Challenges in the supply-side are a key reason for the financial exclusion of low- and moderate-income (LMI) communities, which form a large part of the 1.7 billion people who remain unbanked worldwide. Traditional banking and financial services tend to focus more on high-value, low-volume transactions by high net-worth customers and are highly capital- and labour-intensive.
Technology such as fintech presents an opportunity to remedy this situation, especially for the LMI customer segment. Fintech promises to deliver solutions through the pathway of digital distribution, which would reduce the cost of delivering financial services to the mass-market significantly. It can increase the accessibility of these financial services while disrupting traditional delivery approaches.
MicroSave conducted a study to understand the role of such technology in terms of financial inclusion for potential providers and users. The study intends to create an updated overview on enabling fintechs that offer disruptive and innovative solutions, including start-ups, mobile financial services providers, and IT solution or platform providers.
The study is based on extensive secondary research and stakeholder interviews with fintechs and FSPs across six markets – Bangladesh, China, Malaysia, Myanmar, Nepal, and Vietnam. It helped identify the key challenges in financial inclusion that have a direct potential for technology disruption in each market. The study also assessed the market readiness in supply and adoption of technology solutions. Stakeholder interviews helped us to validate the findings and to understand the specific challenges that fintechs and FSPs face in addressing the target segments. The study is supported by the MetLife Foundation.