Led by an independent judging panel of experts, the Inclusive Fintech 50 initiative looks for early-stage fintechs in advanced or emerging markets that offer a solution among credit, insurance, payments and remittances, savings and personal financial management, or infrastructure addressing special challenges of underserved customer segments.
The global pandemic has underscored the importance of having access to financial services, which act as a stabilizing force for low-income households and businesses. Fintechs play an important role in expanding access to these vulnerable populations, but these startups themselves need access to capital and connections. <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener">Inclusive Fintech 50</a> makes these startups more visible to investors and partners who can help them reach more of the 3 billion financially underserved people.

Visit inclusivefintech50.com for key dates, past winners, the Investors' Network, and much more.

VISA

MetLife Foundation

Jersey Overseas Aid / Comic Relief

Accion

International Finance Corporation

Sponsors & Partners

Julia Arnold

To further illustrate this point, below are profiles of two Inclusive Fintech 50 winners that both have similar missions to serve underserved, unbanked rural communities with access to payments or financial services. While a majority of their customers are women, neither fintech set out to specifically target them. Were these fintechs to focus further on their female clients’ needs and preferences, they could potentially reach more women and provide them with beneficial services.
<h2>Paycode</h2>
Headquartered in South Africa, Paycode offers last‑mile delivery financial services technology solutions to unbanked populations offline in real‑time. Paycode links government social payments, mobile money, or payments to farmers or rural recipients without a formal bank account. The company addresses three key needs among rural populations: lack of formal identification, little to no connectivity, and high cost of service delivery. To do this, Paycode offers end users a biometric-linked smartcard which can be used at point-of-sale (POS) machines. Since a vast majority of end users live in remote, rural places, Paycode brings the POS to rural villages by putting cash machines on the back of pickup trucks. This branchless banking model is designed to work entirely offline — end users confirm their identity, access their accounts, and withdraw their funds with no internet or mobile connection. Their transaction data is uploaded when the Paycode employee reconnects to the internet.
Several aspects of Paycode’s delivery model and design unintentionally meet some of women’s unique needs. First, introducing a new technology in a rural setting, particularly one involving so many moving parts (fingerprints, smartcards, POS, etc.) can be tricky. Building trust among users can take time. Before going into a community, Paycode scopes the village to understand the needs of potential customers as well as identify and train locals who can act as facilitators on behalf of Paycode. When ready, Paycode provides all the necessary equipment and systems to onboard a customer and issue them with a biometric smart card on the spot. The onboarding process takes a total of seven minutes.
<blockquote class="pullquote--right">Several aspects of Paycode’s delivery model and design unintentionally meet some of women’s unique needs.</blockquote>
Another innovation involves the biometric ID itself. End users are onboarded using their fingerprints — to verify their identity and proof of life. End users select a finger to act as their primary ID. They also select up to three individuals to act as a back-up in case their fingerprint is unreadable (many smallholder farmers have rough hands and fingerprints can be tricky to obtain). In addition to selecting proxies for access, end users also select an “alert” finger — a risk mitigation strategy that silently triggers a false low balance in their e-wallet while simultaneously alerting Paycode’s system of a potential theft. This risk mitigation strategy was designed to mitigate the threat of gun violence, but it also provides safety and control for female end users if their male partner attempts to co-opt their funds.
Both these aspects of Paycode’s business, and particularly the alert finger, meet women’s specific needs, even if they weren’t designed with that intent. Control over income or assets can be particularly challenging for women in light of informal rules that, for example, may expect a woman to hand over her money to her male partner. The alert finger enables her to navigate economic violence that could potentially escalate into physical violence while maintaining control over her assets.
<h2>Extramile Africa</h2>
Extramile Africa targets savings groups in Nigeria by offering increased security of their funds and the ability to earn interest on their savings. <a href="https://mangotree.org/what-are-savings-groups" target="_blank" rel="noopener">Informal savings groups</a> such as rotating savings and loan associations (ROSCAs) are common throughout the world and have mostly female membership. These groups are an informal way for women to save, collect lump sums of savings, and access a form of credit.
Extramile targets two segments of women: smallholder farmers who make up the ROSCAs and women-run microbusinesses who make up two-thirds of their merchant network. The savers receive free and ongoing extension services, including advice at planting, harvest, and selling. The assistance is meant to ensure market linkages for farmers to sell their goods, which can be difficult or unpredictable for many smallholders. The savers transact — make deposits as well as withdrawals — with any Extramile merchants, who tally their savings on a unique ID card and are paid a small sum to take all the cash weekly to a bank, a sometimes two- to four-hour bus ride.
Savers must have a basic feature phone on which they receive SMS confirmation messages about their deposits. The use of technology increases transparency and security among group members, mitigating group infighting around transactions and savings totals, as well as improving financial accountability among savers. Extramile also created an app on which their merchants, who must have smartphones, can provide offline deposit taking and withdrawals. Extramile also uses the app to identify farmers or microbusinesses in each community with whom to invest part of the total savings by analyzing savings transaction data linked to each user. Profits from the investments are shared out every six months, with savers and farmers or businesses receiving 40 percent each, and Extramile receiving 20 percent as part of a sustainability strategy. This investment scheme enhances the economic resilience within communities.
To gain the trust of communities served, Extramile targeted community leaders and held community-wide meetings where they provided food and offered agricultural technical assistance. Extramile banking partners provided POS machines that Extramile brought to the community meetings to familiarize the community as well as train merchants how to use them. Their farmer co-ops and groups are targeted for onboarding as well as for financial management information around their savings behavior — for example, given that their savings are leaving their hands, they are told to keep cash on hand for daily expenses.
<blockquote class="pullquote--right">Extramile addresses the insecurity of women&#8217;s funds through placing some of it in bank accounts</blockquote>
Like Paycode, some of Extramile’s design choices benefit women. Savings groups are primarily made up of women and are a critical, if insecure, means to save cash outside of homes. Extramile addresses the insecurity of their funds through placing some of it in bank accounts, improves group members’ knowledge through financial and agricultural education, and even provides another income source through community investments. Targeting female merchants is similarly beneficial as these are usually lower-resourced businesses than male-run counterparts. Extramile improves female merchants’ technological capacities and adds income sources by paying merchants to make the trek to urban centers and through profit-sharing.
<h2>Adding a Gender Lens</h2>
Both Paycode and Extramile have been successful at embedding a deep understanding of rural livelihoods into their product design. Through mobile cash machines or providing a secure way to save, these two businesses clearly seek to address the informality and related vulnerability of their customers’ lives. They also clearly understand that building trust is foundational to their work, addressing it with community engagement or on-the-spot proof of concept. Given the fact that women make up a majority of both companies’ clients, going further to understand women’s lives, economic needs, and constraints will increase both the impact of their services and the growth opportunities for their businesses. Fintechs are uniquely positioned to take a gender-intelligent approach to design: they are close to their customers, collect all sorts of customer data which they can use to build products for women’s needs, and have the <a href="https://www.centerforfinancialinclusion.org/rapid-innovation-how-fintechs-are-adapting-under-covid-19" target="_blank" rel="noopener">flexibility to pivot and experiment</a> when necessary.
<blockquote class="pullquote--left">Going further to understand women’s lives, economic needs, and constraints will increase both the impact of their services and the growth opportunities for their businesses.</blockquote>
For Paycode, that might look like providing parallel investments in financial and digital capability in ways to enhance their primary business of cash disbursement. Due to the constraints they face, women are often less literate or lack key skills compared with men that are needed to <a href="https://link.springer.com/article/10.1007/s10708-019-10098-y" target="_blank" rel="noopener">increase their incomes or yields from their agricultural labor</a>. Financial capability is critical to women’s and households’ long-term financial health. Partnering with financial experts or training local agents to provide financial information — ideally linked to a financial service — and digital literacy that may encompass uses of technology beyond Paycode’s specific services would greatly increase women’s inclusion and increase their capability to use Paycode’s products. Digital capability may also include designing for the fact that <a href="https://www.pciglobal.org/wp-content/uploads/2020/09/DSG-Study-Brief-Impact-of-gender.pdf" target="_blank" rel="noopener">mobile phones are often a shared resource</a>, and thus any messaging or nudges might be seen by more than just the intended recipient.
Building out organizational partnerships to meet the full range of customer needs is critical, and this has become essential during the <a href="https://www.centerforfinancialinclusion.org/rapid-innovation-how-fintechs-are-adapting-under-covid-19" target="_blank" rel="noopener">COVID-19 pandemic</a> for fintechs and customers alike. Partnering with a microfinance institution or savings association with formal financial linkages may help build healthy behavior and provide a customized experience for Paycode’s end customers. Paycode and Extramile could partner with agricultural small and medium enterprises (agri-SMEs) that often provide training and also financial services (i.e., credit) to farmers. Customer transaction data from both fintechs can be used as an alternative credit score for women to get access to capital they are disproportionately excluded from. Extramile could offer this type of service by leveraging data on savings behavior for lines of credit to be reinvested into the communities. Finally, both fintechs could seek out ways to address some of women’s non-economic constraints, such as the intra-household power dynamics around household budgets and expenditures that often hand control over to male partners. Addressing these dynamics as it pertains to economic decisions takes specific training, and Paycode and Extramile could partner with trained facilitators to have information sessions with customers. These types of <a href="https://www.tandfonline.com/doi/full/10.1080/09614524.2019.1651251" target="_blank" rel="noopener">parallel investments</a> have been known to improve women’s financial inclusion and overall household economic well-being. Women’s financial inclusion is only as deep as women’s ability to <a href="https://www.scribd.com/document/398638800/Kabeer-Gender-Livelihood-Capabilities" target="_blank" rel="noopener">make decisions over their financial assets and see those decisions through to their completion</a>.
<blockquote>Both fintechs could seek out ways to address some of women’s non-economic constraints, such as the intra-household power dynamics around household budgets and expenditures that often hand control over to male partners.</blockquote>
Gender-blind digital financial technology can and does reach women customers. However, <a href="https://www.cgap.org/blog/personas-show-how-social-norms-impact-womens-financial-inclusion" target="_blank" rel="noopener">embedding women’s unique needs and constraints</a> into product design enhances women’s inclusion, ensuring their lived experiences are accounted for, thus making a financial product more meaningful to each customer and more valuable for the business. Fintechs like Paycode and Extramile have already done the difficult work of innovating to reach these last-mile populations — they are in the ideal position to make adjustments to their design that account for their female customers’ wants and needs. By gathering information on their female clients’ financial constraints, habits, and dreams, they can strengthen their impact on individual clients and their communities and take their businesses to new heights.
&nbsp;

Inclusive Fintech 50 Sponsors

Brief

For low-income women, digital financial inclusion offers an opportunity to upend entrenched gender inequalities by entering spheres from which they have been otherwise excluded. Financial services delivered via mobile phone can bridge the last-mile gap, bringing financial tools and services directly to women where they work and live. However, women are underrepresented customers of digital financial providers and platforms. Well-established impediments such as cost, literacy, and normative barriers (that shape the way people behave and expect others to behave) prevent low-income women from using such services at the same rate as men. These demand-side constraints, combined with a dearth of sex-disaggregated customer data, leave most fintech firms without a clear picture of women’s wants and needs for digital financial tools. As such, most mass-market tools are not designed with women in mind.
<blockquote>Demand-side constraints and a dearth of sex-disaggregated customer data leave most fintech firms without a clear picture of women’s wants and needs for digital financial tools.</blockquote>
It’s not just digital financial inclusion: Fewer women than men have access to formal bank accounts and mobile technology. Globally, 65 percent of women, compared with 72 percent of men, have bank accounts, while 197 million fewer women own a phone than men, according to the <a href="https://www.gsma.com/r/gender-gap-2019/" target="_blank" rel="noopener noreferrer">GSMA Mobile Gender Gap Report 2019</a>. Regional variations make these gaps more striking. In Sub-Saharan Africa, for example, home to many promising emerging market fintech innovations, the mobile gender gap is 15 percent, while in South Asia (including Pakistan, India, and Bangladesh) the gap is 28 percent. Further, access to formal bank accounts is extremely low across Africa. For example, the gender gap in account ownership in Kenya, according to the table below, looks to be only about 8 percentage points. However, the gap widens when adults with only a mobile money account are disaggregated from formal bank accounts and mobile money accounts. Around 65 percent of men in Kenya have both a formal bank account and mobile money account, while only 50 percent of women do. Interestingly, the gender gap in adults with only a mobile money account is reversed; more women than men have only a mobile money account, likely because the barriers to entry are lower than for a formal bank account. This trend can be seen throughout Africa.

<img class="aligncenter size-full wp-image-41359" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/Sample-of-countries-in-Africa-Table-VF2-800.png" alt="table " width="800" height="412" />

Given the gender gaps in bank account ownership and mobile technology, it is not difficult to see why many fintech firms do not have visibility on how to better serve women. With fewer women users, and little to no sex-disaggregated data around how women’s use of and needs for these products differ from men’s, it can be difficult to identify low-income women’s needs and preferences. Excluding women is often unintentional — “gender-blind” design is thought of as an inclusive strategy. If “bias” is not baked into the design, the thinking goes, then anyone who wants to use the product can. Unfortunately, the opposite is true. Gender-blind product and platform design strategies allow products to flow in the way they always have: into the hands of those who are already in the marketplace and who make the decisions about who else can benefit from or access these products. A “gender-intelligent” or “gender-aware” approach, on the other hand, seeks to overcome women’s specific constraints through <a href="https://financialallianceforwomen.org/download/how-fintechs-can-profit-from-the-multi-trillion-dollar-female-economy/" target="_blank" rel="noopener noreferrer">data-driven design based on market research</a> in order to create distinct customer value. And the numbers in the table demonstrate that men disproportionately benefit from bank accounts and mobile technology.
<blockquote class="pullquote--left">We show the potential of gender-aware design, and how to design for specific needs and constraints of women, while accounting for the norms that define their lives.</blockquote>
This brief examines design principles employed by two fintechs, <a href="https://paycode.com/">Paycode</a> and <a href="https://extramileafrica.com/" target="_blank" rel="noopener noreferrer">Extramile</a>, working in Sub-Saharan Africa. We show the potential of gender-aware design, and how to design for specific needs and constraints of women, while accounting for the norms that define their lives. These two examples provide insights into why intentionally focusing on women can bring benefits to this largely untapped market and how fintechs can design products that meet women’s needs. Only by improving women’s meaningful use of financial services through concerted efforts to close the gender gaps will low-income communities and households begin to see potential economic benefits from inclusion, benefits that will also flow back to the providers that serve them. It is vital that fintechs move away from gender-blind or -neutral strategies toward gender-aware <a href="https://www.ifpri.org/publication/beyond-access-gender-transformative-financial-inclusion-agriculture-and-entrepreneurship" target="_blank" rel="noopener noreferrer">and even transformative strategies</a> that bake in access pathways for potential customers with limited knowledge or physical mobility. <a href="https://medium.com/hh-design/the-world-is-designed-for-men-d06640654491" target="_blank" rel="noopener noreferrer">Gender-blind design is not gender-neutral</a>.
<h2>Fintechs in Sub-Saharan Africa and a Gender-Blind Approach</h2>
According to data collected by <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50</a> (IF50) -- a competition founded by MetLife Foundation and Visa, with support from Accion and IFC, and additional funding from Jersey Overseas Aid &amp; Comic Relief -- only six of the 403 fintech applicants claimed women as their target customers. Most applicants selected “rural households,” “MSMEs,” or “low-income individuals” as their target market. This belies the fact that all of these fintechs reach women — for many of the IF50 winners, women make up nearly 50 percent of their customers. Indeed, women make up a large proportion, if not the majority, among those market segments.

This trend continues among the IF50 fintechs focused on the African continent. Of the 2020 winners in Africa, the product and livelihood focus ranged from mobile banking, water and utility payments, mobile-based crop insurance, and a range of credit and savings products directed at low-income populations. For example, OKO secures the income of farmers of unirrigated farms in Mali and Uganda through a mobile-based crop insurance that automatically compensates them if they suffer from adverse weather.

<img class="alignright wp-image-41342" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/Social-Norms-Table-VF-1005x1024.png" alt="" width="400" height="407" />Within the profile descriptions of the 15 IF50 winners based in or delivering services in Africa, their customer segments were primarily described as “unbanked,” “underserved,” or “low-income.” A few mentioned women, but most called out their customers by their lack of access to financial services. Only three out of the 15 mention women in their key problem statement, while eight mention “unbanked” populations. Identifying women as their target market is not a requirement, even if women make up nearly half of their customers. But by calling out their target customers in terms of livelihood rather than by gender, these fintechs may assume that every “unbanked” person or MSME has the same level of access to their products. This is rarely, if ever, the case.

If these fintechs do not see women as their target market, how do they reach so many women? Gender-blind product design does not translate into complete exclusion — but it does mean that a product is more likely to reach and work well for certain segments of customers, namely men. Gender-blind design can be seen in mass-market items like car seatbelts and mobile phones as well as digital financial tools such as chatbots with basic financial literacy information or a mobile wallet. In some cases, targeting certain livelihood segments may lead fintechs to see where their design is ill-suited for their women customers and make adjustments. In 2019, <a href="https://www.uncdf.org/article/5171/uncdfs-sprint4women-design-sprint-competition-to-increase-zambian-womens-financial-inclusion-kicks-off" target="_blank" rel="noopener noreferrer">UNCDF hosted a design sprint in Zambia</a> for fintechs seeking to increase their female customers — the finalists all designed and modified their products after interacting with women customers. In other cases, women may in fact be a central target segment, but aspects of a woman’s life, such as normative constraints (like care responsibilities or intra-household decision-making), and thus the product doesn’t achieve desired inclusion or impact.

The Case for a Gender-Intelligent Approach: An Opportunity for Inclusive Fintechs

Tess Johnson

<h2>Providing a Lifeline to Mobile Money Agents</h2>
Mobile money agents serve as the infrastructural backbone of the mobile money system and are brand ambassadors of digital finance providers. They are often a community’s <a href="https://centerforfinancialinclusion.org/uniting-tech-and-touch-why-centaur-products-are-better-for-consumers-and-providers-evidence-from-kenya/" target="_blank" rel="noopener">human touch point</a> to mobile money, helping build their communities’ capabilities in mobile money services and products. Agents provide essential services to individuals and businesses in rural and other difficult to reach areas not served by traditional financial institutions, but are limited by their own liquidity. Many agents tend to have a limited amount of cash on hand — approximately two months’ worth in Kenya, for instance — to be able to buffer against any emergency or shock, founder and CEO Andrew Matua said in a December 2020 interview.
In serving a network of more than 7,600 mobile money agents across Kenya (and soon Tanzania), the majority of whom run microbusinesses of their own in addition to their mobile money businesses, PesaKit has a deep understanding of the links between financial resilience and financial health, and crucially the interconnectedness between the microentrepreneurs’ household finances and the businesses themselves. PesaKit’s goal is to strengthen their agents’ defenses against emergencies or shocks by building a safety net of Ksh 15,000 to Ksh 60,000 so that agents and their families can sustain themselves for a period of one to four months without any income.
<img class="aligncenter size-large wp-image-41299" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/PesaKit-Overview-V3-929x1024.png" alt="pesakit overview" width="929" height="1024" srcset="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/PesaKit-Overview-V3-929x1024.png 929w, https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/PesaKit-Overview-V3-272x300.png 272w, https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/PesaKit-Overview-V3-768x846.png 768w" sizes="(max-width: 929px) 100vw, 929px" />
To accomplish this, after completing a simple onboarding process, PesaKit equips agents with liquidity management tools, which are crucial to agents’ ability to build and maintain trust with their customers. Liquidity management remains a notoriously difficult challenge in operating mobile money agent networks, and as noted by PesaKit founder and CEO Andrew Mutua, liquidity is “actually what they [agents] are in business for. If they have enough float or enough cash, they are able to serve customers. If you don’t have that [as an agent], you are losing income and you are also losing your reputation and the community trust.”
<blockquote>Liquidity management remains a notoriously difficult challenge in operating mobile money agent networks.</blockquote>
Leveraging data generated through agents’ interactions with PesaKit’s app and predictive analytics, its cash flow insights tool provides agents with the granular information agents need to effectively manage their liquidity, such as how much cash they need, how much float they need, how many customers they might serve, and how much they might earn in commissions.
The biggest challenge for PesaKit has been getting enough robust and consistent data to provide agents with accurate and relevant business insights. While M-Pesa’s continued domination of the Kenyan mobile money market impedes PesaKit’s ability to directly access some mobile money transaction data, PesaKit collects other data through agents’ interaction with its app that reveals key information about agents’ businesses (e.g., demand, business operations, footfall). This information helps agents access small loans that will then generate a credit history and afford them the opportunity to access larger value loans over time.
<h3><img class="alignright wp-image-41236 size-medium" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/komesha-corona-wait-here-feet-pesakit-sign-300x212.png" alt="corona social distancing kenya sign" width="300" height="212" srcset="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/komesha-corona-wait-here-feet-pesakit-sign-300x212.png 300w, https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/komesha-corona-wait-here-feet-pesakit-sign.png 585w" sizes="(max-width: 300px) 100vw, 300px" />Protecting Agents from the Pandemic’s Worst Economic Impacts</h3>
The pandemic reinforced the important role of PesaKit’s data-driven model, as COVID-19 presented significant challenges to business as usual. At the height of the pandemic, starting in March 2020, the Kenyan government imposed a strict 7 p.m. curfew, which curtailed agents’ hours of operation, restricted the movement of cash, and placed a heavier financial burden on agents overall. PesaKit agents faced increased costs to rebalance their cash flows, as customers were making more deposits than withdrawals, coupled with having to equip their locations with the personal protective equipment, hand sanitizers, cleaning products, and masks they needed to be able to serve their customers safely while observing social distancing guidelines.
To strengthen agents’ social safety net in this time of immense need, PesaKit introduced a 12-month hospital cash insurance cover to provide agents with greater financial security if they tested positive, were quarantined, or were hospitalized due to COVID-19. Again, PesaKit’s proximity to clients enabled them to move quickly and provide appropriate services to help their customers navigate these difficult times.

<h2>Leveraging Community Trust to Expand Access to Healthcare</h2>
reach52 seeks to shield low-income, underserved households in rural areas from the disruptive financial burden of out-of-pocket (OOP) health expenditures and protect their livelihoods by providing access to affordable and comprehensive health insurance and healthcare services.
<a href="https://www.cgap.org/blog/financial-services-health-treating-cause" target="_blank" rel="noopener">Research by CGAP</a> found that those living in low- and middle-income countries pay as much as 60 percent of their health expenditures out of pocket. An unexpected health crisis can force a family to make one of two nearly impossible choices: borrow from an informal moneylender at great expense or sell a household asset to make ends meet. If neither of these are options, families have to suffer poor, if not catastrophic, health outcomes by rationing necessary medical treatment or forgoing it entirely.
<img class="aligncenter size-large wp-image-41318" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/reach52-Overview-V3-763x1024.png" alt="" width="763" height="1024" srcset="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/reach52-Overview-V3-763x1024.png 763w, https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/reach52-Overview-V3-224x300.png 224w, https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/01/reach52-Overview-V3-768x1030.png 768w" sizes="(max-width: 763px) 100vw, 763px" />
Insurance products are meant to help households avoid facing any of those decisions, yet providers often find that<a href="https://www.centerforfinancialinclusion.org/inclusive-insurance-closing-the-protection-gap-for-emerging-customers-2" target="_blank" rel="noopener"> insurance is a difficult product to sell to low-income, underserved households</a>. Consumers with less experience or comfort with the formal financial system don’t always understand the basics of how insurance works, how it benefits them, what adverse events it protects or mitigates against, and how claims on their policies are paid. Rather than focusing on the intangible nature of insurance and the functional details of their plans and policies, reach52 taps into the emotional and practical benefits of insurance. “Nobody really wants to buy insurance,” notes Rich Bryson, Chief Strategy and Marketing Officer at reach52. “But everybody does want to protect their families and look after them. That is a universal trait and that is absolutely the case in the communities that we’re operating in.”
<blockquote class="pullquote--right">“Nobody really wants to buy insurance. But everybody does want to protect their families and look after them.”</blockquote>
reach52 builds on communities’ trust of local leaders, fellow residents, and community-based nongovernmental organizations that are already locally embedded to drive adoption of its insurance products and to scale its solutions more widely. “Trust is absolutely huge,” continues Bryson. “There can be distrust of external organizations in communities where information is less available and quite a lot of scamming goes on. Partnering with NGOs and individuals in the communities to run the services helps to overcome this. You can then build trust obviously as more people use the service and by sharing positive claims stories, showing how community members have benefited from insurance when they needed it most.”
reach52 recruits and equips Marketplace Area Managers (MAMs) from these aforementioned groups to lead its outreach and onboarding efforts, either in sites directly managed by reach52, or those run by reach52’s on-the-ground partners such as NGOs. MAMs serve as the bridge that connects low-income and rural clients with established insurance providers, using the reach52 marketplace mobile app to help clients find affordable health coverage, as well as prescription and over-the-counter medicines to meet their unique needs.
<h2>Expanding Service Offerings and Forging New Partnerships</h2>
reach52 drew from a wealth of guidance from its local teams and partners to understand how it could operate safely given travel restrictions and social distancing protocols. With its teams not able to travel, the fintech shifted to focus on its strategy, response, and the development of remote services that could help healthcare workers and the local community. For instance, they developed Facebook Messenger-enabled health chatbot services — used by more than 100,000 people — for sharing information on topics such as COVID-19 and its symptoms.
Specifically, reach52 has focused its recent efforts on combatting COVID-19, addressing barriers to healthcare access the pandemic has created for rural and low-income populations, and examining the adverse economic impacts it has had on livelihoods. In <a href="https://reach52.com/leading-the-fight-against-covid-19-in-partnership-with-johnson-johnson/" target="_blank" rel="noopener">partnership with Johnson &amp; Johnson</a>, reach52 has provided upskilling and remote learning opportunities for nearly 2,000 of its community health workers in the Philippines and Cambodia through its mediconnect platform. It has also expanded the range of healthcare products and services available through the reach52 marketplace, including reach52’s launch into <a href="https://reach52.com/reach52-launches-health-services-on-the-ground-in-india/" target="_blank" rel="noopener">India</a> and <a href="https://reach52.com/expansion-of-reach52s-insurance-services-into-cambodia/">Cambodia</a>.
<blockquote>reach52 has focused its recent efforts on combatting COVID-19, addressing barriers to healthcare access the pandemic has created for rural and low-income populations</blockquote>
More broadly, the increased focus on global health and health access issues has accelerated reach52’s partnerships with public and private sector health actors and other key stakeholders, including Pfizer, Biocon, Allianz, and UNICEF Innovation, among others. These new initiatives have ranged from exploring new models of care to address both communicable and chronic health conditions (e.g., dengue fever, diabetes, and hypertension) to new insurance plans and mobile wallet services for low-income communities.

<h2>Beyond COVID</h2>
reach52 and PesaKit credit their success to placing their end users at the center of everything they do. By focusing on developing solutions that address customer pain points and working to provide additional opportunities for agents to generate income, PesaKit stakes its success on the success of its agents, which it believes will build and maintain customer loyalty and is key to the sustainability of its business over time.
Emphasizing the importance of community and global health, Bryson of reach52 argues that “no one is protected until everyone is protected […] it is critical that we look at global health and by nature the global economy” as being interconnected in this way.
As the world continues to grapple with the health and economic fallout from the COVID-19 pandemic, the financial needs of customers will continue to evolve. Inclusive fintechs must remain agile and continue adapting to the ever-changing context and evolving needs of their customers. Doing so can help customers manage their immediate needs while also building their financial resilience to mitigate against future crises.

The severe economic impacts of COVID-19 on low-income households and small businesses have underscored the need for innovative solutions that can build greater financial resilience. Findings from <a href="https://centerforfinancialinclusion.org/covid-19-and-msmes-data-and-analysis-to-understand-impact/" target="_blank" rel="noopener noreferrer">surveys of MSMEs</a> conducted by the Center for Financial Inclusion (CFI) show that since COVID-19 struck, many small businesses in Indonesia, Colombia, and Nigeria have either had to close or found their profits significantly decreased. At the same time, the pandemic has provided opportunities for inclusive fintechs to <a href="https://centerforfinancialinclusion.org/rapid-innovation-how-fintechs-are-adapting-under-covid-19/" target="_blank" rel="noopener noreferrer">leverage their agility and adaptability</a> to strengthen and support the financial resilience of low-income, financially underserved customers.

Financial resilience is the ability to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates inclusive growth. Individuals must deftly navigate a delicate balancing act to stay afloat and may be thrown off course by a whole host of shocks, ranging from unexpected health crises to weather-related disasters that can disrupt otherwise appropriate financial plans. The nuances associated with financial resilience can complicate the financial service industry’s ability to develop and design comprehensive solutions for low-income customers.
<blockquote class="pullquote--right">PesaKit and reach52, two winners of the 2020 Inclusive Fintech 50, have responded to the extraordinary challenges posed by the COVID-19 pandemic by continuing to innovate to meet their customers’ needs.</blockquote>
PesaKit and reach52, two winners of the 2020 <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50</a> -- a competition founded by MetLife Foundation and Visa, with support from Accion and IFC, and additional funding from BlackRock and Jersey Overseas Aid &amp; Comic Relief -- have responded to the extraordinary challenges posed by the COVID-19 pandemic by continuing to innovate to meet their customers’ needs. In this paper, we share insights on how these two fintechs have adapted to a challenging economic landscape to serve as early examples of how fintechs have leveraged their agility and innovation during crisis. These findings build on the 2020 Inclusive Fintech 50 <a href="https://www.inclusivefintech50.com/white-paper-2020" target="_blank" rel="noopener noreferrer">white paper</a> that draws on the data submitted by the 2020 cohort of applicants and highlights how fintechs are continuing to advance financial inclusion and resilience for the estimated 3 billion financially underserved people worldwide.

Agility Breeds Resilience: A Tale of Two Fintechs Innovating in the Face of a Pandemic

Spotlight on 2020 Winners

Trust of Data Usage, Sources, and Decisioning: Perspectives From Rwandan Mobile Money Users

Blog Post

Discriminatory norms and practices are embedded in the financial system and, even when policies, regulations, and delivery channels are thought to be gender-neutral, it is difficult for women -- particularly low-income and marginalized populations -- to navigate available products and services. As a result, progress toward women’s economic empowerment has stagnated.

Financial inclusion must intentionally understand women’s needs and constraints. Designing financial products and services without a thorough <a href="https://www.centerforfinancialinclusion.org/normative-constraints-to-womens-financial-inclusion-what-we-know-and-what-we-need-to-know">examination of social norms</a> that impact women’s behaviors may in fact reinforce restrictive gender roles and permanently relegate women to the informal sector.

Although gender-aware financial products and services are increasingly available, they often stop at “workarounds” that, while meeting women’s immediate needs, still fail to provide holistic solutions to address and transform the norms that limit women’s broader economic livelihoods.
<h2>Gender Aware or Gender Siloed Services and Policies?</h2>
The microfinance sector – despite good intentions– often is designed to accommodate, rather than address, discriminatory norms.
<blockquote class="pullquote--left">The microfinance sector often is designed to accommodate, rather than address, discriminatory norms.</blockquote>
Women’s mobility is one discriminatory norm that the sector historically has accommodated and even perpetuated. Often, women face limited mobility due to unequal care responsibilities, such as caring for children or other family members, or the cultural expectation that she be accompanied by a male relative when leaving her home. Because of these expectations, it is difficult for women to engage in income-generating activities in public spaces, ultimately increasing the appeal for local microcredit or savings groups. Group lending was designed to account for women’s mobility and collateral constraints by building an accountability mechanism out of the <a href="https://www.sciencedirect.com/science/article/abs/pii/S0305750X04000750" target="_blank" rel="noopener noreferrer">social and community consequences of non-repayment</a>.

Furthermore, although many women have gained access to financial services through MFIs and savings groups, policies that restrict women’s ability to own property or accumulate assets <a href="https://wbl.worldbank.org/content/dam/sites/wbl/documents/2021/02/WBL2021_ENG_v2.pdf" target="_blank" rel="noopener noreferrer">remain intact</a> in many markets. MFIs and savings groups often operate in parallel to the formal economy with less or separate regulatory oversight and, as a result, women are not afforded the same legal protections.

Evaluations of the impact of microcredit have been mixed, many showing <a href="https://www.cgap.org/sites/default/files/publications/2019_07_FocusNote_Emerging_Evidence.pdf" target="_blank" rel="noopener noreferrer">inconclusive</a> impact on women’s economic empowerment <a href="https://econpapers.repec.org/article/eeewdevel/v_3a36_3ay_3a2008_3ai_3a12_3ap_3a2620-2642.htm" target="_blank" rel="noopener noreferrer">outcomes</a>. While many factors are at play, the lack of a norms-transformative approach undercuts empowerment gains. Creating parallel, informal systems for women’s financial activities can be an unintended consequence of gender-aware financial inclusion efforts that try to go around rather than address restrictive gender norms.
<h2>Cementing Digital Divides</h2>
Similarly, digital financial services (DFS) risk bypassing social norms and implementing workarounds in order to merely reach women, without focusing on the outcome of women’s economic empowerment in a digital era.

At first glance, DFS presents a remedy to women’s financial exclusion, making financial services <a href="https://www.icrw.org/wp-content/uploads/2017/11/Gender-and-digital-financial-inclusion.pdf" target="_blank" rel="noopener noreferrer">more accessible</a> by reducing the time and risk of traveling to a physical branch to make transfers or payments, and by enhancing the privacy of transactions. In Niger, women that received digital transfers <a href="https://sites.tufts.edu/jennyaker/files/2010/02/Zap_it_to_Me_26feb2012.pdf" target="_blank" rel="noopener noreferrer">increased their control over household resources</a> compared to those that received cash, since the digital transfer was less observable by their spouses and family members. And a recent study in Zambia revealed that women were willing to <a href="https://www.nottingham.ac.uk/cedex/news/papers/2020-06.aspx" target="_blank" rel="noopener noreferrer">give up household income to maintain privacy</a> over earnings from their husbands.

However, while these are promising mechanisms, there are several assumptions at play. One assumption is that women users wholly own and operate their phones. For digital transactions to enhance control through privacy, women must have access to their own phone or a phone that is not monitored or controlled by other family members. In developing economies, women are still eight percent less likely than men to own a phone (the gap is even larger for smartphone ownership) and <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2020/05/GSMA-The-Mobile-Gender-Gap-Report-2020.pdf" target="_blank" rel="noopener noreferrer">20 percent less likely to use mobile internet</a> than men. Sharing phones is also common for many low-income women, and gendered expectations can <a href="http://epod.cid.harvard.edu/sites/default/files/2018-10/A_Tough_Call.pdf" target="_blank" rel="noopener noreferrer">constrain the duration and purpose of women’s phone use</a>.

Additionally, enabling factors such as <a href="https://www.centerforfinancialinclusion.org/building-womens-financial-capability-a-path-toward-transformation">digital capability</a>, confidence in using digital financial services or platforms, and trust in technology also have significant gender gaps. Few providers are designing appropriate digital onramps that account for specific skill levels and the different needs of women.
<blockquote class="pullquote--right">Digital platforms must consider how gender norms are baked into the design of these systems.</blockquote>
Digital platforms – whether social, e-commerce, or gig work -- also must consider how gender norms can act as barriers to entry or are baked into the design of these systems. An examination of <a href="https://theswaddle.com/apps-like-uber-ola-make-driving-a-flexible-profession-why-cant-more-women-tap-into-it/" target="_blank" rel="noopener noreferrer">ride-hailing services in India</a> shows that women are unable to meet the incentives set by the platform and earn less for not being able to drive at peak times or complete longer journeys or airport pickups, often due to care responsibilities or safety concerns.

In examining the nuances of broader digital inclusion for women, we see yet again that social norms are at play. Lack of education or gender roles that limit women to caretakers rather than earners or entrepreneurs can limit women’s use of mobile internet even if they have access to a phone in their household. Neither DFS nor <a href="https://www.cgap.org/blog/forging-her-own-path-women-and-informal-online-commerce" target="_blank" rel="noopener noreferrer">platforms and social or e-commerce</a> can successfully include women without first addressing norms.
<h2>Opportunities to Shift Directions</h2>
The same challenges women face in accessing and using traditional financial services are equally present for digital financial inclusion. Rather than build a system that accommodates the barriers and constraints faced by women, we have an opportunity to make DFS catalyze women’s financial inclusion and economic empowerment.
<blockquote class="pullquote--left">We have an opportunity to make DFS catalyze women’s financial inclusion and economic empowerment.</blockquote>
Donors have the opportunity to invest in innovative research and test solutions that build women’s financial and digital capability or <a href="https://www.careevaluations.org/evaluation/digital-subwallets-and-household-dialogues/" target="_blank" rel="noopener noreferrer">build solutions specifically for women</a>. Governments can guide financial service providers and offer technical support and research capabilities to improve products and services for women. Market facilitators, including international non-governmental organizations like CARE and FSD Africa, can broker partnerships between community-based organizations and providers to create better informed and equitable systems and processes.

We can do more than create gender-aware financial products and services. By embedding women’s needs and understanding their constraints, particularly discriminatory gender norms, we can advance women’s inclusion by creating a financial system that works for them by design.

Workarounds Don’t Work: Gender-Aware Financial Services Must Help Address Discriminatory Norms

The Precarious State of MSMEs: Understanding the Impact of COVID-19  and Opportunities to Support their Recovery

News

Remittance fintechs are disrupting the world of global payments by reducing the cost of cross-border money transfers. This <a href="https://www.ft.com/">Financial Times</a> article highlights how digital transfer services are challenging the high costs of remittances and the impact that could have on global banking. CFI's managing director, Mayada El-Zoghbi, offers her insights on falling remittance prices, the impact of the pandemic on transferring money, and potential risks down the line.

El-Zoghbi believes that a target for the global average remittance charge of three percent or below by 2030 is "within reach." She also points out structural factors that have caused digital transfer payments to rise, including travelers being unable to transfer cash themselves during the lockdown. Finally, El-Zoghbi mentions the potential risks of monopolistic behavior from big payment businesses down the line.

Read the full article <a href="https://www.ft.com/content/1f11b38b-54d6-451c-ba4b-48843efa329d?shareType=nongift">here</a>.

Financial Times Quotes Mayada El-Zoghbi on Global Remittances

Join us in November for this community-driven convening to promote prosperity in an era of uncertainty. 

Event

As a global community, we have witnessed the power of financial inclusion in helping people cope with the devastating impact of the COVID-19 pandemic. Government-to-person payments were distributed at a level never before seen, using innovative approaches to identify recipients and disburse payments. With support from their investors, financial service providers worked closely with clients to restructure outstanding debt and provide information services on the health crisis. And fintech providers rapidly innovated to serve clients in the complex and evolving context of the pandemic.

Amid the crisis, we remain optimistic about the role financial services play in building financial resilience and helping people navigate difficult situations. Yet the crisis is far from over and threatens to reverse years of progress in reducing extreme poverty. We remain committed in our resolve to work toward a world in which all people are able to use financial services and access economic opportunities to improve their lives. And to do so requires partnership, learning from each other, dialogue, and community. This is the ambition of Financial Inclusion Week.

Ways to get involved:
<blockquote class="pullquote--right">The crisis is far from over and threatens to reverse years of progress in reducing extreme poverty.</blockquote>
<ul>
 	<li>Stay tuned for the Financial Inclusion Week agenda at <a href="http://financialinclusionweek.org/" target="_blank" rel="noopener noreferrer">financialinclusionweek.org</a></li>
 	<li>Share out on social media using #FinclusionWeek</li>
 	<li>Join the <a href="https://financialinclusionweek.us5.list-manage.com/subscribe?id=72f6a9abbe&amp;u=394352ae963270aef6c51680d" target="_blank" rel="noopener noreferrer">mailing list</a></li>
 	<li>Register for the event! Details to come in October.</li>
</ul>

Financial Inclusion Week 2021

COVID-19 has reinforced the importance of financial services in helping people navigate the effects of the pandemic and lay the foundations for recovery. The rapidly changing context presents a unique opportunity for fintechs and other digitally driven business models to step in and onboard new customers to meet this evolving demand.

The 2020 iteration of the Inclusive Fintech 50 competition maintained the core value proposition of the 2019 initiative — a transparent methodology, independent judging panels comprised of industry experts, and a strong focus on inclusion — while iterating to ensure relevance in a particularly challenging year. The 2020 competition attracted 403 qualified applicants operating in 111 countries and reaching 116 million customers.

Drawing on the data submitted by the 2020 cohort of applicants, this paper provides insights as to how early-stage fintechs are adapting to the current economic uncertainty and continuing to advance financial inclusion and resilience for the estimated 3 billion financially underserved people worldwide.

Follow CFI and #InclusiveFintech50 for updates on Inclusive Fintech 50. For more information about the competition, insights from previous cohorts, and more, visit <a href="http://www.inclusivefintech50.com">InclusiveFintech50.com</a>.

Inclusive Fintech 50 White Paper [2020]

Report

Fintech investment is booming. In 2018, a record USD 111.8 billion was invested in fintech, and the sector garnered extensive media coverage and interest. But despite fintech’s growing profile—and even though it can help unlock trillions of dollars in value by reaching financially underserved households and businesses—fintech solutions have yet to reach the majority of the financially excluded.
It is against this backdrop that we at MIX worked with MetLife Foundation, Visa Inc., Accion, and IFC to launch the Inclusive Fintech 50, the first global effort to spotlight early- stage fintechs driving financial inclusion. Four key findings emerged from our analysis of applicant data. We believe these findings can help funders, investors, and fintechs in their financial inclusion efforts. The Inclusive Fintech 50 applicant pool provides new insights into inclusion-focused fintech, itself a subset of the fintech universe. By highlighting these high-potential companies, we hope to support the efforts of investors, banking partners, and other fintechs working towards a financially inclusive world.

Inclusive Fintech 50 White Paper [2019]

Investment capital is flowing into fintech startups, yet it is still challenging to get capital to many fintechs addressing last-mile challenges. Evidence suggests this is driven in large part by a lack of information. Using data collected to test an initial set of Data Standards for Inclusive Fintech, this report presents insights into what we can learn about fintechs as businesses and how they address challenges of inclusion. This report was made possible by generous support from MetLife Foundation.

Results of the Fintech Benchmarks Proof-of-Concept

Data-Driven IF50 Insights

Recognizing Early-Stage Fintechs Driving Financial Inclusion

Alexandra (Alex) Rizzi

Tanwi Kumari

This research was a series of 32 qualitative semi-structured interviews to explore consumer perceptions, behavior, and knowledge about the data ecosystem driving digital financial services in Rwanda. The respondents were drawn from a subset of 1,200 participants in the 2018 Smart Campaign’s client voices survey. The interview guide was designed by the Center for Financial Inclusion (CFI) and carried out by <a href="https://www.laterite.com/" target="_blank" rel="noopener">Laterite</a>, a development-focused research firm based in Kigali. Laterite drew the sample from a group that was among the digital vanguard, as measured by their applying for a digital loan in 2018, with the assumption that they would be in the best position to understand the data ecosystem. The sample size was initially 32, but after data collection, two respondents were dropped, and analysis was conducted on 30 — evenly split into 15 male and 15 female respondents, with an average age of 39. Laterite conducted qualitative interviews in the first quarter of 2021 which, given the COVID-19 pandemic, were conducted over the phone in Kinyarwanda to minimize contact between participants and researchers. Interviews were captured on a tablet using Survey CTO’s computer-assisted telephone interview (CATI) software; after translation and data cleaning, CFI analyzed responses which included ex-post thematic analysis for some of the open-ended questions.
Caution is required in interpreting the results of the study, as they were not intended to generate widely generalizable results. Rather, they reflect the opinions and attitudes of a small group of urban digital consumers. Additionally, the interview guide was an initial foray into understanding consumer perceptions and attitudes around these complex topics, and thus some of the respondents may have misinterpreted a question’s intent.

Alex Kessler

What will it take for financial services to catalyze women’s economic empowerment? Making financial services and policy environments less inhibiting to discriminatory norms is a good place to start.

Shradha Modi

Katia Huayta Zapata

Lauren Braniff

Aeriel Emig

Mayada El-Zoghbi

CFI's Managing Director comments on remittances, mobile transfer services, and the impact of fintechs on global payments.

Inclusive Fintech 50

What is IF50?

IF50 leverages a competitive process to identify 50 early-stage fintechs driving financial inclusion and resilience.

Learn all about IF50