Financial Inclusion in Africa Demands the Human Touch

May 6, 2019 · 3 min read

The World Bank Group has identified financial inclusion as a key enabler in reducing extreme poverty and boosting shared prosperity globally. It had an ambitious goal (not likely to be achieved at this point) of “Universal Financial Access” (UFA) by 2020. Given that 2020 is just over six months away, adjusting that goal to adopt a more realistic deadline is clearly called for.

But the need remains critical. The Bank’s the Global Findex Database found close to one-third of all adults globally (about 1.7 billion people) remained unbanked as of 2018. The Bank further estimates that half of these are women, members of poor households in rural areas, and/or those who are not a part of the workforce. (Figures published on in April)

Digital financial services play a major role in the increase of financial inclusion in Africa. “The number of new FinTech users has increased by 250% to 7.2 million in 2017 from the 2012 baseline. This led to the growth of financial inclusion in Africa from 23% in 2011 to 43% in 2017.”

However, the report estimates that 370 million people still remain unbanked and under-served out of a total population of about 600 million.

This gap is not evenly spread across the continent, of course. In Kenya, which is the African leader in FinTech innovation, M-Pesa and other initiatives have led to over 81% of people 15 years+ to have access to at least basic financial services in 2017, up from under 40% in 2011. This is impressive growth driven by FinTech innovation! In second place, according to the Medici report, stood Nigeria, with 40% of Nigeria’s adult population financially included. Unlike in Kenya, World Bank figures find that only about 3% of that 40% are tapping into financial services via mobile apps. This means there is still quite a bit of fertile ground for start-ups like BitMinutes Nigeria to make fast inroads with its mobile banking app.

As medici writers themselves noted a couple of years ago (comments that are still relevant today), software innovation and easy-to-use apps are just a first step. Their mere existence is not sufficient to ensure widespread adoption by a less digitally savvy general population, especially in more rural communities. This demands human intervention in the form of education and lots of “customer service” help (one of the reasons BitMinutes Nigeria is building a human network of Trusted Agents (TAN Agents) to help community members adopt financial services that these people are both unfamiliar with and leery of. As the M-Pesa experience proved, human networks built trust in innovative yet unfamiliar software networks!

Given the high percentage of mobile phone ownership in Africa, FinTech startups have a great delivery system already in place (and growing quickly). A major chunk of the population is still underserved and unbanked, yet they are already connected to the most efficient channel for delivering modern financial services. If the trust-building and educational needs of the targeted communities can be met through the creation of a dedicated human network of agents, tapping this marketplace’s huge and immediate potential makes for exciting times in African FinTech and mobile banking!

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