In developing countries, financial technology is expected to help in overcoming long-standing barriers to financial inclusion. The Internal Monetary Foundation and the World Bank have been pushing for policy adoption of the potential of fintech initiatives.
Research has shown that the implementation and scaling of financial technology in China have yielded positive results in poverty reduction. Fintech has substantially helped in the reduction of financial exclusion in poor, marginalized communities.
The first agenda of the Sustainable Development Goals, which is to end poverty by 2030 is paramount to multilateral organizations like the United Nations and several policymakers. This agenda has motivated the expansion of financial technology inclusion as efforts to eradicate poverty in all its forms are being implemented.
Financial exclusion refers to the lack of access of individuals and populations to common financial services. These can include savings accounts, loans, cashless transactions, credit, and other traditional banking services. Individuals are excluded due to their socio-economic status and their inability to meet the requirements of a formal banking institution.
As a result, this poses a huge challenge to populations, as whole groups of people are unable to participate in the financial sector. Ultimately, financial exclusion prevents these groups from accessing the resources they need to expand a business, pay for higher education, or any number of other actions that could help them work their way up and achieve a better quality of life.
Therefore, financial exclusion contributes directly and indirectly to the poverty index globally. There are an estimated 1.7 billion adults in the world without access to financial services. Fintech can have a major social and economic impact on them.
Nigeria’s financial exclusion rate has only reduced by 1% since 2020 and is currently at 36%. According to the World Bank, the number of Nigerians purportedly living in poverty in 2022 is 95.1 million.
The country’s technology sector has, contrastingly, enjoyed significant growth and steady scaling in the past decade and has seen exceptional fintech solutions spring and thrive.
The growth recorded by these fintech solutions has been seen to have impacted the rate of financial exclusion, directly and indirectly, resulting in the decline recorded. With the scaling and adoption of concerted efforts, an increase in financial inclusion is certainly within reach.
Similarly, since its inception, MAX has been on the mission to fight poverty and improve the lives of Nigeria’s citizens. Recently, insights to manage and increase financial inclusion through technology are being strategized and worked upon.
Soon or maybe sooner, a superb initiative that marries brilliantly, empowerment through job provision & employment, and financial inclusion amongst MAX’s champions might emerge — The ultimate fintech product which will complement already existing financial inclusion initiatives for the champion.
Until then, the scalability and growth of fintech initiatives across Nigeria are needed and are expected to continue. Saturation is not foreseeable in the nearest future as several financial technology schemes only bite a little fraction of the big cheesecake of financial exclusion in the nation.
