FRAMEWORK : Social Enterprise

Fintech Needs More Than Tech to Serve Worldwide Unbanked

With a current world population of over 7.5 billion, more than 2 billion people go without banking services.

In “Fintech Companies Could Give Billions of People More Banking Options,” Jake Kendall, Director of Digital Financial Services Innovation Lab, discusses the challenges that financial technology (fintech) companies face in the developing world.

Challenges are immense and progress slow. Kendall explains while fintech’s “innovative products have been a boon to consumers in mature economies, the resulting efficiency and security benefits have largely bypassed the 2 billion consumers in the developing world who lack formal banking services altogether.”

Today, Kendall believes there are “signs this is changing,” and examines three major challenges that fintech companies must overcome:

  • Lack of infrastructure and efficient cloud services
  • Users who don’t have a digital footprint
  • Consumers who lead chaotic and cash-based lives

From the examples Kendall cites, SERV’D is addressing these challenges most comprehensively. In India, SERV’D provides an app that “helps households and the informal workers they employ create simple formal work contracts and pay them online.” The data capture from this service – wages and other payments – could enable more than 400 million informal workers in India to demonstrate their financial history and lead them to financial inclusion in banking products and services.

Yet the biggest challenge to the underbanked and unbanked in developing countries may be overlooked. Of the four core capabilities demanded in successful banking applications – data, analytics, talent and technology – the domain expertise of banking talent seems to be lacking emphasis in fintech. Bringing financial services to more than 2 billion unbanked people worldwide will take more than a technology play: talented people with banking and data analytics expertise need to also play key roles.

If Fintech can combine banking’s core set of capabilities with the creativity, innovation, lack of traditional constraints, and disruption it’s known for, then progress in financial inclusion and economic development in developing countries can find traction in improving lives all over the world!

FRAMEWORK : Social Enterprise

SHORT TAKE: A Beautiful Learning Curve

In “It takes a village to raise a child, but tech giants could play a role in educating one,” Fiona Smith recounts the story of Clary Castrission, chief executive of the social enterprise 40K Group, meeting with the most well-funded philanthropists on the planet – the Bill & Melissa Gates Foundation and the Chan Zuckerberg Initiative.

Castrission made the rounds telling about the 40K Group and his new 40K Plus project – an eleven-year journey in transforming a charity to a sustainable social enterprise with the goal of bringing English language education to 8 million children in India.

Eleven Years of Learning

As a 23-year-old, Castrission named his organization the 40K Group because he originally thought that was the amount of money he needed to build a school for 200 children. Funded through donations, the school ended up costing $400,000.

At that rate, to educate 8 million children he would need over $20 billion! Changing direction, he left the school-building model and formed the 40K Plus program…

  • to teach English only
  • in after-hours classes
  • in pods
  • with Lenovo tablets
  • for fees
  • to paying student-customers

The 40K Plus project now teaches 1,100 students in 20 pods in 20 villages, all with families as paying customers rather than beneficiaries.

In 2012, Castrission also launched 40K Globe “a business that has taken some 1,500 fee-paying Australian university students to India to assist as volunteers.” Now, 40K Group is starting to pay for itself and will be opening operations for 1,000 students in Cambodia.

Castrission follows a beautiful learning curve – passion, commitment, failure, self-awareness, change, understanding, more change, reinvention. And, again, it took 11 years of learning.

Today, Castrission takes hope from the Chan Zuckerberg Initiative being “interested in the project’s development, particularly once he had 10,000 students on the platform.”

Just a little more learning – and that’s within reach.