What does Financial Inclusion Mean to Us?
Two months ago, I landed in beautiful Dar es Salaam to work with NALA for the summer. Beyond the chaos of immigration at Julius Nyerere International Airport, I knew an opportunity to immerse myself in a growing industry awaited. I have been fascinated by fintech in Africa for some time now. My initial exposure to the industry was through a lending company operating in Ghana. The company provided microloans to government employees and deducted the payments directly from their salaries, building a credit report for each user in the process. This was an important step towards financial inclusion but many citizens in the country, and many on the continent, did not have access to that service or even more basic financial services. With financial inclusion becoming a buzzword almost every fintech is using, we have to ask ourselves, who is currently missing from the fold? And how do we achieve full financial inclusion?
Prior to joining NALA, I pondered if there were any companies on the continent that were simultaneously impacting citizens in both urban and rural areas. I came across companies which focused on farmers in rural areas, informal sector workers & merchants in cities. What surprised me the most about NALA is the reach and the type of customers that use the application. We recently held user interviews with the World Bank’s Consultative Group to Assist the Poor (CGAP) to evaluate the impact of the NALA app on mobile money transaction levels in Tanzania. I was surprised to see the variety of user backgrounds in the interviews; from students, to merchants, to traders and farmers. They were drawn in by the application’s offline feature and the simplification it provided for transactions compared to the typical USSD protocol used for most transactions in the country.
Some curious users inquired when the app will enable them to directly integrate into the global marketplace, using their mobile money wallets to transact on the Alibaba’s and Amazon’s of the world. Although this is already starting to take place, we still have to ensure that focus on the primary objective of financial inclusion is maintained. Financial inclusion, in my opinion, is key to inclusive development. It formalizes and unleashes citizens’ purchasing power, enabling them to complete everyday financial transactions more efficiently and securely. More importantly, in line with the second National Financial Inclusion Framework, it ensures “that consumers are informed and protected [thereby] encouraging the design and development of demand-based solutions” that are essential to alleviating the binding constraints on Tanzania’s economic and social development. I am excited to see how we can contribute to this national objective and what we can accomplish at NALA this summer!
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About the author:
Abdul Abdirahman is a joint degree student pursuing his Master in International Development (MPA/ID) from the Harvard Kennedy School and an MBA from Stanford Graduate School of Business. Prior to pursuing his graduate degrees, Abdul worked in Ernst & Young’s Financial Services Office in New York & London for five years, providing Assurance & Valuation services to emerging markets focused asset managers.
This summer, Abdul came back to East Africa after 18 years abroad to work with NALA in Dar es Salaam, Tanzania and Beyond Capital Fund in Nairobi, Kenya. Although originally from Somalia, Abdul is an individual with a global mindset having lived, studied and/or worked in four continents thus far. His aim is to take his understanding of the finance industry to work with organizations and governments in East Africa to assist with financial inclusion and private sector & economic development. During his free time, Abdul enjoys traveling, reading about technological innovations and mentoring our youth.
