If we visit a typical rural village in a developing country, we encounter these challenges to a bridging of the so-called Digital Divide:
- In most rural villages there is inadequate infrastructure to support tech. In many villages, there is limited or no electricity, which makes powering phones or towers difficult. Many villages have no signal to support mobile telephony. In places that do have a signal, it is typically 2G and thus does not support most fintech services, which require 3G or above to function properly.
- Among poor households, there are few smartphones, and even the feature phones are owned by the men. This leaves women with limited or no access. In addition, they also typically have hopelessly short battery life, screens that shatter easily, and a persistent problem with ‘fat finger error’ that makes them almost unusable. Furthermore, the cost of data needed to make fintech transactions is usually prohibitively expensive.
- Most villagers are “oral”. They – along with another 1 billion-plus people across the planet – cannot read, write, or understand the long number strings necessary to transact on mobile phones.
- Providers have made little effort to tailor interfaces or use-cases for the low-income market. The vast majority of fintech providers develop solutions for the affluent and middle classes. This makes logical sense – these segments have the money (and connectivity) to use the solutions.
- Furthermore, villagers value personal relationships – particularly when it comes to money. The idea of trusting technology that they do not understand for anything except very basic payments is out of the question.
- The regulatory environment and consumer protection provisions remain too weak to secure the poor. Many have already lost money in basic money transfer transactions. Millions are negatively listed on credit bureaus and in the databases of large banks because of digital credit.
Until we address these six fundamental barriers to the deployment and use of fintech by the poor, it will indeed remain irrelevant to them. In fact, we risk exacerbating the digital divide and leaving the poor and vulnerable behind.