Written by Tavonga Prosper Mhembere
By definition financial inclusion is the delivery of financial services at affordable costs to sections of disadvantaged sections and low-income segments of society. Some of the tools used to reach the low-income segment are what is seen currently happening globally that is the use of digital money platforms provided by banks, telecom companies, fin tech institutions.
Currently Zimbabwe has recorded an increase in use of digital money and the main reason pushing it is the current cash crisis and this kind of adoption has forced many people to use digital money as just available means of transacting and ignoring other purposes or even understanding how it works and its purpose or impact to the society, this is the reason why we see the same people who are banked are the ones mainly using it yet one of financial inclusion goal is to involve mainly the unbanked. Service providers need to have this in mind when designing and launching their products to accommodate also those unbanked with or without income for them to appreciate the use of digital money so that they are part of the ecosystem and not only at the end of the system to just receive money and cashing it out.
According to the Reserve bank 2017 monetary policy we have 8.9 million registered subscribers across the country while 3.3 are substantive active, clearly as numbers are showing there are 5.6 million subscribers who are not actively participating, without much going into census Zimbabwe rural population is higher than urban, therefore from this you can easily tell that of the 5.6 million subscribers greater percentage is in urban areas and already banked. One of the main reason that causes high number of inactive subscribers is that service providers force people to register without clearly explaining to them use, maybe person registering clients is just an agent who is more worried about increasing his or her commission, this is the reason why we see there is high rate of fraudulent activities as some are registered without even an ID. Another scenario is people from rural areas on their one off time visit to town they meet an agent registering and the agent persuade them to register without fully explaining maybe to get a client the agent only convince a client to register to receive free $1 airtime from the service provider. Last but not least not forgetting that low-income earners are failing to transact constantly because of unavailability of adequate and constant income and this can be witnessed by the researches done that on average low-income earners are surviving with an average of $2 per day.
All service providers need to involve and educate the unbanked society through some of the following ways.
- Service providers must not copy and paste some technological models or solutions to the nation without first doing a market research and see what are the real challenges unbanked society facing and what possible solutions do they deserve because some of the solutions are failing to work in our society because they were not specifically customized to the problem we are currently facing.
- Improving infrastructures, equal access to POS, internet, and technology in rural areas
- Reduction in transaction cost, this can be attained through infrastructure sharing, most low-income earners transact small amounts, therefore, it has to be economic for one to transact.
- Advertising on radio chances is high that you are only reaching those who are banked and financial literate already because in rural areas those who afford solar systems and radio mostly have a background of urban life. Direct marketing to the unbanked, more investment must be done to reach low-income earners, through field marketing
- Design financial products that benefit low-income earners, for example, insurance, medical aid, access to credit,
- Digital money campaign awareness in villages through headman and chiefs to improve financial literacy
- Increase agency representation in remote areas and educate people
Thank you for reading, the writing is based on my personal opinions, therefore, comments and others views are welcome.