Fintech solutions have dramatically extended the reach of financial services into the palms of customers’ hands by utilizing the ubiquitous nature of mobile phones. Traditional financial service providers’ cost concerns are a common source of the problem of financial exclusion.
Despite the widespread belief that underprivileged groups cannot obtain services, it’s important to acknowledge that providers could find it difficult to give reasonably priced solutions. Any business must be profitable, and exclusion happens when the expense of providing additional services exceeds the potential benefits. This conundrum creates a contradiction wherein providers believe that serving some demographics is not economically feasible. When services cannot be provided profitably, exclusion results; affordability becomes the pillar.
As a result, companies decide not to provide services to these groups, which keeps the exclusionary cycle going. Therefore, tackling the affordability issue that providers face is essential to effectively preventing financial exclusion. Mobile money providers have increased the accessibility of financial services to previously unreached communities by using mobile phones as the main means of conducting financial transactions. This change has removed the barriers provided by traditional banking infrastructure and allowed those living in rural areas to easily and economically access mobile money. Mobile money has thereby turned into a driver of economic growth and a motivator for financial inclusion, empowering marginalized groups.
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