A global innovation competition that aims to identify and elevate cutting-edge emerging inclusive fintechs that have the potential to drive financial inclusion.

Over the last few years, the pandemic-induced transformation of the global economy has fueled a rapid expansion of the fintech sector. This evolution has revealed the potential of fintech to eliminate geographical and physical barriers and enable consumers and providers to gain unprecedented access to information, creating a more efficient, inclusive global financial system.

Nonetheless, the fintech expansion in low- and middle-income markets faces numerous challenges, and several unanswered questions linger. Will the fintech sector maintain its momentum? How will it evolve in a post-pandemic world? What unforeseen challenges await? These queries spotlight the intriguing unknowns within the sector.
<blockquote class="pullquote--right">While inclusive fintechs have expressed their commitment to continue serving low-income and vulnerable segments, their ability to sustain that commitment depends on funding. </blockquote>
Earlier this year, we interviewed 12 winners of the <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50</a> (IF50) competition and six fintech investors to assess their performance amidst numerous macroeconomic challenges like rising interest rates, decreased food supply, and large price gains. In June 2023, we published the findings of these conversations in a recent report, <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/06/IF50-2019-2022-Report.pdf">Inclusive Fintech Funding in Times of Uncertainty</a>, which underscored the commitment of inclusive fintechs to serve low-income individuals. To ensure success, these companies are bolstering their emphasis on core business principles, prioritizing customer needs, and actively working toward substantial revenues and profits.

While inclusive fintechs have expressed their commitment to continue serving low-income and vulnerable segments, their ability to sustain that commitment depends on funding. To better understand the fintech funding landscape, we analyzed funding data provided by <a href="http://www.briterbridges.com/" target="_blank" rel="noopener noreferrer">Briter Bridges</a> from different periods, regions, and market segments. Nearly 75 percent of the fintechs in this dataset have raised capital up to Series B deals. Our analysis focused on four regions: Latin America &amp; the Caribbean, the Middle East &amp; North Africa, Sub-Saharan Africa, and South Asia. From South Asia, Briter Bridges only collected data for India. From the Briter Bridges data, we examined funding deals from January 2015 to February 2023 and identified four key trends in fintech funding.  
<h1>1. Fintech funding is slowing down globally.</h1>
Since 2015, fintech funding has consistently trended upward – both in terms of the number of deals and total deal volume – with a minor slowdown in 2020 during the COVID-19 pandemic and a significant surge in 2021. Notably, the number of overall deals increased from 484 in 2020 to 851 in 2021, while the total deal volume rose by 96 percent – from USD $5.3 billion in 2020 to $10.4 billion in 2021.

Among the regions, South Asia (representing data only from India) experienced the highest increase in total deal volume since 2015, followed by Latin America &amp; the Caribbean, the Middle East &amp; North Africa, and Sub-Saharan Africa. The surge across all regions indicates a promising industry landscape and highlights investors’ interest in fintech across geographies.

[caption id="attachment_46199" align="aligncenter" width="1239"]<img class="wp-image-46199 " src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/07/Screenshot-2023-07-24-at-1.21.01-PM.png" alt="" width="1239" height="640" /> Source: Briter Bridges data for fintech deals from 2015 to 2022, excluding mega-deals over $100M.[/caption]

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However, in 2022, the growth in both deal volume and the number of deals was more modest, with a 10 percent increase in deal volume and a 2 percent increase in the number of deals. The number of deals declined or remained stagnant in India, the Middle East &amp; North Africa, and Latin America &amp; the Caribbean, while it increased in Sub-Saharan Africa.

Then, in January and February 2023, the sector witnessed a significant 54 percent decrease in overall deal volume compared to the same period in 2022. Of the four regions, the Middle East &amp; North Africa was the only region to see an increase in overall deal volume during this period, with all others declining.

By Q3 2022, industry stakeholders began experiencing a ‘<a href="https://bfsi.economictimes.indiatimes.com/news/fintech/how-cold-is-the-fintech-funding-winter-when-will-the-crisis-end/96054281#:~:text=1%29%20What%20is%20the%20FinTech%20funding%20winter%3F%20Funding,FinTech%20startups%20particularly%20are%20facing%20this%20funding%20winter." target="_blank" rel="noopener noreferrer">fintech funding winter,</a>’ a term that references the current state of declining funding opportunities and company valuations across the fintech sector. Since then, there has been a <a href="https://www.cbinsights.com/research/report/fintech-trends-q2-2023/" target="_blank" rel="noopener noreferrer">noticeable decrease in funding and deals</a> within the global fintech ecosystem during Q2 2023, reaching the lowest level since 2017. In Africa, there was a significant <a href="https://thebigdeal.substack.com/p/winter" target="_blank" rel="noopener noreferrer">37 percent year-on-year decline</a> in total transaction value for African start-ups between June 2022 and July 2023 compared to the same corresponding period in the prior year.
<h1>2. Funding remains geographically concentrated with a regional disparity in deal sizes.</h1>
We also observed significant variation in the median deal sizes across different regions. In 2022, the median deal size in Sub-Saharan Africa was $1 million, reflecting the prevalence of very early-stage fintechs. In contrast, the median deal size in 2022 was $6.5 million for fintechs in Latin America &amp; the Caribbean region and $6.4 million in South Asia. This difference illustrates how regions have distinct funding dynamics and growth trajectories.

Looking at trends over the past four years, we see that from 2020 to 2021, the median deal size remained unchanged in South Asia while increasing in the other three regions. From 2021 to 2022, the median deal size increased across all regions except the Middle East &amp; North Africa, which stayed constant.

[caption id="attachment_46200" align="aligncenter" width="1276"]<img class="wp-image-46200 " src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/07/Screenshot-2023-07-24-at-1.22.14-PM.png" alt="" width="1276" height="554" /> Source: Briter Bridges data for fintech deals from 2019 to 2022, excluding mega-deals over $100M.[/caption]

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In the dynamic world of fintech funding, four countries – India, Brazil, Israel, and Mexico – received 80 percent of the overall funding in recent years. India leads with a total funding volume of $22 billion between 2015 and 2023, showcasing its thriving fintech ecosystem and investors’ support. Brazil and Israel both secured $4.5 billion in total funding volume, with Mexico attracting $3.7 billion. Funding to Brazil, Israel, and Mexico captured a considerable share of their region’s funding (40 percent, 65 percent, and 32, respectively).

Examining the period from 2020 to 2022, we see that the total deal volume increased in all four countries in 2021. However, in 2022, the total deal volume increased in India and Mexico but declined in Brazil and Israel.
<blockquote>Limited access to formal financial services, combined with rapid digitization in recent years and favorable regulatory frameworks, all contribute to these four countries attracting the majority of regional fintech funding.</blockquote>
Two factors have driven access to funding in these countries. First, consumer demand and unmet needs revealed significant market potential. Second, a conducive enabling environment in the form of regulations and policies encouraged innovation by financial service providers and adoption by consumers. Limited access to formal financial services, particularly credit for low-income individuals and MSMEs, combined with rapid digitization in recent years and favorable regulatory frameworks, all contribute to these four countries attracting the majority of regional fintech funding. For example, in India, <a href="https://www.bain.com/insights/india-fintech-report-2022-sailing-through-turbulent-tides/" target="_blank" rel="noopener noreferrer">initiatives</a> like the Jan Dhan-Aadhaar-Mobile (JAM) trinity, the Unified Payments Interface (UPI), and updated regulations and policies accelerated digital adoption during the pandemic. Rapid digitization has benefited emerging fintech players, boosting digital financial solutions and driving financial inclusion.

[caption id="attachment_46196" align="aligncenter" width="1101"]<img class="wp-image-46196 " src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/07/Screenshot-2023-07-24-at-1.12.02-PM.png" alt="" width="1101" height="505" /> Source: Briter Bridges data for fintech deals from 2020 to 2022, excluding mega-deals over $100M.[/caption]

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While no African countries made it to the list of the top four countries with the largest funding in recent years, Nigeria stood out with the highest deal volume among African countries. It received a modest accounting for 40 percent of the region’s overall funding.
<h1>3. Regional variations in the demand for financial products influence funding distribution.</h1>
The distribution of funding by fintech product categories has shifted over time. Historically, credit products received the bulk of the funding within the fintech sector. Insurance, which typically receives lower levels of funding, surged in 2020 as the pandemic <a href="https://www.bcg.com/industries/insurance/the-strategic-role-of-insurtechs-post-covid-19" target="_blank" rel="noopener noreferrer">accelerated the demand for digital transformation</a>. Insurance fintechs that were able to innovatively leverage digital and analytics became more attractive to investors. Additionally, we observed an increase in the share between 2018 and 2021, although this category declined in 2022. There is also an upward trend in the popularity of personal financial management products (PFM), as <a href="https://www.businessinsider.com/personal-finance-management-market" target="_blank" rel="noopener noreferrer">more fintechs and digital banks begin offering PFM products or PFM features</a>.

[caption id="attachment_46201" align="aligncenter" width="1197"]<img class="wp-image-46201 " src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/07/Screenshot-2023-07-24-at-1.23.55-PM.png" alt="" width="1197" height="661" /> Source: Briter Bridges data for fintech deals from 2015 to 2022, excluding mega-deals over $100M.[/caption]

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Looking at the breakdown of regional fintech funding by product category, we see the importance of catering to the unique financial demands of specific markets. For example, funding for credit fintechs dominates overall fintech funding in South Asia and Latin America &amp; the Caribbean, while the Middle East &amp; North Africa focuses on DFS infrastructure and PFM, and Sub-Saharan Africa prioritizes payments and remittances. Despite the ways in which insurance can enhance the resilience of low-income households, insurance products continue to receive minimal investor attention across all regions. Insurance products are typically offered as part of a product bundle and continue to be <a href="https://static1.squarespace.com/static/5bede261f2e6b1e5ead0a0ba/t/6399ed1a42246a3d457d56cd/1671032094317/IF50+2022+Insights+Deck.pdf" target="_blank" rel="noopener noreferrer">difficult to market and sell</a>.
<h1>4. The funding gap for small deals could contribute to the ‘death valley curve’.</h1>
Looking at the past deals of the top 20 investors, we see a discrepancy among different types of funders’ investment strategies and risk appetites. Accelerators and incubators have a higher number of deals, but their median deal size remains relatively modest – often below $500,000. On the other hand, private equity, venture capital, and impact investing funds have median deal sizes ranging from $7 to $20 million, reflecting their substantial investment capacity.

We also see a dip in the number of deals targeted for early-stage fintechs – in the amount of $501,000 – $1 million – by any investor type. In 2020, despite an overall increase of more than 70 percent in the number of total deals that year, the proportion of deals within the $501,000 – $1 million range was only 8 percent. The proportion of deals conducted for this size bracket has remained consistently between 7 to 9 percent over the past 4 years, likely contributing to the ‘<a href="https://hbr.org/2022/04/an-entrepreneurs-guide-to-surviving-the-death-valley-curve" target="_blank" rel="noopener noreferrer">death valley curve’</a> experienced by start-ups.

[caption id="attachment_46198" align="aligncenter" width="702"]<img class=" wp-image-46198" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/07/IF50-blog-post-graph5.png" alt="" width="702" height="440" /> Source: Briter Bridges data for fintech deals from 2015 to 2022, excluding mega-deals over $100M.[/caption]
<h1>Winter is Here</h1>
While global trends indicate that we are living in a fintech funding winter, not all hope is lost. The fintech sector continues to be an area of significant opportunity and innovation, attracting attention from investors globally. Recent funding trends highlight the dynamic nature of fintech investments, as fluctuations in deal volume, regional preferences, and investor interests impact the funding fintechs receive. In addition, because fintech funding responds to specific characteristics of national economies and factors that create an enabling environment – such as the speed of digitalization, level of innovation, regulatory frameworks, and funding gaps for low-income populations – it is useful to observe trends in the fintech industry to understand the market demand and needs for various financial solutions in different markets.

Fintech investors and other stakeholders should adopt a balanced perspective, draw upon the lessons learned from past successes and failures, and continue supporting inclusive fintechs that offer products to low-income households. By doing so, they can effectively guide inclusive fintechs toward sustained growth and impactful outcomes.

Exploring Fintech Funding Dynamics in Recent Years

Slowing economic growth, rising inflation, and climbing interest rates are straining the business models for inclusive fintechs, creating significant uncertainty and new funding challenges. For the past four years, the <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50</a> (IF50) global innovation competition identified and elevated cutting-edge, emerging inclusive fintechs driving financial inclusion. These high-potential start-up fintechs address limitations in financial services delivery for unserved or underserved customers by offering a solution among credit, insurance, payments &amp; remittances, savings &amp; personal financial management, or infrastructure.
To better understand the outlook for the sector amidst these market changes, CFI interviewed past IF50 winners and fintech investors to learn how they are adapting to these uncertain times and the impact of the funding challenges on their business models and the low-income customers they serve.
CFI’s latest report has found:

<ul data-rte-list="default">
 	<li>
The total value of deals for early- and growth-stage inclusive fintechs plunged 75 percent in January and February this year from the same time a year ago.
</li>
 	<li>
The median deal size for growth-stage fintechs appears to drop from $20 million in Q1 2022 to $4.5 million in the first two months of 2023.
</li>
 	<li>
Despite the funding pullback, inclusive fintechs say they remain committed to serving low-income and vulnerable communities.
</li>
 	<li>
Investors expect more failures in the short term, but they are cautiously optimistic that the market shakeout will create a healthier sector in the medium term.
</li>
 	<li>
Business fundamentals is the name of the game today for both fintechs and investors. Business fundamentals is the name of the game today for both fintechs and investors. They are focusing on keeping operational costs low, responding to customer needs, and creating a path to sustainability and profitability.
</li>
</ul>

Inclusive Fintech Funding in Times of Uncertainty: Lessons Learned and Challenges Ahead

This report and infographic examine data from the 250+ eligible fintech applicants from the fourth Inclusive Fintech 50 competition to better understand the state of early-stage fintechs. CFI analyzes all applications to identify trends and to find innovations with disruptive potential. The massive scale that is only possible with digitalization matters greatly to the financial inclusion agenda, and this year’s IF50 applicants are already collectively reaching 54 million people, many of whom were previously underserved, across 101 countries of operation. The fintechs are young and small now, but as we’ve seen in past years, they grow to reach millions more people and raise millions more in investment. However, despite this tremendous outreach and potential, there are also areas that require attention: funding and gender gaps, inconsistent practices around data privacy and consent, and limited data collection for outcomes management.

Insights from the 2022 Inclusive Fintech 50 Applicant Pool

If you have questions about your application, the process, key dates, or the competition in general, please watch this information session on application requirements and selection criteria. Hear from a 2021 IF50 winner, who will speak about the process and discuss how the competition has benefitted them. Visit <a href="http://inclusivefintech50.com" target="_blank" rel="noopener noreferrer">inclusivefintech50.com</a> to learn more.

Inclusive Fintech 50 Application Info Session

There has been a lot of talk in recent years about the promise of fintech to help advance financial inclusion. This has been especially true during the pandemic: acceleration in digital adoption, spurring further growth in the inclusive fintech sector. Much of this growth has taken place in Africa, where fintechs raised <a class="Hyperlink SCXW16100441 BCX0" href="https://thebigdeal.substack.com/" target="_blank" rel="noreferrer noopener">$2.3 billion dollars in 2021, up from $830 million in 2020</a>, helping to catch up with funding levels in South Asia and Latin America.
<blockquote class="pullquote--right">While inclusive fintechs are developing innovative ways to reach new customers, meaningful customer segments remain underserved.</blockquote>
With this growth, there also is more data and insights about fintechs and their customers. Last year, two reports, CFI’s <a class="Hyperlink SCXW14958972 BCX0" href="https://www.centerforfinancialinclusion.org/insights-from-the-2021-if50-applicant-pool" rel="noreferrer noopener">Inclusive Fintech 50: Driving Innovation in an Era of Uncertainty</a> and Catalyst Fund’s <a class="Hyperlink SCXW14958972 BCX0" href="https://bfaglobal.com/catalyst-fund/briter-catalyst-fund-state-of-the-fintech-industry-report/" target="_blank" rel="noreferrer noopener">State of Fintech in Emerging Markets </a>(in collaboration with <a class="Hyperlink SCXW14958972 BCX0" href="https://briterbridges.com/" target="_blank" rel="noreferrer noopener">Briter Bridges</a>), leveraged such data to take stock of the industry’s progress. The reports arrived at similar conclusions: while inclusive fintechs are continuing to develop innovative ways to reach new customers, meaningful customer segments remain underserved and fintech funding remains concentrated.

The truth is that we are still in the early stages of bringing the power of fintech to bear on the challenges that low-income and vulnerable populations face. Advances have certainly been made, but the greatest gains only can be realized through intentional and collective efforts on the fintech frontier. This will help pave the way for strategies to turn these underserved markets into opportunities for growth.
<h1>Outreach to Underserved People</h1>
On the bright side, early-stage fintechs continue to proliferate. Last year, nearly 300 such fintechs applied to <a href="http://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50 (IF50)</a>, an annual competition to showcase early-stage fintechs driving financial inclusion around the world. Expert judges selected 50 winners from this applicant pool based on established criteria of inclusivity, innovation, scale potential, and traction. 

IF50 applicants have shown a continuous drive to innovate, demonstrated by their broad range of product areas, with varied models, partnerships, and customer acquisition strategies. The fintechs also are finding diverse ways to reach underserved people, such as through the provision of in-person digital skills training, use of agents, and product offerings that can be accessed without a smartphone.

Applicants are also designing solutions to address challenges in areas that are fundamental to people’s livelihoods – including climate resilience, health, and support for micro and small enterprises. For example, IF50 2021 winner <a href="https://gotugende.com/" target="_blank" rel="noopener noreferrer">Tugende</a> uses asset finance, technology, and a customer-centric model to help informal sector entrepreneurs in Africa grow their businesses and access value-added services such as medical insurance. Eighty percent of IF50 2021 applicants reported that their solutions helped customers access essential services during the pandemic, such as healthcare, government relief, and clean energy.

&nbsp;

<img class="size-full wp-image-44679 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/06/Tugende-Snapshot-03-e1655994301976.png" alt="" width="1000" height="599" />

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<h1>Gaps in Inclusivity</h1>
Despite this progress, significant gaps in customer outreach remain. For example, only 23 percent of fintechs in the Catalyst Fund sample reported that women constituted more than 50 percent of their customer base. Moreover, 38 percent of the IF50 2021 applicants do not disaggregate client data by gender.

Catalyst Fund and IF50 both also found that most inclusive fintechs do not focus mainly on low-income people. In the IF50 sample, 41 percent of applicants reported primarily targeting low-income customers. More than 70 percent of startups in the Catalyst Fund sample reported that fewer than 25 percent of their customers live under the poverty line, although poverty rates in the countries where these startups operate are closer to 35-45 percent.

The Catalyst Fund data also showed that as startups grow, they tend to move upmarket. Particularly for early-stage startups looking to raise capital, showing strong acquisition numbers is imperative, and middle- and higher-income customers tend to be <a href="https://medium.com/caribou-digital/what-are-the-limits-of-the-private-sector-in-serving-the-poor-3ee9a9a468fc" target="_blank" rel="noopener noreferrer">easier and cheaper</a> to acquire.
<h1>Concentration in Funding and Geographies</h1>
The pressure to acquire more customers may be driven by the underlying scarcity of funding for early-stage fintechs. Although investment flows have grown dramatically in recent years, funding in emerging markets is concentrated among very few startups. Out of 101 Sub-Saharan African startups in the IF50 2021 sample, five accounted for 65 percent of the funding. In Latin America, five of 36 applicants received 83 percent of funding.

Not only is funding concentrated among a few startups, but those startups are also based in a select few countries. Sixty-four percent of total funding reported by IF50 2021 applicants went to fintechs based in five countries: Colombia, India, Mexico, Singapore, and the United States. In Latin America, four countries (Brazil, Mexico, Uruguay, and Colombia) accounted for over 99 percent of funding in the Catalyst Fund sample. Such geographic concentration particularly excludes countries with lower levels of financial inclusion. Of the 16 countries in the IF50 sample that received over $10 million, only three have financial inclusion levels below 40 percent. Similarly, <a href="https://qz.com/africa/2029505/everything-you-need-to-know-about-fintech-financing-in-africa/?utm_source=email&amp;utm_medium=africa-launch-list&amp;utm_content=017e81c9-90b4-11ec-8d42-724a485ab421" target="_blank" rel="noopener noreferrer">fintech funding in Africa is concentrated in Kenya, Nigeria, and South Africa</a> (87.9 percent), all countries with higher levels of financial inclusion and/or more developed fintech ecosystems.
<blockquote>Not only is funding concentrated among a few startups, but those startups are also based in a select few countries.</blockquote>
Deals are also concentrated in certain types of products: those in payments, digital credit, and neo banks, and those that require a smartphone. In contrast, savings and insurance fintechs receive less funding, as do models that leverage USSD or lower-tech accessibility. IF50 data found that funding to fintechs offering services that require smartphones was about 3.5 times greater than those needing only a basic or feature phone. This may be because lower-tech models cost more to operate and users cannot bear higher-margin pricing.

Investment flows continue to favor men, and along all stages of growth, men founders raise more than women founders. According to 2021 IF50 data, women founders, on average, raised one-third the amount raised by men founders.

&nbsp;

<img class="wp-image-44683 size-full aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/06/IF50-blog-post-stacked-graph-1-e1656002022248.png" alt="" width="1000" height="652" />

&nbsp;

Overall, the data demonstrates that the majority of inclusive fintech startups, particularly those servicing more excluded segments, continue to find it difficult to access investment capital.  Being able to prove the business case of untapped markets is difficult, but Okapi Finance, an IF50 2021 winner, aims to demonstrate the potential by focusing on women merchants in Africa’s informal sector.

&nbsp;

<img class="aligncenter wp-image-44681" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/06/Okapi-snapshot-01.png" alt="" width="1000" height="599" />

&nbsp;
<h1>Looking Ahead</h1>
While there are opportunities for early-stage fintechs to build commercially viable businesses that are truly inclusive, more effort is needed from the broader ecosystem to ensure that innovative solutions can take hold. Startups are continuing to emerge on the frontier, but they need access to the visibility, resources, expertise, and networks that support their growth into sustainable and impactful companies.

Supporters of digital financial inclusion can help by directing greater attention to innovative startups in overlooked markets. Competitions like IF50 and those organized by <a href="https://www.womensworldbanking.org/fintech-innovation-challenge-2021/" target="_blank" rel="noopener noreferrer">Women’s World Banking</a> and the <a href="https://www.afi-global.org/newsroom/news/applications-open-for-the-2022-afi-inclusive-fintech-showcase/" target="_blank" rel="noopener noreferrer">Alliance for Financial Inclusion</a>, and market insights provided by research organizations like Briter Bridges, also help to raise awareness. Incubators and accelerators, such as <a href="https://bfaglobal.com/catalyst-fund/" target="_blank" rel="noopener noreferrer">Catalyst Fund</a>, can assist in de-risking less proven models and making them more market-ready via grant funding, mentorship, and other venture-building services. And finally, greater investment, particularly in the $250K to $1M range, can help to fuel early-stage ventures pioneering innovative solutions.

The application period for the 2022 <a class="Hyperlink SCXW136892565 BCX0" href="https://www.inclusivefintech50.com/" target="_blank" rel="noreferrer noopener">Inclusive Fintech 50</a> competition will open Monday, June 27, and inclusive fintech startups – especially those at the frontier – are strongly encouraged to apply. The 2022 theme is “Making Digitalization Count.” IF50 is sponsored by Visa, MetLife Foundation, and Jersey Overseas Aid &amp; Comic Relief.

Driving Inclusivity on the Fintech Frontier: Let’s Make It Count

The <a href="https://www.inclusivefintech50.com" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50</a> application data from the third year signals continued progress on innovations to onboard low-income customers, despite the challenges posed by the pandemic:
<ul>
 	<li>Inclusive fintechs are using creative approaches to serve new customers. From retail partnerships that help drive customer acquisition, to insurance platforms offering micro-coverage, to native language chatbots, to enhanced biometric identity verification solutions, early-stage inclusive fintechs are pursuing outside-the-box solutions to reach un/underbanked people around the world.</li>
</ul>
Nevertheless, there are two areas of concern:
<ul>
 	<li>Funding concentration persists. While fintech investments across emerging markets have been increasing, early-stage inclusive fintechs continue to face disparities based on geography, funding status, and gender.</li>
 	<li>Potential customer risks persist around data usage. Although data is central to the business models of inclusive fintechs, some applicants require customer consent related to data, and some still do not.</li>
</ul>

Insights from the 2021 Inclusive Fintech 50 Applicant Pool

WASHINGTON, D.C., USA, June 28, 2021 - The Center for Financial Inclusion (CFI) has launched the third year of Inclusive Fintech 50 (IF50), a competition to recognize the most promising inclusive fintech startups pushing the frontiers of innovation. This year, the competition seeks to recognize early-stage fintechs that are helping low-income customers and micro- and small enterprises not just respond to the pandemic, but rebound, rebuild, and recover after the past year’s devastation.

IF50 is sponsored by Visa, MetLife Foundation, and Jersey Overseas Aid &amp; Comic Relief, with support from Accion and IFC. In its first two years, IF50 attracted applications from over 700 startups across 162 countries, cumulatively reaching almost 175 million customers. Each year, an independent judging panel of global fintech experts reviews the applicants to select 50 winners based on four criteria: inclusivity, innovation, scale potential, and traction.

Participation in the competition provides startups with visibility and credibility among investors as well as media and partnership exposure; 19 winners from the 2019 cohort have since raised a collective $182.5 million in investment. In addition, this year’s winners will be featured in early November during Financial Inclusion Week, an annual virtual event organized by CFI for the inclusive finance community to discuss the latest developments and key issues facing the sector. Winners will also be featured in this year’s research findings and media coverage. For example, <a href="https://www.inclusivefintech50.com/briefs" target="_blank" rel="noopener noreferrer">several publications from the past two years</a> prominently featured IF50 winners.

For the 2021 competition, new benefits to IF50 winners include access to <a href="https://www.practicalbusinessskills.com/" target="_blank" rel="noopener noreferrer">Practical Business Skills</a>, a global digital platform created by Visa to deliver free educational resources to help small and micro business owners make confident, informed decisions to grow their businesses. Winners will be able to customize and co-brand this turn-key solution to support the local recovery efforts of the small and micro businesses they serve. Eligible winners will automatically pre-qualify for <a href="https://partner.visa.com/site/programs/fintech-program.html" target="_blank" rel="noopener noreferrer">Visa Fintech Fast Track</a>, a program that aims to speed up the process of integrating with Visa and its ecosystem partners and helps fintechs enhance and introduce new and innovative payment experiences. These tools, together with the networking and platform that IF50 provides, serve as an invaluable platform for startups at the earliest stages of their journey.

As the COVID pandemic continues to rage in many parts of the world, fintech startups and services have proven to be an invaluable lifeline for vulnerable people, facilitating remittances, digital payments, and payments associated with government safety nets. Higher rates of fintech acceptance present new opportunities for startups to go beyond traditional offerings to deliver valuable financial services that will ensure the financial health and resilience of underserved people.

Expert judges include a diverse group of independent fintech experts, investors, and founders, including:
<ul>
 	<li>Nejoud Al Mulaik, Director, Fintech Saudi</li>
 	<li>Tarek Assad, Managing Partner, Algebra Ventures</li>
 	<li>Sarah Austrin-Willis, Senior Director, Financial Solutions Lab, Financial Health Network</li>
 	<li>Ginger Baker, Head of Financial Access, Plaid</li>
 	<li>Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments</li>
 	<li>Bernhard Eikenberg, Managing Partner, Emerging Markets, Community Investment Management</li>
 	<li>Brad Jones, CEO, Wave Money</li>
 	<li>Buhle Goslar, Africa CEO, Jumo</li>
 	<li>Jojo Malolos, CEO, JG Digital Equity Ventures and Data Analytics Ventures</li>
 	<li>Kunal Upadhyay, Advisor, ADB Ventures</li>
 	<li>Shwetank Verma, Co-Founder and General Partner, Leo Capital</li>
 	<li>Gabriela Zapata Alvarez, Independent Consultant (Financial Inclusion)</li>
</ul>
The application window opens today, and interested startups are encouraged to apply by July 23 via the <a href="https://www.inclusivefintech50.com/apply">IF50 website</a>.

# # #

Key quotes:
<ul>
 	<li>Managing Director of CFI, <a href="https://centerforfinancialinclusion.org/people/mayada-el-zoghbi/" target="_blank" rel="noopener noreferrer">Mayada El-Zoghbi</a>, highlighted the timeliness of the theme noting, “As the world continues to wrestle with the challenges presented by the pandemic, fintechs can play an important role in helping those most impacted move towards recovery. For example, by supporting micro- and small enterprises, which have been devastated by the pandemic but will be ground zero for eventual economic recoveries across the developing world. As difficult as this crisis has been, it has prompted a surge in fintech innovation and an openness to new ideas, the benefits of which could be applied to other challenges beyond the pandemic. We need to be intentional about how we can use this as a springboard for making advances elsewhere, such as with women’s financial inclusion, the responsible use of data, and in navigating the impacts of climate change.”</li>
 	<li>Beth Hurvitz, Global Head of Social Impact, Visa Inc. noted, “Digital payments are an onramp for financial inclusion, helping people and businesses meet their needs and stay afloat in the current context. Fintechs are key to enhancing access and the benefits of digital adoption for the underserved. Visa is committed to work with the payments ecosystem on initiatives such as Inclusive Fintech 50, to support SMB owners to become digitally enabled and rebuild stronger, more competitive and resilient businesses for the recovery of our communities.”</li>
 	<li>Krishna Thacker, Director, MetLife Foundation, noted, “At MetLife Foundation, we recognize the ability of tech to reach low-income people further and faster, but we’re also focused on engaging the customer and changing their financial outcomes. Through Inclusive Fintech 50, we want to identify, recognize and support organizations that are going beyond inclusion to build resilience and financial health for low-income customers – a need highlighted by the pandemic.”</li>
</ul>
# # #
<h3>About IF50</h3>
Inclusive Fintech 50 identifies promising early-stage fintechs driving financial inclusion around the globe through a competitive process led by an independent panel of judges from venture capital, technology, and financial services. Applicants are assessed on the degree to which their target market includes underserved people or businesses, and whether their innovation offers a new value proposition, shows early-stage traction, and can have a noticeable impact on the more than 3 billion financially underserved people globally. Inclusive Fintech 50 is sponsored by Visa, MetLife Foundation, and Jersey Overseas Aid &amp; Comic Relief, with support from Accion and IFC. The initiative is managed by the Center for Financial Inclusion (CFI). Learn more at <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">www.inclusivefintech50.com</a>.
<h3>About The Center for Financial Inclusion</h3>
The Center for Financial Inclusion (CFI) works to advance inclusive financial services for the billions of people who currently lack the financial tools needed to improve their lives and prosper. We leverage partnerships to conduct rigorous research and test promising solutions, and then advocate for evidence-based change. CFI was founded by Accion in 2008 to serve as an independent think tank on inclusive finance.
<h3>About Visa</h3>
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network – enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information visit About Visa and @VisaNews.
<h3>About MetLife Foundation</h3>
At MetLife Foundation, we are committed to expanding opportunities for low- and moderate-income people around the world. We partner with nonprofit organizations and social enterprises to create financial health solutions and build stronger communities, while engaging MetLife employee volunteers to help drive impact. MetLife Foundation was established in 1976 to continue MetLife’s long tradition of corporate contributions and community involvement. From its founding through the end of 2019, MetLife Foundation provided more than $900 million in grants and $87 million in program-related investments to make a positive impact in the communities where MetLife operates. Our financial health work has reached more than 17.3 million low- and moderate-income individuals in 42 countries. To learn more about MetLife Foundation, visit metlife.org.
<h3>About Jersey Overseas Aid &amp; Comic Relief</h3>
In 2018, Comic Relief and Jersey Overseas Aid announced a four-year £8 million partnership called ‘Branching Out: Financial Inclusion at the Margins’ to improve access to affordable financial services for those at the margins of society in Sierra Leone, Rwanda, and Zambia. Comic Relief and Jersey Overseas Aid believe that one of the best ways to do this is by transferring knowledge to build responsible and inclusive financial systems, incubating FinTech, and focusing on service delivery to increase bottom-of-the-pyramid access to financial services including bank accounts, savings, insurance and credit, providing low-income households with the means to plan for the future as well as unexpected events. The partnership grants support a diverse set of organizations, made up of international and local NGOs, with each grantee delivering programs designed to meet different community and national needs in addressing financial inclusion.
<h3>About Accion</h3>
Accion is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. We catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of — or poorly served by — the financial sector. For 60 years, Accion has helped tens of millions of people through our work with more than 160 partners in 55 countries. More at http://www.accion.org.
<h3>About IFC</h3>
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

Media contacts: Lauren Braniff, Vice President, Strategy and Communications
Center for Financial Inclusion: lbraniff@accion.org

Inclusive Fintech 50 Launches 2021 Competition to Recognize Early-Stage Fintechs Driving Innovation in an Era of Uncertainty

Last year, the 2020 <a href="https://www.inclusivefintech50.com/white-paper-2020" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50 competition</a> recognized 50 fintech startups that were adapting to the COVID pandemic in remarkable ways, continuing to deliver valuable services to excluded communities in a time of acute need.

This year, the 2021 IF50 competition seeks to recognize early-stage, inclusive fintech startups that are continuing to push the frontier of financial inclusion, driving innovation in an era of uncertainty. The competition seeks to spotlight startup teams that are helping low-income customers and micro and small enterprises not just respond to the emergency, but rebound, rebuild, and recover after the past year’s devastation. Managing Director of CFI, <a href="https://www.centerforfinancialinclusion.org/bio/mayada-el-zoghbi" target="_blank" rel="noopener noreferrer">Mayada El-Zoghbi</a>, highlighted the timeliness of the theme noting, “As the world continues to wrestle with the challenges presented by the pandemic, fintechs can play an important role in helping those most impacted move towards recovery. For example, by supporting micro and small enterprises, which have been devastated by the pandemic but will be ground zero for eventual economic recoveries across the developing world.”

As the COVID pandemic continues to rage in many parts of the world, fintech startups and services have proven to be an invaluable lifeline for vulnerable people, enabling <a href="https://www.worldbank.org/en/news/press-release/2021/05/12/defying-predictions-remittance-flows-remain-strong-during-covid-19-crisis" target="_blank" rel="noopener noreferrer">remittances</a>, <a href="https://www.womensworldbanking.org/insights-and-impact/focus-on-colombia-g2p-payments-in-response-to-covid-19/" target="_blank" rel="noopener noreferrer">G2P payments</a>, and <a href="https://m-kopa.com/covid-19-response/" target="_blank" rel="noopener noreferrer">emergency hospicash</a>. Their value has not been limited to emerging markets, <a href="https://www.thebusinessresearchcompany.com/press-release/digital-payments-market-size" target="_blank" rel="noopener noreferrer">digital payments have almost doubled in volume</a> globally, and the <a href="https://www.adjust.com/blog/fintech-and-mobile-finance-usage-surges-in-2020/" target="_blank" rel="noopener noreferrer">use of fintech apps has soared</a> in developed markets. In both developed and emerging markets, we have seen remarkable growth in mobile money <a href="https://qz.com/africa/2010332/mobile-money-helps-airtel-africa-safaricom-mtn-after-covid-19/?utm_source=email&amp;utm_medium=africa-weekly-brief&amp;utm_content=81c2dab1-b98a-11eb-b2fa-128a8124fc78" target="_blank" rel="noopener noreferrer">uptake</a>, the <a href="https://www.worldbank.org/en/news/press-release/2020/12/03/fintech-market-reports-rapid-growth-during-covid-19-pandemic" target="_blank" rel="noopener noreferrer">volume</a> of fintech transactions, and even <a href="https://finance.yahoo.com/news/vc-investment-fintech-more-doubles-050100463.html" target="_blank" rel="noopener noreferrer">investment</a> in fintech.

These higher rates of fintech acceptance present new opportunities for startups to deliver effective financial services to underserved people. As <a href="https://centerforfinancialinclusion.org/people/mark-pickens/" target="_blank" rel="noopener noreferrer">Mark Pickens</a>, Senior Director of Social Impact, Visa Inc., a founding sponsor of the competition, noted, “Digital payments are an onramp for financial inclusion, helping people and businesses meet their needs and stay afloat in the current context.”
<blockquote class="pullquote--left">Digital payments are an onramp for financial inclusion, helping people and businesses meet their needs and stay afloat.</blockquote>
Not only are more people using fintech solutions more frequently and for more use cases, but their financial needs and habits are also already changing in lasting ways. <a href="https://qz.com/india/2006292/the-pandemic-has-made-savings-a-priority-for-indian%5B%E2%80%A6%5Ddium=daily-brief&amp;utm_content=99a00a1f-b22e-11eb-8e49-fe521f7ceeec" target="_blank" rel="noopener noreferrer">Savings rates have increased in India</a>, even as unemployment has increased and salaries have decreased. Demand for insurance has also increased, in developed markets like the <a href="https://www.actuarialpost.co.uk/article/increased-demand-for-private-medical-insurance-after-covid19-18468.htm" target="_blank" rel="noopener noreferrer">UK</a>, but also in emerging markets like <a href="https://www.business-standard.com/article/finance/high-demand-for-comprehensive-health-policies-as-covid-cases-soar-again-121042200061_1.html" target="_blank" rel="noopener noreferrer">India</a> and across the continent of <a href="https://www.brookings.edu/blog/africa-in-focus/2021/03/03/figures-of-the-week-african-insurance-market-poised-for-growth/" target="_blank" rel="noopener noreferrer">Africa</a>.

These changes mean that fintech startups have the opportunity to go beyond short-term fixes, like <a href="https://centerforfinancialinclusion.org/rapid-innovation-how-fintechs-are-adapting-under-covid-19/" target="_blank" rel="noopener noreferrer">emergency savings, repayment flexibility</a>, and <a href="http://www3.weforum.org/docs/WEF_The_Global_Covid19_FinTech_Market_Rapid_Assessment_Study_2020.pdf" target="_blank" rel="noopener noreferrer">fee waivers and reductions</a>, which many implemented in response to the pandemic last year. Fintech startups can rise to meet new needs and habits of underserved people, to enable the rebuilding that is needed going forward. <a href="https://bfaglobal.com/bio/maelis-carraro/" target="_blank" rel="noopener noreferrer">Maelis Carraro</a>, Director of <a href="https://bfaglobal.com/catalyst-fund/" target="_blank" rel="noopener noreferrer">Catalyst Fund</a> and an IF50 judge, observed, “Throughout the pandemic, fintech startups demonstrated their ability to adapt to meet their users’ needs and have seized the opportunity to do so. Now more than ever, users need their agility, creativity, and innovation to enable an inclusive recovery.”

To innovate during these difficult times and deliver solutions for recovery and rebuilding, startups will need to shift their focus to longer-term financial health and resilience. <a href="https://www.linkedin.com/in/krishnathacker/?originalSubdomain=sg" target="_blank" rel="noopener noreferrer">Krishna Thacker</a> of <a href="https://www.metlife.com/sustainability/MetLife-sustainability/MetLife-Foundation/" target="_blank" rel="noopener noreferrer">Metlife Foundation</a>, co-founding sponsor of IF50 noted that, “At MetLife Foundation, we recognize the ability of tech to reach low-income people further and faster, but we’re also focused on engaging the customer and changing their financial outcomes. Through Inclusive Fintech 50, we want to identify, recognize and support organizations that are going beyond inclusion to build resilience and financial health for low-income customers – a need highlighted by the pandemic.”
<blockquote class="pullquote--right">We want to identify, recognize and support organizations that are going beyond inclusion to build resilience and financial health for low-income customers.</blockquote>
Fintech startups are already recognizing this opportunity:

<a href="http://dinarak.com/" target="_blank" rel="noopener noreferrer">Dinarak</a>, a fintech startup that won the 2019 IF50 competition, helped the Government of Jordan deliver social transfers digitally soon after the pandemic broke out. In doing so, recipients were registered for a Dinarak wallet, and the startup became known as the bank for poor people. With the customer acquisition and trust challenges largely addressed, the startup can now turn its attention to designing products and services that can help these users rebuild their lives and livelihoods.
<ul>
 	<li>In Ghana, last year’s IF50 winner <a href="https://www.oze.guru/" target="_blank" rel="noopener noreferrer">OZE</a> was able to leverage data from small businesses using their management app to offer them emergency credit precisely when they needed it most.</li>
 	<li>South Africa’s <a href="http://www.a2pay.co.za/" target="_blank" rel="noopener noreferrer">A2Pay</a> was able to make a <a href="https://bfaglobal.com/insights/fintech-innovations-to-enable-mse-recovery-in-south-africas-townships/" target="_blank" rel="noopener noreferrer">similar adaptation</a>, offering spazas (informal convenience shops in townships) working capital to stock inventory precisely when they lacked the liquidity to do so.</li>
 	<li>Finally, <a href="https://www.awantunai.co.id/" target="_blank" rel="noopener noreferrer">AwanTunai</a>, a 2019 IF50 winner, has helped hundreds of SMEs digitize payments, invoicing, and purchasing, which has enabled them to survive COVID lockdowns.</li>
</ul>
However, these opportunities are not guaranteed. Pickens noted that, “Fintechs are key to enhancing access and the benefits of digital adoption for the underserved. Visa is committed to work with the payments ecosystem on initiatives such as Inclusive Fintech 50, to support small and micro business owners to become digitally enabled and rebuild stronger, more competitive and resilient businesses for the recovery of our communities.”

To encourage and spotlight startup efforts that go above and beyond, this year’s <a href="https://www.inclusivefintech50.com/2020-judging-panel" target="_blank" rel="noopener noreferrer">IF50 judging panel</a> is looking for startups, like those mentioned above, that are helping to rebuild economies, communities, and households in ways that are more inclusive, resilient, and empowering. El-Zogbhi notes, “As difficult as this crisis has been, it has prompted a surge in fintech innovation and an openness to new ideas, the benefits of which could be applied to other challenges beyond the pandemic. We need to be intentional about how we can use this as a springboard for making advances elsewhere, such as with women’s financial inclusion, the responsible use of data, and in navigating the impacts of climate change.”

The <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">IF50 competition</a> brings together leaders in the inclusive fintech community, including startups, investors, and experts. The judging panel consists of leading investors, startup founders, and other stakeholders, each with a unique ability to identify models, features, and channels that can truly transform people’s lives.

Not only will participating startups benefit from the exposure and networking among the judging panel, but winners of the competition will also be globally recognized as leading the way in inclusive fintech. This year’s winners will be featured along with leading investors and industry experts during <a href="https://centerforfinancialinclusion.org/about/what-we-do/financial-inclusion-week/" target="_blank" rel="noopener noreferrer">Financial Inclusion Week</a>, an annual series of digital events organized by CFI to bring together the inclusive finance community to exchange on the latest developments and key issues facing the sector, in early November. Such exposure and networking improve startup visibility and credibility among investors; 19 winners from the 2019 cohort have since raised $182.5 million. Winners will also be featured in <a href="https://www.inclusivefintech50.com/briefs" target="_blank" rel="noopener noreferrer">research and insights work</a> at the Center for Financial Inclusion.
<blockquote class="pullquote--left">Winners of the competition will be globally recognized as leading the way in inclusive fintech.</blockquote>
Moreover, this year’s award package includes new support tools from Visa. Winners will be able to take advantage of Practical Business Skills, a global digital platform created by Visa to deliver free educational resources to help small and micro business owners make confident, informed decisions to grow their businesses. Winners will be able to customize and co-brand this turn-key solution to support the local recovery efforts of the small and micro-businesses they serve. Winners who are <a href="https://partner.visa.com/homepage.html" target="_blank" rel="noopener noreferrer">eligible</a> for Fintech Fast Track will be automatically pre-qualified for the program, which provides access to Visa’s ecosystem partners, online licensing and APIs to help fintechs enhance and introduce new and innovative payment experiences. These tools, together with the networking and platform that IF50 provides, serve as an invaluable platform for startups at the earliest stages of their journey.

Inclusive Fintech 50 is sponsored by MetLife Foundation, Visa, and Jersey Overseas Aid &amp; Comic Relief, with support from Accion and IFC. There is no fee to apply, and we encourage all interested fintechs to submit their applications within four weeks of the competition launch on June 28. Applications will be accepted in English, Spanish, and French. The 2021 winners will be announced in October.

Inclusive Fintech 50 Launches 2021 Competition: Driving Innovation in an Era of Uncertainty

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

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

A global innovation competition that aims to identify and elevate cutting-edge emerging inclusive fintechs that have the potential to drive financial inclusion.

Eda Dokle

Chantelle Macey

Ethan Loufield

Malika Anand

Julia Arnold

Tess Johnson

Nikhil Gehani

Marie Valdez

Blaine Stephens

Latin America and The Caribbean

Middle East and North Africa

South Asia

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Inclusive Fintech 50

India is a global leader in financial inclusion. For over a decade, Accion has worked with and learned from India’s innovators, investors, and policymakers to expand economic opportunity for its people and businesses.

The majority of Kenyans have mobile money accounts; their activity demonstrates digital financial services’ potential. Accion helps Kenyan innovators harness emerging technologies to create new financial services.

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.