Fintechs and Financial inclusion: Lessons Learned – Five Innovation Areas
As Fintech companies targeting poor and underserved customers grow and scale, there is a lack of granularity on how their business models solve pain points in financial inclusion and what the industry can learn from the iterations in their business models. CGAP launched a fintech initiative in 2016 to better understand these innovations and draw clear linkages to financial inclusion, where they existed. CGAP worked with 18 fintechs in Africa and South Asia that targeted financial services to low-income or underserved customers in their markets. Their goal was to learn about the innovations and generate insight on whether (i) the services work as stated, (ii) create value for underserved customers, and (iii) ease age-old pain points in delivering financial services to the underserved. CGAP’s insights are detailed in “Fintechs and Financial Inclusion.” This paper is a companion piece that takes a closer look at each of the fintechs in the study. To frame the research, the 18 fintechs were grouped into five different areas innovation areas: • Interactive customer engagement; • Smartphone-based payments; • Connections-based finance ; • Location-based smallholder finance; and • De-risking unproductive expenses.