From the World Bank desk, financial inclusion is increasing. Global Findex database as at 2017, revealed that 1.2 billion adults have at least an account beginning from 2011 plus 515 million people since 2014. Furthermore, between 2014 and 2017 which the report was published, the population of global adults having an account with financial institution increased by 7% (from 62%-69%).
Breaking this down, developing countries had increase by 9% (from 54% to 63%). The next edition of this report would be published in 2020. We can only hope for more positive reports in digital finance. In terms of necessity, digital intervention and new innovative technologies provide enormous potential for us to overcome development challenges and threats to our world. Although countries such as America, china and Russia are on the competitive edge – constantly coming out with new technologies and incorporating finance digitalization in those technologies. There is almost no application you would want to use that doesn’t have a room for either updating or improving for better service offering. These updates and improvements mostly requires payment. That is why you have your google Play Store where you can make purchases for application and other software.
The World Band Group has proposed its mission to achieve as a global access to financial services by the year 2020. While this is a great move, several countries have been putting up a series technologies to ensure that virtually everyone in the world has access to finance in every possible way. This is coupled with the fact that, the opportunities provided when we digitalize finance, goes far beyond simple financial service procurement such as just being able to transfer and receive monies. As said by Jin-Yong Cai, the CEO of International Finance Corporation, digital finance is a powerful tool and machinery for job opportunities. Countries like America have been maximizing this opportunity for a while. But for developing economies, digital finance can be a serious weapon to curb unemployment.
Around the globe, billions of people use mobile money and as digital money is made available to millions of poor individuals, the multiplier effects of production value in the country can be enhanced. This is possible in the sense that, when people can use digital money, they would be able to contribute the national development and in the macroeconomics of countries. In addition to this, government can easily and clearly sponsor productive activities or businesses that the people engage into using mobile money (as an example).
For startups, digital finance does not only provide access to funding, but also to e-payment transactions, and secured financial production. Furthermore, it is recognized to be able to help small businesses develop a solid financial history. With the help of digital finance in terms of mobile money, insurance, loans and other securities can be made available. For example, in the case of mobile money, every history of transaction made are stored and that can be used to keep track financial history of any business and to decide eligibility for financial securities.
Fantastically, financial technology has the potential to expand to the most remote areas of the world, making functional impacts, alleviating poverty, rural development and nation building as a whole. With finance technology, lives is made easy and convenient as we can make every banking, prepaid payment, and others at the comfort of our domain.
As said by Thomas Duveau, Mobisol business development lead, digital finance has been a tool in the hands of their Solar Home System customers. People can remain committed to and track their payment plans while they enjoy electricity in their homes. So, installment payment through mobile money for services and goods makes life easy for everyone willing to have anything. Once a payment plan is in place, everything becomes easy.
Although from the World Bank survey report from 2014 to 2017, about 7% increase was recorded. Hopefully, by the year 2020 submit, we would have a tripled increase. To have a result as that, public, international, and private collaboration has be ensured to reduce potential obstacles that may pose as threats towards a successful financial technology.
