Grassroots Financial Inclusion – A familiar story sounding new
Financial inclusion is almost a buzzword everywhere, yet financial exclusion bites those most affected. Here is a story typical of inclusion initiatives amidst exclusion. The Development Initiative for Northern Uganda (DINU), supported by the European Union and led in implementation by CARE Denmark, aimed to enhance credit access through Youth/Village Savings and Loan Associations (Y/VSLAs) in Northern Uganda. A baseline evaluation revealed obvious gaps that most know and few address. Here I juxtapose the key challenges reported with my own simple, almost simplistic brief recommendations. The recommendations are kept simple and obvious to provoke thought – “why hasn’t something on a grand scale been done to address these”?:
- Low representation of women in Y/VSLA leadership, which tilts gender balance away from them –empower them.
- Low/ no financial literacy & business skills correlate with exclusion – train them.
- Financial institutions inadequately appreciate the power of numbers in low-income earners, thus miss significant business opportunity – show them
- Poor loan portfolio management haunts many Y/VSLAs – train them.
- Low digital literacy slows down inclusion in rural areas – train people on it.
- High charges on mobile money discourages its use – waive or reduce taxes.
- English language widely used in mobile money operations – translate to local languages.
- Network-based challenges make digital transactions unreliable – fix data and power availability.
Path Forward
Initiatives like DINU are vital and could play vital roles in financial inclusion of low-income people. These efforts will foster sustainable financial inclusion and empower communities, especially women and girls, in remote rural areas.
DINU did well to commission that study to inform its intervention, and others should emulate. If development organizations and governments can read the challenges beyond their simplicity and obviousness, they could do something to promote more significant financial inclusion.
Dr. Keren Obara.
Digital Marketing Associate.