Micro-finance? It’s so much more…

  • Andrèe Simon
  • 19 November 2021
  • Blog | Fintech and Innovation in Banking | Blog

FinTech companies bring a unique style of innovation that puts a clear focus on data analytics along with the technology. It’s incredibly powerful and has played a transformational role for all the areas of financial services that needed to evolve in order to serve people better. When it comes to financial inclusion, though, we need to tackle a multi-sectoral challenge. 

Social enterprises still have an essential role to play to bring about financial inclusion. They are partners in helping to address the question of financial access because, at the end of the day, people need more than access to money to get out of poverty.  

The role of micro-finance is at the centre of it. Quite honestly, we need to think more broadly and focus on financial health. We need to recognise that micro-finance organisations are delivering much more than just financial services. Fundamentally, micro-finance is part of addressing the root causes of instability – issues that go much deeper.   

What we’re talking about here is fostering informed agency and choice. There are multiple, complex issues that vulnerable people confront that can include access to energy, health and education as well as gender disparity. We need partnerships that are looking to solve housing problems, for example, and so I think it’s all good that people are taking various parts of that puzzle to try and solve complex challenges more holistically.  

Once people have the ability to provide for themselves financially – and to build their own financial health – they can make informed choices. They can better afford education and healthcare and can more actively contribute to the economy. In the absence of that opportunity, it’s going to be very difficult for them to have any sense of wellbeing or protect themselves against minor external shocks, let alone a pandemic.  

I’m so glad for the shift that’s taken place with the orientation toward technology. It’s made everybody rethink how we should be doing banking and why it needs to be more user-friendly and client centric. All of that is awesome, but we also need somebody out there with a megaphone, so we continue to hear and talk about the real social impact of changing technologies. We need to make sure that people aren’t hurt as part of this change.  

Read more from Andrée Simon in the ‘Inclusion gets personal’ article on pages 14-16 of the summer 2021 issue of Chartered Banker magazine.