‘Satoshi Was a Black Woman’: Blockchain Entrepreneurs Talk Financial Inclusion. How Blockchain Can Disrupt Gender Inequality.

2021 will be a crucial year for the refinement and retooling of technologies, especially those that took the spotlight during the year of social distancing and lockdowns.

As office culture returns, spaces will be less populated and personal, and the aesthetic will shift away from the collaborative “campus” model.

Over the next year, workers will find themselves returning to an office very different from the one they left last year. In the short-term, employers are focused on cleaning, sanitization, and air quality, and may look to disinfection startups, self-cleaning tech, and an array of other solutions to help keep air and surfaces clean and germ-free. But the effects of the past year of lockdowns will extend beyond cleaning and social distancing measures.

More long-term, expect to see offices becoming increasingly like hotels used for short visits, and less like the cushy big tech “campuses” that came into fashion in the pre-Covid era.

To space people out, desk areas may become less personalized. Software companies like Skedda, Meetio, Robin, and iOffice-owned Teem are helping employers with customizable hot-desking and co-working scheduling solutions. Rather than having their own cubicles or offices, workers may only come into the physical office a couple times a week, after booking work spaces in advance. This can also help organizations save on leasing costs.

For larger spaces like conference rooms, cafeterias, and events venues, scheduling software can facilitate booking and “check-in” and “check-out” protocols, as well as manage cleaning between uses.

Interior office design may also see significant changes. In recent years, office design for tech giants like Google and Microsoft has focused on a cheerful, collaborative campus atmosphere that encourages workers to spend time at work and freely interact with others. Now, as the coronavirus pandemic normalizes remote work, and as concerns about distancing reduce casual in-person interactions, office spaces may no longer be designed to maximize in-office time or facilitate casual employee interactions.

For times when they do want to encourage in-person work, employers will have to find a way to balance the sterility of a clean, safety-first environment with pleasant, attractive spaces. Plants, natural light, and better airflow could all be major design focuses for companies looking to bring the outdoors in and make office spaces more desirable without detracting from cleaning and distancing protocols. Simple measures like touchless doors could make offices feel safe and modern. Together, deliberate tech and interior design choices can make offices more enticing spaces, even in the age of work-from-home and social distancing.

Non-industrialized countries have not kept pace with digital advancements, but the ever-evolving landscape of blockchain has provided a proliferation of smart innovations to bridge the tech gap. The decentralized ledger technology is being utilized by some pioneering women to engineer solutions for more equitable opportunities in emerging economies.

“The concept of financial inclusion wasn’t something that I realized until I moved to the U.S.,” recalls Carmelle Cadet, CEO of EMTECH told The Plug. Growing up in Haiti, Cadet said the structure of the financial system can be economically crippling to citizens who are reliant on high-fee remittance payment systems to send and receive money. Remittance transfers shrank 14 percent—the first decline in a decade due to the economic crisis brought on by the pandemic. The $3.5 billion dollar industry makes up 23 percent of the country’s GDP in 2019, and is the 6th highest in the world.

Initially starting a nonprofit to educate adults about financial literacy, Cadet grew frustrated with the tedious task of soliciting donors for funds, “I told myself that I had to find another sustainable way to have an impact other than just [relying] on aid money,” she said. “When I first heard about blockchain I knew it was what we needed to provide finance [to people] regardless of how much money you have, or the country you live in.”

A plethora of crypto trading platforms have emerged in recent years, allowing anyone to join a global market whose growth is expected to reach $5.1 billion by 2026, a 30 percent increase from 2019. The growing popularity of digital assets like bitcoin and ethereum have become the most popular in the crypto-economy, and are responsible for the surge in interest from sophisticated and novice investors. In the third quarter of 2020, there were around 18.5 million bitcoins in circulation worldwide, and more than 43 million active crypto traders just on Coinbase, the largest cryptocurrency exchange platform in the U.S.

Outside of finance, blockchain has also been an invaluable resource for a secure peer-to-peer pipeline of communication for social activists. 

“The revolutionary nature of blockchain technology to empower people with the economic freedom and give them back control,” Cleve Mesidor, founder of LOGOS, a decentralized social platform exclusively for activists, told The Plug. “There’s a standard case for decentralization and that’s we don’t want a centralized power controlling the message.”

During the #EndSARS protests that erupted in Nigeria over the summer calling for the disbanding of the Special Anti-Robbery Squad because of police brutality, donations to support protesters through bank transactions were found to be purposely slowed down. Activists then turned to bitcoin and began leveraging other digital tools to fund the campaign.

Mesidor’s serendipitous venture into cryptocurrency and blockchain came after serving as the Director of Public Affairs for the U.S. Department of Commerce’s Economic Development Administration, under former President Obama. Tasked with developing economic programs to advance innovation and entrepreneurship, she described her extensive career in politics and public policy as being a perfect prerequisite for her transition into cryptocurrency.  

As cryptocurrency adoption accelerates across the world; Africa, Brazil, Peru and some regions in Latin America are among a few countries with the largest share of cryptocurrency users. Countries with weaker currencies and high inflation have been quicker to embrace cryptocurrency as an alternative. According to a Global Consumer survey conducted by Statista, out of 74 countries, Nigerians were most likely to say they’ve either used or owned cryptocurrency.

 “The challenge that we have is that innovations are stifled by regulation,” said Todd, whose portfolio of clients are mostly blockchain platforms in the financial services sector. “People are giving up their residency in Canada and going to other countries because Canada has some very archaic laws.”

In the U.S., cryptocurrency is in circulation. Although not considered a legal tender at the federal level, laws governing whether or not it’s legal vary by state. There are still no definitive regulatory guidelines regarding the usage of digital currency. Last week, in conjunction with the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), lawmakers introduced legislation to provide more clarity on digital currency regulation in the U.S.

 Africa is becoming the next frontier for digital currencies, with some governments moving forward to integrate crypto assets in their financial systems by making it a legal tender to be used by citizens. Tunisia became the first country in Africa to issue a national digital currency, and earlier this month, Ghana’s central bank launched a regulatory and innovation sandbox, with a focus on projects building on blockchain technology. 

EMTECH serves as a resource for central banks and continues to expand its operations in Africa, the Caribbean, and the U.S. Recently, Cadet partnered with The Bank of Ghana to help provide products and services with the ultimate goal of promoting financial inclusion to close the gap between underbanked and unbanked Ghanaians. 

According to a survey conducted by the International Journal of Central Banking (IJCB), 65 percent of central banks are researching, or exploring launching a digital currency. A former IBM Global exec, Cadet is hoping to change the narrative on how central banks can establish a more equitable banking infrastructure by using blockchain to their advantage. 

 “There is a real possibility for central banks to be disrupted, but the better alternative is [for banks] to engage,” Cadet said. “If you say you want to have financial inclusion – blockchain and digital cash can give you that.”

Tech Can Reach the World's Unbanked Women – but Only if They Tell Us How it Should Work

Lack of formal ID is one common barrier to accessing financial services.

Women make up 55% of the world’s unbanked population, meaning they have no access to banking or insurance products. For many of these almost 1 billion women globally who have no access to financial services, it means that their money is not protected, they have no access to savings or checking accounts, or financial products like insurance, credit facilities and loans.

One of the core reasons why women face this problem is due to the lack of a formal identity. According to a recently released G20 paper, Advancing Women’s Digital Financial Inclusion, co-authored by the Better Than Cash Alliance, the World Bank and Women’s World Banking, one in five unbanked women globally cite lack of a formal ID as a reason they do not have a formal bank account. Sustainable Development Goal 16.9 states everyone should have a legal identity by 2030.

This lack of knowledge in women-centric product design has real economic consequences. The McKinsey Global Institute estimates that fully incorporating women into the economy would add $12 trillion to global GDP by 2025. In other words, realizing gender equality lifts all nations. There is an obvious opportunity for private organizations to innovate and build solutions to achieve financial inclusion for women.

Over the past number of years, we at AID:Tech have spoken with potential end users to better fully understand their needs, their barriers and how they view technology to better serve them. We have run pilots from delivering international aid in refugee camps, to delivering welfare to women to ensure there is full transparency on their entitlements. What we found was that successfully digitizing financial services is linked to women’s ability to prove who they are and ensure their personal information is secure. Using a digital ID can help lead to a number of positive outcomes, such as:

? Building data credit profiles

? Providing a safety net with automated insurance policies

? Enabling privacy and security of funds owned

One very exciting area is micro-insurance. AID:Tech and Women’s World Banking are partnering to build an innovation platform, called Caregiver, that will enable women to access micro-insurance policies. By bundling health insurance together with a loan, women micro-entrepreneurs can mitigate the risk to their households and businesses in the event of a health emergency. At the very core of the Caregiver platform will be a decentralized digital ID, which will enable users to have a verified single source of identification when presenting their details to financial institutions.

What is the World Economic Forum Doing to Champion Social Innovation?

Social innovators address the world’s most serious challenges ranging from inequality to girls’ education and disaster relief that affect all of us, but in particular vulnerable and excluded groups. To achieve maximum impact and start to address root causes, they need greater visibility, credibility, access to finance, favourable policy decisions, and in some cases a better understanding of global affairs and access to decision makers.

Meet the World-changers: Social Innovators of the Year 2020. Our global network of experts, partner institutions, and World Economic Forum constituents and business members are invited to nominate outstanding social innovators. Get in touch to become a member or partner of the World Economic Forum.

How Women Are Changing the Face of Enterprise Blockchain

These women’s perspectives have been a game changer for the enterprise blockchain sector.

Findings show that during the first six months of 2020, 20 women-led startups raised a total of $875 million. On the other hand, 243 startups founded by men raised around $12 billion during the first half of 2020. It’s also highly discouraging that pay data from Coinbase, one of the most popular crypto exchanges in the world, showed that female and Black employees had been underpaid in previous years.

Yet hope springs eternal for the future of women in blockchain. While it is still very much male-dominated, there are a number of remarkable women innovating at a high level in the enterprise blockchain space.

Bringing neuro-diversity to enterprise-grade systems

For instance, Lisa Butters, general manager of Honeywell’s GoDirect Trade Greenhouse — a blockchain-based marketplace for used aerospace parts — told Cointelegraph that while it may not be obvious, a female perspective can bring a different, yet much-needed, outlook to business situations. Specifically, Butters mentioned that women are notorious for making sure enterprise systems are efficient and user-friendly:

“Women are known for organization. Our playroom at home looks like a bomb dropped on it. My minivan looks like four pounds of goldfish inside a container was sprinkled in every crack and opening. But when I look at those ‘messes,’ as a woman, I naturally want to jump into preventing things like this. When it comes to an enterprise systems’ efficiency and user friendliness, I bring the same thought processes.”

For example, Butters shared that when GoDirect Trade first designed a blockchain ledger to collect data events connected to aerospace parts, each event had various fields associated with it. Butters explained that a part’s “birth event” may have had seven related fields to capture, while a “repair event” may have had nine related fields. 

However, Butters noted that sometimes the only field obviously associated with a part was its serial number. As such, Butters explained that she needed to develop a scalable approach to data collection.

User-friendliness and efficiency are some of the most important elements for enterprise systems. In a GoDirect Trade blog post, Butters mentioned that the company website reflects this, pointing out that the site is a blend of Amazon, Etsy, Mercari and Target. Butters wrote in her post, “If a 43-year old male was the sole voice to design our aerospace marketplace, do you think it would have looked like this?” 

Chaitanya Konda, global blockchain lead for research and development at Ernst & Young UK, told Cointelegraph that her work revolves around making the token economy vision a practical reality. “This necessitates providing privacy and scalability for token transactions and complex business logic surrounding tokens at a reasonable transaction fee,” she remarked.

Like Butters, Konda understands that women are typically good at multitasking and therefore forge an innate ability to come up with efficient approaches to tackle simultaneous challenges. “Having women bring this mindset in designing and developing these enterprise systems can be extremely valuable,” said Konda.

This also applies to another important element of the blockchain sector: open-source projects. Anais Ofranc, a member of the Baseline Protocol Technical Steering Committee and CEO of Consianimis Consulting, mentioned that she is helping ensure that different stakeholders, personas and interests are represented in open-source systems. “The female perspective is important during the decision-making process for open-source projects,” she said.

Echoing Ofranc, Kaliya Young, ecosystems director for the COVID-19 Credentials Initiative at the Linux Foundation, told Cointelegraph that the majority of her work focuses on building open standards for verifiable credentials. Young noted that community collaboration is a major requirement for building open-source standards, pointing out that a female perspective is critical. “Sometimes this is undervalued, but a female’s perspective is critical if we want to develop a new layer of the internet where all people are empowered,” she remarked. 

A Harvard Business Review article reiterates this, mentioning that numerous studies have shown that employees in pro-diversity regions, like the United States and Western Europe, prefer gender-friendly work environments. As such, studies show that the most talented individuals typically tend to work in places that are gender diverse, ultimately leading to better performance. 

Daniela Barbosa, vice president of worldwide alliances at The Linux Foundation, told Cointelegraph that just like any other tech industry, diversity in the enterprise blockchain space is important for building solutions that address the needs of society rather than the needs of a few.

For example, Barbosa explained that creating a supply chain network to ensure sustainable food production must address financial inclusion for multiple parties, including the unbanked, the fully banked or even a finance system that gets bankers and suppliers paid faster with less risk. “Developing and deploying such networks will benefit from diverse approaches and experiences at both the technical and business level and be better set to meet user-friendly design and efficiency goals,” she remarked. 

Ryan Rugg, blockchain industry service leader at IBM Global Business Services, told Cointelegraph that she is spearheading the United States’ blockchain team at IBM — for example, launching New York’s COVID-19 vaccination management solution, powered by IBM Blockchain’s Digital Health Pass.

Fortunately, the open nature and inclusivity of the blockchain space may drive more women into the sector moving forward. Progress is already being made, with a report from CoinMarketCap showing that the number of women in the cryptocurrency industry increased 43.24% in the first quarter of 2020.

Sheila Warren — head of data, blockchain and digital assets at the World Economic Forum — told Cointelegraph that overall, the hiring and retaining of teams representative of diverse perspectives leadsto better outcomes. Warren noted that the promise of blockchain technology provides the opportunity to build from the ground up:

“If done intentionally, this will correct for some of the inequities that we see in technology today. Without diverse perspectives represented in the room, it’s very possible that we’re at risk of replicating or even exacerbating these.”

It’s also important to point out that women do not need prior blockchain experience when entering the sector. Leanne Kemp, CEO of Everledger — an enterprise blockchain company for supply chain management — told Cointelegraph that women can bring valuable community-building skills and help provide long-term strategic vision, even if they don’t have a background in blockchain technology specifically. “Skills like determination and attention to detail come easily to women, making them a valuable asset in this growing technology,” she remarked.

Ways to Get More Women Involved in Blockchain

Given the importance of gender diversity in tech, many believe that education, mentorship and job opportunities will ultimately attract more women to the blockchain space moving forward. 

For instance, while there are many open-source projects in the enterprise blockchain space, Ofranc mentioned that there is an obvious lack of diversity. She explained that moving forward, she would like to see greater outreach from open-source organizations targeting universities and young women in particular to raise awareness of the benefits of contributing to open-source or open-standard projects. 

Warren further mentioned that companies must think long term about investing in the next generation of female leaders in blockchain. In order to ensure this, Anna Frankowska, chief commercial officer at Aventus Network — a firm developing a layer-two blockchain protocol — noted that role models in the industry will encourage more women to enter the space long term:

“As more women enter and succeed, more women will enter and succeed in a self-sustaining virtuous cycle. Opportunities exist, and I know first-hand that we’re crying out for excellent people, and there is no gender monopoly on excellence.”

Cryptocurrencies for Change: Why We Need Women on the Blockchain

This blog was coauthored by Maiya Moncino, a research associate in international economics at the Council on Foreign Relations.

In the world of cryptocurrency, women are shockingly underrepresented, even compared to the overwhelmingly male tech sector as a whole. According to Google Analytics data as of June 2018, 91.2 percent of individuals engaged in the bitcoin community are men.

Cryptocurrencies are digital assets that are secured by cryptography and registered on a public blockchain. A blockchain is a distributed ledger that records transactions publicly and securely. Because it is distributed, it is not managed by a centralized entity, such as a bank or technology company. Blockchain technology eliminates the middleman, allowing transactions to occur directly between two people. The most prominent cryptocurrencies, like bitcoin, have focused on payments, but blockchain technology can be used to facilitate computation, storage, and many other cases. This technology has the potential to revolutionize many elements of our lives, in finance and beyond, though some are skeptical of its long-term viability.

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Women and Women's Rights

Technology and Innovation

It is not only an issue of equitable distribution of wealth. There are many reasons to believe that women can contribute to the industry in significant ways, and that a lack of women could be detrimental.

“There are studies out there that suggest men are predisposed towards bubbles in a way that women are not,” cautious Duncan Stewart, research director of Deloitte Canada's technology division. Researchers note that women tend to be more cautious in investing in the stock market, but tend to outperform their male peers. In an article titled “Is Bitcoin a bubble? Gender split says probably,” Stewart wrote that, of course, the gender disparity doesn’t prove that Bitcoin is a bubble. “But the fact that 95 percent of the investors in BTC [bitcoin] and other cryptocurrencies are men is a really big red flag for me,” he wrote. “I cannot think of any security, currency or asset class in history that shows that extreme a gender divide and has been sustainable.”

So far, women have played only a minor role in shaping the applications of blockchain technology. According to an international Quartz survey that considered 378 venture-backed cryptocurrency startups founded between 2012 and 2018, only 8.5 percent were founded or co-founded by a woman. In the tech sector as a whole, twice as many startups have a woman on the founding team—still low, at 17.7 percent, but much better than in cryptocurrencies.

Promoting Women and Youth Financial Inclusion for Entrepreneurship and Job Creation

The topic of financial inclusion has become an integral part of any discussion on economic development. Globally, it is generally understood and empirical evidence exists to show that there are 2 billion financially disempowered people in the world. Along with this come the complex issues of gender inequality, youth discrimination and the business case of serving this demographic sustainably. There is a clear need for collective action by governments, global development agencies and the private sector to change the status quo and ensure that there is a level playing field for everyone to access their full potential. The multi-country study being conducted by African Center for Economic Transformation (ACET), an economic policy institute supporting Africa’s long-term growth through transformation, is key to ensuring that efforts to level the playing field are grounded in sound, practical research insights from key stakeholders. This paper gives a broad overview of the financial inclusion environment and lays out the need for an inclusive financial environment that prioritizes women and youth financial needs. The key issues in the industry along with the approaches exemplar nations are taking to address them as well as the cutting edge innovations, industry practices and regulatory developments are all examined through the lens of women’s and youth’s financial inclusion; the intention is to highlight the key macro issues at the world stage that should be factored into the overall design of the ACET comparative study on three Sub-Saharan countries.

Why the Focus on Women and Youth?

Recent evidence shows that when women – who represent 50% of the total addressable market in every country – participate in the financial system there are significant benefits in terms of economic growth and societal well-being. While the number of financially excluded has reduced globally by 500 million over a three year period, the gender gap has experienced only a modest change. McKinsey Global Institute concludes that removing the diverse obstacles confronting women and obviating their production and participation in the formal economy means adding US$28 trillion to global GDP in 10 years. This non-trivial figure clearly demonstrates that a financial inclusion programme that lacks emphasis on enhancing opportunities for women is far from achieving its target.

Too, technology barriers such as lack of access to mobile phones also limit the entrepreneurial potential and productivity of women. In early 2015, GSMA published research calculating the gender gap in mobile access and usage, which found that closing the gender gap in mobile ownership and usage could add an additional US$ 170 billion to the industry by 2020. Even how financial education is packaged and delivered, research has proven, has a connection to female acceptance and adoption. Women tend to be less technically and financially literate than men and have lower confidence levels in using mobile money services. Additionally, a woman’s access to mobile money agents is limited, owing partly to her defined role as a homemaker in many cultures, and as a result is unable to ask clarifying questions and receive assistance more readily than men. Mary Ellen Iskenderian again mentioned that poor women tend to be averse to financial language and so for example, calling PIN a “secret code” is likely to reduce a barrier7 . Until these gaps are clearly identified, understood, and eliminated the rate of decline in financial exclusion will be limited by the total number of underserved and excluded women, who typically make up more than 50% of the economically marginalized, relegating the goal of financial inclusion to a mere dream.

Youth Financial Inclusion

Another very important disenfranchised group that holds strong promise for financial inclusion is the youth. It is an open secret that Africa has the largest youth “bulge” and is experiencing a growth spurt that exceeds that of other continents. There are currently 370 million in Sub-Saharan Africa between the ages of 15 – 24 years and undoubtedly a significant proportion of these will in a few years’ time need to borrow to meet daily and unexpected needs, launch income generating activities and save for the future8 . In many developing economies of which SubSaharan Africa is a part, the paucity of formal employment opportunities and turbulent economic standards is a grave challenge many young people must confront right after school. Even those who try to explore entrepreneurial options are more often than not illequipped to navigate the tortuous paths of raising capital, developing sound business plans, sourcing the right human capital and planning financially for the future to make it successfully through the launch phase. The failure to successfully transition out of school with the right marketable skills and capabilities may mean a youth that languishes in poverty and is unable to escape the poverty trap.

The private sector is also waking up to the prospect of this future client base and contemplating a range of saving, credit and financial literacy packages that meet their need. They are re-examining their business models by taking a long term view of their young clients, segmenting the youth population by the level of financial access and the complexity of their need and harnessing the power of technology to attract this demographic. Policy makers and regulators are also seeking pragmatic approaches to modifying regulations so financial institutions are not overburdened by KYC costs but that both customer and institutional protections are balanced. Overall, there is an active community of key stakeholders that are supporting reforms that place the youth at the center of global financial inclusion initiatives.

Integration of Financial Inclusion Agenda Into National Policy

To be effective, gender and youth financial exclusion cannot wholly be a universal effort that lacks local emphasis. It is crucial for nations to integrate the women and youth agenda into their national strategies to ensure that all stakeholders are locally coordinated and well aligned on a national goal. In 2016, the Alliance for Financial Inclusion (AFI) conducted a survey among its members and found that only 22% had an explicit focus on issues related to gender financial exclusion within their national financial inclusion strategies. AFI subsequently published a learning guide on “Integrating gender and women’s financial inclusion into national strategies” and made it an integral part of their ongoing capacity building programme for its members. A good place for curious governments to start is with the Denarau Action Plan10 shared at the 2016 AFI Global Policy Forum in Nadi, Fiji. The Denarau Action Plan is a practical document that identifies measures AFI members can take to increase the number of women with access to quality and affordable financial services globally. Its overall aim is to provide guidance to governments who want to promote an enabling environment for women’s financial inclusion through the adoption of smart laws and policies. Integrating gender balance into national policy documents helps all stakeholders to begin or redefine the conversation on balancing gender and youth dynamics in access to finance.

Research from the World Bank Group indicates that when countries and institute commit to a national financial inclusion strategy, they tend to increase the pace and impact of their programs and initiatives.

One of the central issues that has been gaining momentum particularly among regulators and policymakers is how they can develop legislation that balances the need for customer and institutional protections. Regulators draft regulations in an effort to protect the customer, the service provider and the marketplace in general – but these same regulations are often barriers to both women and youth financial access. FSPs by law are required to capture detailed bio data and situational data on a prospective customer before account opening, a process referred to as Know Your Customer or KYC. Credit requirements can be even more onerous for the client and can quickly disqualify the rural adult woman or youth from accessing their first loan from a bank. Women in particular are less likely to have official identification documents required to open a bank or mobile money account. In some markets, a man’s signature is required for a woman to open a bank account and make domestic transfers. The youth also grapple with identity issues and age restrictions. In Ghana and Kenya for instance, children under the age of 18 cannot open a bank account on their own. These are barriers that are hewn in legislation and must be amended or relaxed to enable disadvantaged groups from readily accessing financial services.

KYC issues do not just affect the customer; the provider is also burdened by the compliance costs related to this regulation. KYC and Anti-money laundering regulations can be potentially burdensome for the FSP and reporting requirements can be both tedious and expensive. To remain profitable the prudent bank or insurance company will build this into their pricing strategy, thereby making their products prohibitively expensive for women and young people. A potential solution is for regulators to implement tiered-KYC (limited identification for limited use accounts with limited transactional/value thresholds) so that women and youth can open very basic accounts more easily without stringent identity proofs. These low value accounts can be classified as low risk and the reporting and due diligence burden reduced accordingly.

As demonstrated in the recent example, workarounds exist in many of these instances, especially if both regulator and the private sector are willing to co-create an inclusive environment. In response to the previously identified challenge, HFC Bank in Ghana allows youth to open bank accounts if the parent is the co-owner or with the supervision of a caretaker or a teacher. Uganda Finance Trust also allows inschool youth to open bank accounts using their school identification; out-of-school youth can obtain a letter from a village or church leader. Other countries use creative solutions that rely on biometrics or use group gatherings, where the identified identify the unidentified. It is important to tackle the issue of legal restrictions around identity, age and gender early as it tends to be complex, time consuming and directly influences the foundation of an inclusive finance community.

Trailblazing Innovations in the Financial Inclusion World

Agent Banking Data from the World Bank shows that nearly 2 billion people in developing countries lack access to bank accounts and consequently miss out on the benefits that financial services provide. While providers have their eye on capturing this value there are significant hurdles that must be surmounted first. Many of these so called “unbanked” population are excluded from the reach of most banks not just because of their poverty but also because of geographical inaccessibility, poor infrastructure, perceived high risk profiles and a lack of understanding of their needs. Most significantly, establishing “brick-and-mortar” bank branches in remote areas with poor infrastructure to offer banking services at reasonable cost to the local population on a sustainable basis may be asking too much from the FSP. This is where agency banking comes in. Agency banking affords banks the opportunity to reach economically marginalized populations (rural women and youth) in a way and manner that does not “break the bank”. With this banking innovation, banks are able to use humans, retail points, and designated social centres as the face of the bank to offer deposits, lending, account opening and enquiry, transfers and payments services to the public. This means the colossal capital investment banks have to confront when establishing a branch network is more than halved and the bank is able to rely on a simple network of qualified, trained human resource powered by appropriate technology to extend its reach.

The MNOs have already sped ahead on this innovation and have registered ten times more agents than bank branches in 37 of the world’s mobile money markets as of 201514. MNOs have also moved beyond just offering mobile money services to partnering with financial institutions in order to offer targeted financial offerings. Safaricom Kenya’s partnership with Commercial Bank for Africa (CBA) culminating in the MShwari product offering is touted as a brilliant example of how MNOs are making inroads in the financial inclusion space. But this does not have to be limited to MNOs only; willing, capable and innovative financial institutions can with the help of sound, prudent regulation recover lost market share and extend their reach into far-flung markets with agent banking. Regulation is a necessary gating condition for the rollout of agent banking in any country and as with most national policies this typically takes time. Key issues such as the overall strategy, proposed technology platforms, agent selection due diligence, policies and procedures, intended service offering are key licensing requirements and must go typically go through multiple iterations before final enactment.

Yet, regulators do not have to go this route every time: multiple countries such as Ghana, Uganda, Kenya and Malaysia have taken a permissive approach to this innovation and have allowed interested banks to submit no-objection proposals for consideration. PostBank Uganda and Fidelity Bank Ghana are good examples of banks that have used this approach in order to advance their financial inclusion agenda. Governments should not shy away from using this approach as an incubator of sorts to test the viability of the agent banking model before going through the pains of enacting policy.

Governments that have already crossed this hurdle of uncertainty, like Malaysia who introduced agency banking in 2012, have quickly come to realize that if formulated and operationalized correctly, agency banking remains a key tool that can unlock financial services to underserved regions and groups and allow them to enjoy a range of financial services relevant to unique circumstances.