May 19, 2020

Fintech: bridging the unbanked and digitally excluded

Mr. Bassim Haidar
4 min
Fintech: bridging the unbanked and digitally excluded

Mr. Bassim Haidar, founder & CEO, Channel VAS, explains how the fintech industry is bridging the gap for the unbanked and digitally excluded in Africa.

Africa’s limited infrastructure, vast isolated areas, overzealous protection of data and the slow-moving traditional banking sector are just some of the challenges that the continent faces when it comes to bringing financial services to those who need them. It is unacceptable that a large portion of the population remains unbanked, as financial inclusion is fundamental to reducing poverty and sparking economic growth. 

According to the World Bank, 1.7 billion adults around the world are unbanked. While many see this as an insurmountable challenge, we at Channel VAS see an incredible opportunity. The same World Bank data reveals that two-thirds of the global unbanked own a mobile phone, which is the most promising path to bringing them financial services. 

The need 

In a sense, Africa is a land of contradictions. In many countries, electricity is considered a “luxury good” while mobile phones are a commodity. Mobile, due to its wide acceptance in Africa, has steadily become a critical tool for financial inclusion, spurring local fintech business. Many Africans will bypass traditional banking altogether and join the formal economy through their mobile phone. In these emerging markets, fintech will work as a bridge between the unbanked and the financial inclusion they deserve.

The path forward

Data science forms the foundation of every modern market innovation, and this is certainly true in the case of fintech. Big data has given providers unprecedented insight into the needs of their customers, powering innovation and better-suited offerings. In the financial sector, for instance, big data has revolutionized credit risk scoring and assessments, allowing fintech players to perform the sort of advanced analysis that was once the exclusive purview of big banks. 


Similarly, advances in artificial intelligence and machine learning are allowing fintech companies to identify patterns in data and make more informed decisions. At Channel VAS, these technologies power our micro- and nano-finance solutions to bring affordable credit to the underbanked. 

However, the most fundamental development in bringing banking to the many is the increasing prevalence of mobile devices. Internet adoption in emerging markets continues at a rapid pace, and according to GSMA, mobile internet connections outnumber fixed-line internet three to one. We need to continue to ensure that smartphones are accessible to all, and market pressures are not enough. We must break the vicious circle that keeps people financially excluded because they cannot afford a smartphone, while the reason that they cannot afford a smartphone is that they are financially excluded. Handset loan projects are a very promising option in this regard, bringing the countless benefits of an internet connection and access to fintech apps to people. Success in this area will inevitably contribute to reducing the number of unbanked as we can expect to see the rise of fintech services parallel the continued spread of mobile devices.

Overcoming barriers

For evidence of the immense potential of fintech, you need only look to several mobile money services that have already launched in different countries. The next phase will involve expanding the range of financial services that are available to these people to include lending and utility payments as fintech companies become increasingly capable and well-established. Experts estimate that fintech will contribute to the ongoing success of Africa’s economies, reaching $150 billion by 2022

However, to see this change, fintech companies will need cooperation and collaboration with national and international regulators, banks, and mobile network operators. Regulators in particular retain a decades-old mentality and unwillingness to change which creates friction with fast-moving fintechs. Traditional financial institutions guard customer data, unwilling to share it safely and responsibly. However, centralizing the data that is currently scattered among financial institutions, insurers, telephone companies, aggregators and payment services will be beneficial to everyone involved. It will allow consumers greater control over which entities can access their data. 

A bright future 

A uniform policy framework is the fastest route to a bright future for the underbanked in Africa. Fintech has already been incredibly successful despite adversity, and we can unlock its true potential to transform people’s lives – bringing credit to small businesses and individuals across the continent and ensuring financial stability for millions – by removing the few barriers which remain. 

For more information on business topics in Africa, please take a look at the latest edition of Business Chief EMEA.

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Jun 11, 2021

G7 Summit guide: What it is and what leaders hope to achieve

3 min
Business Chief delves into what the G7 is and represents and what its 2021 summit hopes to achieve, in terms of sustainability and global trade

Unless you’ve had your head buried in the sand, you’ll have seen the term ‘G7’ plastered all over the Internet this week. We’re going to give you the skinny on exactly what the G7 is and what its purpose on this planet is ─ and whether it’s a good or a bad collaboration. 


Who are the G7?

The Group of Seven, or ‘G7’, may sound like a collective of pirate lords from a certain Disney smash-hit, but in reality, it’s a group of the world’s seven largest “advanced” economies ─ the powerhouses of the world, if you like. 

The merry band comprises:

  • Canada
  • France
  • Germany
  • Italy
  • Japan
  • The United Kingdom
  • The United States

Historically, Russia was a member of the then-called ‘G8’ but found itself excluded after their ever-so-slightly illegal takeover of Crimea back in 2014.


Since 1977, the European Union has also been involved in some capacity with the G7 Summit. The Union is not recognised as an official member, but gradually, as with all Europe-linked affairs, the Union has integrated itself into the conversation and is now included in all political discussions on the annual summit agenda. 


When was the ‘G’ formed?

Back in 1975, when the world was reeling from its very first oil shock and the subsequent financial fallout that came with it, the heads of state and government from six of the leading industrial countries had a face-to-face meeting at the Chateau de Rambouillet to discuss the global economy, its trajectory, and what they could do to address the economic turmoil that reared its ugly head throughout the 70s. 


Why does the G7 exist?

At this very first summit ─ the ‘G6’ summit ─, the leaders adopted a 15-point communiqué, the Declaration of Rambouillet, and agreed to continuously meet once a year moving forward to address the problems of the day, with a rotating Presidency. One year later, Canada was welcomed into the fold, and the ‘G6’ became seven and has remained so ever since ─ Russia’s inclusion and exclusion not counted. 


The group, as previously mentioned, was born in the looming shadow of a financial crisis, but its purpose is more significant than just economics. When leaders from the group meet, they discuss and exchange ideas on a broad range of issues, including injustice around the world, geopolitical matters, security, and sustainability. 


It’s worth noting that, while the G7 may be made up of mighty nations, the bloc is an informal one. So, although it is considered an important annual event, declarations made during the summit are not legally binding. That said, they are still very influential and worth taking note of because it indicates the ambitions and outlines the initiatives of these particularly prominent leading nations. 


Where is the 2021 G7 summit?

This year, the summit will be held in the United Kingdom deep in the southwest of England, with Prime Minister Boris Johnson hosting his contemporaries in the quaint Cornish resort of Carbis Bay near St Ives in Cornwall. 

What will be discussed this year? 

After almost two years of remote communication, this will be the first in-person G7 summit since the novel Coronavirus first took hold of the globe, and Britain wants “leaders to seize the opportunity to build back better from coronavirus, uniting to make the future fairer, greener, and more prosperous.”


The three-day summit, running from Friday to Sunday, will see the seven leaders discussing a whole host of shared challenges, ranging from the pandemic and vaccine development and distribution to the ongoing global fight against climate change through the implementation of sustainable norms and values. 


According to the UK government, the attendees will also be taking a look at “ensuring that people everywhere can benefit from open trade, technological change, and scientific discovery.” 


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