provide high-quality, low-cost financial services to those who need them most. This conversation will provide an expert look at the underbanked on a truly global scale that asks the question: what will it really take to provide affordable and accessible financial services to all?
Posted by MoneyConf on Tuesday, June 6, 2017
Fintech is changing the way we can imagine the future. Mobile phones, the internet, alternative data credit analysis, the blockchain, machine-to-machine technologies, and other innovations are combining together to potentially create high-quality, low-cost financial products and services to those who need them most. They allow financial service providers – including new startups and legacy institutions – to reach customers who for too long have been ignored.
As I explained at MoneyConf, we’re using fintech to address key financial inclusion challenges. One way that we’re harnessing innovation is by focusing on micro, small, and medium enterprise (MSME) financing. Around the world, MSMEs face a $2.6 trillion financing gap. These very small businesses are generally too small for traditional lenders and too large for microfinance and as a result can’t obtain the financing they need to grow and serve more people.
But new technologies can help small businesses to grow. Accion’s seed stage impact investing initiative, Venture Lab, has partnered with more than a dozen startups that use alternative data, improved analytics, and predictive modeling to improve small business’s ability to find new clients, underwrite and fund loans. Doing so gets mom-and-pop stores, entrepreneurs, and small businesses the help that they need.
We also help established organizations integrate technology. In Myanmar, we’re working with our partner DAWN to expand its reach significantly. In the past, DAWN calculated and recorded its clients’ activity – including savings, repayments, and principals – by hand. This paperwork used to take 4 hours per day. With our help, DAWN has been able to integrate technology and improve operations. That same paperwork now only takes 20 minutes. DAWN has more than tripled its client base since 2015. And with Myanmar adopting smartphones faster than anywhere else on earth, we’re helping DAWN prepare for the country’s mobile money future and reach even more clients.
But we need far more resources and support for inclusive fintech to help the world’s poor. We discussed how we can use big data to learn more about our customers and create better products. We also encouraged more organizations to partner together to find new ways of collaborating.
This is such an exciting time to see what fintech can do to accelerate financial inclusion. We’re only at the very start, and I’m thrilled to see how new innovations will continue allowing developers to create better, faster, cheaper, and safer financial services that benefit us all.