The underbanked refers to individuals who do not have access to mainstream financial services. These individuals highly rely on other services like payday loans, money orders, etc for their finance management. These services are preferred by these individuals over loans from banks and credits cards. But the high interest rates and strict repayment conditions often lead them into a debt trap which can be extremely hard to come out of.
Read More: GlobalFintechSeries Interview with Nasser Chanda, CEO at Paymerang
How to Enable Better Financial Inclusion for the Underbanked?
One of the best ways for financial inclusion is through the help of technology. Many kinds of financial services can now be offered to people all around the world through better financial technology. Banks, fintech companies and telecom operators are now offering their services to customers through mobile phones. This helps people all around the world who are underbanked to get access to financial services at a low cost and via a universally accessible medium.
The digital age has indeed brought many kinds of innovations that have benefited people all around the world. The digitization of financial services has proven a great help to many families and individuals. Financial inclusion is beneficial not only to the people but also to local governments. There is an increase in job stability for the people and an economic stabilization for the government. The integration of well-known financial institutions with start-up Fintech companies brings the benefit of improvement to the lives of the underbanked communities.
Top Global Fintech Providers Enabling Better Financial Inclusion for the Underbanked
Some of the top global fintech companies that provide financial inclusion to the underbanked include:
-
DFT Empower
This US-based start-up offers formal financial services to the underbanked. They offer various kinds of payments, credit, savings, deposits, loans, and insurance products to communities that are underbanked. This start-up promises inclusion by providing financial institutions with biometrically-verified identification. This is done through a mobile phone camera that acquires fingerprints and verifies them with the national databases. This allows institutions to meet their regulations without requiring a physical presence of any individual.
-
e-Farms
e-Farms is a Nigerian start-up that is looking to provide financial services to farmers and agricultural investors through an online platform. This start-up links investors to different farmers all around the country who are underbanked and need financial services. Investors interested in the farms that have been linked with can invest on the farm to increase productivity.
-
Akaboxi
Based in Uganda, this Fintech company encourages communities to use financial services. This company provides management and monitoring of the people’s monetary savings, transactions and saving groups. It is working towards finding and developing affordable services to the people of Africa.
-
Teknospire
This start-up is based in India and is looking to provide financial services to small and medium enterprises that are affordable and secure. The company’s technological platform offers financial institutions the chance to increase engagement with rural and remote communities all across the country. These financial institutions can extend their basic financial and banking services to all corners of the country.
-
InfoCorpÂ
InfoCorp is a Singapore-based fintech company. This financial platform gives underbanked communities the opportunity to receive financial services using livestock as collateral. This gives farmers the opportunity to increase livestock while maximising benefits at the same time. Farmers are able to use their livestock as a means to receive financial services.
Read More: GlobalFintechSeries Interview with Dr. Vincent Pignon, CEO at Wecan Group
There are many fintech companies and start-ups all around the globe that provide similar financial services like these.Â
