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 observed that, “Tech can help providers reach further and faster, but the real focus must be on engaging the customer and changing their outcomes to go beyond inclusion to build resilience”.
<blockquote class="pullquote--right">The real focus must be on engaging the customer and changing their outcomes to go beyond inclusion to build resilience.</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

Inclusive Fintech 50

Financial Service Providers

Fintechs

Blog Post

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

Sub-Saharan Africa

Agent Banking

Delivery Channels

Digital Financial Services

Mobile Banking

Payments

Partnerships

Saving

Underserved Groups

Women

Brief

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

Cambodia

East Asia and Pacific

India

South Asia

Kenya

Philippines

Tanzania

Alternative Data

Financial Technology

Challenges and Crises

Enabling Environment

Health Insurance

Insurance

Inclusive insurance

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>.