Note from the Publisher: Actually, we’ve covered this story several times before, but we we heartened to see a piece appearing on the +International Monetary Fund’s website today also discussing the promise of fintech for the world’s 2 Billion+ souls who don’t have a bank account and are referred to as the “underbanked”. In Kenya, apps such as M-Pesa, which were previously used to transfer unused mobile air time to one another is now a mobile payments system. Cross-border payment transfer systems are also benefitting the underbanked by providing lower exchange rates and fees. We’ve said it before and we’ll say it again – fintech is tranferring the world’s monetary system.
” -Financial inclusion boosts growth
-Financial technology can help provide financial services to all levels of society
-Affordable financial services in low-income countries a development opportunity
More than two billion people worldwide are without bank accounts. Most are poor and only a third of adults in sub-Saharan Africa have access to any kind of basic financial services. IMF Deputy Managing Director, Mitsuhiro Furusawa, says the region is running the development race weighed down by exclusion.
“Access to financial services allows families to smooth out consumption and invest in their futures through education and health. And access to credit enables businesses to expand, creating jobs and reducing inequality,” Furusawa added…..
There are many reasons for the lack of access to traditional financial services, but Roger Nord, Deputy Director of the IMF’s African Department, says technological innovation within the financial sector, commonly known as Fintech, is perhaps the most promising way to advance financial inclusion.
“Access to formal financial services is often difficult in low-income countries: bank branches are concentrated in urban areas, and costs and fees can be high. Financial technology can tackle both problems at once: suddenly financial services are available to anyone with a mobile phone at a fraction of the cost,” Nord said.
And the rapid spread of technology is proving its worth. Sub-Saharan Africa leads in the adoption of mobile banking around the world.”