The latest innovations in Asia for the financial inclusion of the Bottom of Pyramid
According to World Bank data, 2 billion of the world's population lack access to formal financial services, with 95% proportion of developing countries. Financial inclusion seeks to involve these people in the economic and social system to ensure stability and thus promote human development goals.
With a good mix of public institutions, corporations and startups, the Financial Inclusion Summit Asia 2016, now rebranded Seamless, gave an overview of the emerging trends that are meant to encourage inclusive growth in the financial industry and help the unbanked and under-banked communities, especially in developing countries.
Global findex data infographic – this index from 0 to 100 provides in-depth data on how individuals save, borrow, make payments and manage risks, based on interviews with about 150,000 adults in over 140 countries (The World Bank , 2014)
Social media and messaging apps to help solve the problem of identities credibility
Companies and individuals are each striking out on their own to try and solve the problems of financial awareness, literacy, and empowerment. People all around Southeast Asia, from rural villagers to Gen Z fresh graduates, are struggling with managing their finances.
Arvinder Grewal, the Head of Operations of Wave Money in Myanmar highlighted the role of apps such as Facebook and Viber in reaching out to the wider rural population. Wave Money addressed this credibility issue by asking customers to send a photo of their ID cards as proofs of identity which has helped in the digitization process of Myanmar's highly cash-based environment.
The social media credit scores startups Lenddo and Uangteman are changing the game by analyzing non-traditional forms of data to evaluate the credibility of their customers. Data compilsed from sources such as social media and web browsing create a profile of the customer which is then analyzed via machine-learning technologies to present a credit score. This credit score evaluates the likelihood of repayment and the subsequent extension of a loan to the said customer.
Cashless transactions to increase participation in the financial system
Despite all the challenges involved in the financial inclusion of the unbanked population, Singapore-based Nearex has still managed to emerge as a startup with payment hardware specially geared towards the rise of micro-merchants. Its goal is to bring everyone into financial inclusion. It has developped Xip, a mobile micropayment solution that has been successfully tested in developing countries such as Zimbabwe and Tanzania.
“Nearex is geared as a technology provider to micro-merchants who have traditionally relied on cash. We want to enable their access to funds by going mobile so we work with existing wallets and integrate with back-end technology to offer a fully integrated solution to merchants in developing payment ecosystems” explains Mayank Sharma, CEO and founder of Nearex, in an interview to Innovation Is Everywhere.
“We started out with micro-merchants in Zimbabwe and Tanzania by allowing payments using our devices via a XipTAG, an NFC sticker with stored value. Currently, we are expanding into transport payments for the unorganized public transport networks worldwide such as the auto rickshaw in India, motorbike taxis across Africa, Tuk Tuks in Thailand and Jeepneys in the Philippines. Nearex has noted that these merchants encountered the same problems with collecting and handling cash as their organized counterparts.”
The solution is built around the award-winning XipPOS which can collect money even with no connectivity. Nearex has focused on affordability by reducing transaction costs for merchants to promote its continued adoption.
To learn more about the strides we're making in financial literacy, make sure to stop by one of our community events at Found.
Caption: XipPOS device