Fighting Poverty and Uplifting the Lives of Rural Women With The Power of Fintech

Late last week and earlier this week, the world commemorated the International Day of Rural Women and the International Day For The Eradication of Poverty – both days highlighting the plight of the vast unbanked population. Unfortunately, Zambia remains quite highly ranked in terms of poverty rates, with rural women often being one of the most affected groups. Is this a challenge the growing Fintech industry can tackle??

Figure: Consumer fintech adoption rates globally from 2015-2019, by category

Source: Statista

World over, many of the low-income and unbanked populations are turning to fintech for financial services. Kenya is an excellent example of this, having been able to increase financial inclusion rates from 26% in 2006 to over 75% in 2018 and further, lift 2% of Kenyan households out of extreme poverty and empower women to upgrade from farming to operating small businesses through mobile phone-based microfinancing service, M-Pesa.

In this article, we highlight how the fintech industry can play a role in alleviating poverty and empowering rural women.

Access to financial services

In a world where access to traditional financial services and high-speed internet is still unaffordable for many, the great number of unbanked and underserved individuals comes as no surprise. Fintech, especially through easy-to-use mobile phone-based applications, is able to reduce these barriers by providing lower-cost, faster, and more easily accessible financial services. Over the last decade, 1.2 billion previously unbanked adults were able to access financial services through the use of mobile money accounts, a 35% reduction in the unbanked population globally.

Beyond the use of mobile money accounts for personal transactional purposes, fintech has also enabled Government-to-person financial schemes such as Social Cash Transfer, for example, to run more smoothly. These systems have helped governments quickly and securely reach vulnerable consumers, allowing the transfer of funds with limited physical contact, especially in cases of disability.

This financial inclusion is critical for the empowerment of rural women as these women generally experience unequal divisions of labor and lack control over economic resources. It has been proved that financial empowerment of women creates a trickle-down effect. A study by the Harvard Business Review states that women in emerging markets reinvest 90% of their earnings into resources such as education, nutrition, and healthcare, resulting in the betterment of the community at large.

One key area we as Emerald Finance aim to close the gap in financial inclusion, lift households out of poverty and empower local women is through our mobile-based micro loan service, Ka'Starta. Available through local mobile network service provider, MTN Zambia, this service enables the unbanked population and those using business to sustain themselves and their families to have quick, easy and secure access to loans from as little as ZMW50 to ZMW5,000 through MTN Zambia's mobile money service.

Although according to the World Bank, the global unbanked population is still high at 1.7 billion people (2017), there is tremendous hope that the fintech industry will make a huge impact on this.?

References

1. https://www.dhirubhai.net/pulse/can-fintech-help-alleviate-poverty-low-income-persons-joel-werner/
2. https://www.statista.com/statistics/1055356/fintech-adoption-rates-globally-selected-countries-by-category/#:~:text=Consumer%20adoption%20of%20fintech%20companies,transfer%20and%2For%20payment%20service.
3. https://www.dw.com/en/is-fintech-the-latest-weapon-in-the-fight-against-poverty/a-45920457
4. https://blogs.worldbank.org/psd/fintech-and-financial-inclusion#:~:text=Fintech%20has%20the%20potential%20to,financial%20services%20that%20can%20scale.
5. https://hbr.org/2013/09/global-rise-of-female-entrepreneurs