With the modern conveniences, like grocery delivery and rideshares, that smartphone apps bring, we often take for granted the marvels they really are.
Mobile banking is no exception. For most of us, managing personal finances has never been easier. Instead of visiting a bank teller, we can check balances, pay bills and deposit checks with a finger print. In light of the COVID-19 pandemic, this convenience has become even more of a modern miracle for safely managing finances in the midst of a health and economic crisis. Features such as contactless pay are helping to keep us safe when venturing to the store for essentials.
To us, this technology has become commonplace in our routines. But for people living in remote, low-income or developing areas, it can be difficult to find. Worldwide, 1.7 billion people do not have access to a bank, let alone mobile banking. The inability to obtain financial services is referred to as being unbanked – this can either be because a bank does not exist in their community, or it is unsafe to carry money to and from the bank to make transactions. No matter the reason, being unbanked makes it difficult for people in the developing world to obtain and manage loans, build credit and keep their money safe from theft.
Making money management convenient to as many people as possible is proven to reduce the poverty gap, and even the gender gap by reducing financial exclusion for women. Worldwide, the number of men with access to a bank account exceeds that of women by 200 million. In developing countries, only 59% of women have access to financial institutions or mobile money services, compared to 67% of men.
FINCA International catalyzes economic growth and promotes financial inclusion through microfinance, providing financial services and banking to those who would otherwise be excluded. Now, their work is paying off as we face the unprecedented crisis this pandemic has caused.
Tech solutions for digital and financial growth
Prior to the COVID-19 pandemic, FINCA was helping make global strides using digital technology to empower financial independence and prosperity. Often partnering with fintech firms to expand products and services to the countries they serve, FINCA has been able to offer new and innovative solutions to their clients.
For example, in 2017, FINCA Tanzania launched Africa’s first mobile network savings product in partnership with a mobile network operator. Within the first three months alone, the network reached 100,000 people. A similar program in Pakistan gave women a digital payment solution for the beauty services they offer. For most of the Pakistani women, the digital platform was the first bank account they’ve been able to hold.
Now, as the world faces new challenges due to a global pandemic, FINCA’s advancements in digital technology to increase access to financial institutions is of renewed importance.
Banking inclusion in Haiti
Now more than ever, FINCA’s digital efforts are demonstrating how essential mobile banking is in a world where in-person services are no longer considered safe. In Haiti specifically, FINCA is using technology to reach a majority of their clients that have some kind of internet access, either on a smart phone or computer.
Between 2013 and 2017, the extent of mobile financial services in Haiti’s small villages involved representatives travelling to banking agents. The agents would then process loan payments using a mobile device.
Then, in 2017, FINCA Haiti launched their virtual branch, making in-person visits no longer necessary for most services. In partnership with Haiti’s largest telecom provider, the mobile app development allowed for the 93% of their clients that already owned a mobile phone to start paying loans without having to travel. Launched prior to the pandemic, this virtual banking feature couldn’t have come at a better time.
Now that the Haiti’s mobile bank has been available for a few years and access to technology continues to grow, the virtual branch is being used more than ever due to the coronavirus. Since its implementation, Haitians are now able to apply for loans without having to visit a branch or meet with a credit officer. They are guided through the process 100% virtually, a task that wouldn’t have been possible just a few years ago.
Other regions where mobile banking has seen a dramatic increase due to COVID-19
- In Guatemala, increased mobile connections allowed FINCA to have personalized communications with their clients through a mobile app. Using those connections, FINCA is able to communicate seamlessly with customers using a smart phone app for personal messaging between loan officers, branch managers and customers.
- In Kosova, FINCA saw a 2,000% spike in web chat messages and a 700% increase in messaging apps like Viber and Facebook after the lockdown began in March. Having been put in place prior to the pandemic, these platforms were stable and communications continued uninterrupted at the onset of COVID-19.
- In Pakistan, use of the FINCA’s mobile wallet with contactless payment saw a surge. The mobile wallet has multiple features, but the contactless payment feature specifically allows those clients continue to make transactions while also practicing social distancing.
The coronavirus has been devastating economically, especially in the developing countries that FINCA serves. Looking ahead, experts predict that low-income countries are the most vulnerable to the consequences of this pandemic, and there are still many people in these regions who do not have mobile devices or internet access.
For FINCA, the priority is to serve as many people as possible, thereby ensuring that the devastation is not permanent. The role that virtual communications currently plays has helped soften the hit for these regions, and they will continue to work to reach these people to mitigate the current impact of the pandemic and the potentially long-term effects that we will face in the future.
How you can help
- Give through your workplace. Boost your workplace giving campaign by partnering with FINCA and giving your employees an opportunity to increase financial freedom to those in need around the world. Find out how today.
- Let your voice be heard. Join FINCA in calling on the World Bank to commit to mobile banking as part of the Universal Financial Inclusion 2020 campaign. Sign the petition telling the World Bank President that you agree.
Reach out to us for more information on how to support FINCA’s amazing programs.