2

FinTech can address many of the constraints to FI –

informational, cost, risk.

Are policymakers and regulators adjusting their toolkit

and approach fast enough?

So far, the use of technology has primarily been for

improved/lower cost access to digital payments e.g.

through mobile money services, cards.

This is a critical first step –

how do we accelerate move to full FI?

3

Credit Registries, Bureaus

Secured Transactions Frameworks,

Credit Guarantee Schemes

Credit lines linked to Advisory Services,

Guarantee Schemes,

SME Exchanges, SME Funds

Financial Education

Extend branch networks

(State banks, rural branch requirements,

credit unions, specialized MFIs…)

Psychometrics, “big data” analytics,

digital footprints

Payments and credit through supply

chain (data availability due to electronic

transactions)

Crowdfunding, P2P lending,

Supply Chain relationships

Tailored information/messages, Personal

financial management, Automated advice

Digital ID and Payments open up low

cost access through PoS, ATMs, agents

4

Financial inclusion means universal access to a wide range of financial

services provided in a safe, efficient, and appropriate manner.

Source: A Digital Pathway to Financial Inclusion, Gates Foundation.

Payments, remittances, mobile wallets. Savings, insurance, credit, etc.

5

• New mobile financial services are moving beyond payments and transactions to include

insurance (e.g. Tigo Family Care in Ghana), credit (e.g. Safaricom’s M-Shwari in Kenya),

and savings (e.g. Equity Bank’s M-Kesho in Kenya).

• Some of these services have been enabled by innovations providing alternative credit

scoring methods (e.g. psychometrics, big data analysis, digital footprints), facilitating

remote account opening and handling (e.g. mobile-based KYC), and others.

The Oi-Paggo pilot in Brazil:

Cignifi partnered with Oi Telecom in Brazil on to pilot its credit scoring platform, built using

data from 2.7 million Oi prepaid users.

The scoring proved to be a significant indicator of loan default risk and client response to a credit offer.

$

Anonymized

information Scoring, phone

Offer

Acceptance Fee

Fee

Partner bank Client

6

• Additionality and Leverage are critical: conventional responses need to

be rethought/revised, carefully targeted and designed. For example:

Provide critical mass/viability to accelerate roll out and uptake of new

channels and providers (India push)

Provide a safe and enabling regulatory environment for P2P lending/

crowdfunding (UK also providing subsidies to match SME finance)

Underwrite electronic platforms to match up SMEs with finance, and ensure

policy framework in place for online transactions, contract enforcement

Adapt data privacy laws, and oversight, to cover non-traditional data brokers

which ‘mine’ available social or transactions data

Leverage potential for low cost Fin Ed through automated financial advice

• NB ‘New’ risks need addressed through Policy and Legal Frameworks

Regulatory framework, supervisory capacity, industry standards, consumer

representation