The Impact of Technology on Financial Inclusion

In much of the world, digital financial tools are a daily reality—used to process paychecks, pay for dinner, buy groceries, and more. But 1.4 billion adults in low- and middle-income countries still lack access to these tools.    This isn’t just an inconvenience for them; it's a barrier to economic growth and empowerment. According to a 2023 UN analysis, digital public infrastructure—including digital ID, payments, and data exchange—could accelerate GDP growth in these countries by 20 to 33 percent.    That’s where Mojaloop Foundation comes in: Their open-source software makes it possible for countries to build inclusive digital payment systems that allow anyone with a mobile phone to send and receive money securely, instantly, and affordably. This has the potential to drive economic inclusion—and open the doors to financial freedom—for billions.

India just did something that should have taken 47 years in 9 years. 561.6 million people gained bank accounts through Jan Dhan Yojana since 2014. That’s nearly 1.5 times the entire US population brought into the financial mainstream. Most countries take half a century to do this. Anil Padmanabhan something that stopped me cold. Here’s what makes this unprecedented: ↳ Stats that demand attention: • Gender gap in account ownership: 17% → 6% in just 6 years • Education divide collapsed from 29% → 10%• Rich-poor banking gap narrowed from 14% → 5% • ₹38.49 trillion transferred directly to citizens via JAM trinity • 116 million retail investors on NSE, 72% from tier-II/III towns ↳ Three insights reshaping financial inclusion: 1/ From access to empowerment The real challenge isn’t opening accounts—it’s transforming savers into investors. 561 million people now have economic identity, but only 4.2% are truly financially literate. Infrastructure creates leapfrogging 2/ JAM trinity (Jan Dhan + Aadhaar + Mobile) became economic GPS. It saved ₹3 trillion by eliminating middlemen while restoring trust in government welfare. 3/ Inclusion without literacy creates vulnerability India’s retail investing boom is exciting but dangerous. Millions entering markets without capacity to navigate volatility. Financial inclusion 2.0 must prioritize education. ↳ my take after 20 years in this industry What India achieved defies every textbook on financial inclusion. As Anil notes, countries typically need per capita income to rise from $5,000 to $20,000 over 47 years to reach this scale. India did it with incomes rising only from $1,500 to $2,700. The secret wasn’t just tech—it was reimagining the social contract. JAM how 500+ million people relate to the formal economy. But here’s the catch: access without financial literacy is like giving someone car keys without driving lessons. But the story everyone’s celebrating has a massive blind spot. That’s why my co-authors Ayush Tripathi and Soham Jagtap and I wrote “Ushering into the New Era of Financial Inclusion: Enabling Women and Women-Led Organisations.” last year ↳ What our research revealed: • Women make up only 32.8% of India’s workforce vs 47% globally • Despite being nearly half the population, women contribute just 17% to GDP compared to 37% worldwide •Women receive credit equal to just 27% of their deposits, while men get 52% • Only 10% of women are borrowers compared to 15% of men The infrastructure is built. Now comes the harder part—ensuring these accounts become instruments of wealth creation, not just welfare delivery; the women become employment drivers and borrowers not just subsidy recipients. Which other emerging markets do you see balancing rapid financial inclusion with financial literacy? What lessons can others learn from India? (link to the articles in the comments)

🚀 How Instant Interoperable Payment Systems (IIPS) Are Quietly Transforming Modern Economies We often talk about faster payments. But what if the real story is structural economic change? This research brief from IPA shines a spotlight on the ripple effects of IIPS like 🇮🇳 UPI and 🇧🇷 Pix. 📌 It’s not just about speed. It’s about inclusion, innovation, and impact. Here’s what stood out for me: ✅ Financial inclusion at scale — IIPS reduce entry barriers and bring the unbanked into the formal economy. ✅ Cost-efficiency — Dramatically lower transaction costs for both individuals and MSMEs. ✅ Digital trust layer — Every transaction creates verifiable digital history—essential for credit scoring and access to finance. ✅ Open innovation — APIs + interoperability = level playing field for fintechs, not just big banks. ✅ Ecosystem shift — IIPS support credit, insurance, savings, and remittance use cases in underserved areas. ✅ Better policy tools — Real-time data flows give governments better visibility for targeted transfers and economic interventions. And yet… 🚧 The real unlock happens when policy and tech move in sync: - Mandatory participation from FIs - Digital identity infrastructure - Pro-competition design - Open banking alignment 🌐 As we design the next phase of payment systems—across Africa, Asia, and Latin America—IIPS could be the public infrastructure of the digital economy. 💭 If you're in fintech, digital public infrastructure, or financial inclusion—this is one paper you don’t want to miss. 📎 I’ll drop a link in the comments. #payments #banking #instantpayments

“Ten years ago, a Mumbai street vendor couldn’t open a bank account. Today, he accepts instant digital payments from anyone in the country — for free.” — Emmanuel Macron, President of France Let that sink in. In just a decade, India has transformed from limited financial access to becoming one of the world’s most advanced digital payment ecosystems. What changed? 🔹 Financial inclusion at scale 🔹 Digital public infrastructure (Aadhaar, Jan Dhan, UPI) 🔹 Mobile-first adoption 🔹 Low-cost, interoperable systems Today, even the smallest street vendor can: • Receive instant payments • Eliminate cash dependency • Access formal credit • Build transaction history • Participate in the formal economy This isn’t just about fintech. It’s about economic empowerment. When technology becomes inclusive infrastructure—not just a product—it changes lives at the grassroots level. The real innovation? Making it accessible, free, and scalable for 1.4 billion people. India’s digital payment revolution is proof that public-private collaboration can drive systemic change. The question now is: 👉 Which country will build the next breakthrough in inclusive digital infrastructure? #DigitalTransformation #FinancialInclusion #UPI #Fintech #Innovation #DigitalIndia

Across South Africa, AI is reshaping how financial institutions assess risk, approve credit, detect fraud, and make decisions. According to the joint FSCA and Prudential Authority report, 52% of banks and 50% of payment providers are already using AI, making financial services one of the country’s fastest AI adopters. The opportunity is enormous. AI has the potential to help us serve people who have historically been excluded from the formal financial system, especially informal traders, township entrepreneurs, first-time borrowers, and young people with limited credit histories. More than 16 million South Africans remain outside the formal credit system, while over 1.4 million credit-invisible consumers enter the credit market every year. That is precisely where technology can become a bridge - but it can also become a barrier. If AI models are trained on historical patterns of exclusion, they can reproduce those same inequalities at scale. An algorithm can decline a person without anyone asking a deeper question: Does this person lack creditworthiness, or do they simply lack a traditional financial footprint? Those are not the same thing. Financial inclusion goes beyond just giving everyone access to a bank account. It's when people can access fair opportunities to participate, build, borrow, grow, and recover. This places a responsibility on all of us in fintech to build fairer systems that understand informal economies, recognise alternative signals of trust and reliability, and expand opportunity rather than narrowing it. At Lesaka Technologies Inc., we see every day how much economic activity exists beyond traditional financial datasets. The spaza shop owner. The township merchant. The social grant beneficiary. The entrepreneur who operates almost entirely in cash. These are not invisible people. They are operating in parts of the economy that many systems still struggle to understand. AI in finance should be about strengthening our ability to recognise human potential more fairly. Tech is at its best when it widens the circle - not when it decides who gets left outside it.

Around the world, billions still lack access to affordable, reliable financial services—often because markets are dominated by a few large banks that set high prices and limit innovation. But change is possible. South Africa’s experience, where a digital startup disrupted entrenched giants and brought four million underserved people into the financial system within two years, offers a powerful example: when competition is encouraged, inclusion follows. Evidence from countries like Brazil, India, and Colombia shows that opening financial markets leads to better services, lower costs, and expanded access—especially for low-income individuals and small businesses. Fintechs and digital tools have further accelerated these gains. Yet many markets remain severely concentrated, limiting progress in financial inclusion and reinforcing inequality. Financial regulators hold the key. By making smart, forward-looking decisions about who can enter the market, how data flows, and what infrastructure is available to whom, authorities can create vibrant, inclusive finance ecosystems. Evidence is clear: healthy competition isn’t a risk—it’s a powerful tool for building inclusive, resilient economies. It’s time for financial policymakers to put responsible competition at the center of financial regulation to unlock opportunities for the billions still excluded from formal finance. Read more at: https://lnkd.in/drG5VUnu by CGAP's Sai Krishna Kumaraswamy and Marcel Beer Kremnitzer

For years, millions of women in rural communities have been locked out of formal finance simply because they lacked paperwork, credit history, or access to traditional banking systems. Now, that is starting to change. The Mann Deshi Foundation and Algorand Foundation are using blockchain technology to create verified digital identities and alternative credit scores for women entrepreneurs in India. Instead of carrying paper files for months during loan applications, women can now access secure digital records through a smartphone-based wallet. This is bigger than crypto hype. It is about financial inclusion at scale. When someone gains access to credit for the first time, they gain access to opportunity. A loan can mean a new business, stable income, education for children, or long-term independence. Blockchain is often discussed in terms of speculation, but this is what real-world utility actually looks like. Technology is solving a structural problem that traditional systems failed to fix for decades. The future of finance will belong to systems that are accessible, portable, and built for everyone, not just people already inside the system. What do you think? Could blockchain become one of the biggest tools for financial inclusion globally? ✍️ #blockchain #financialinclusion #web3 #womeninbusiness

When I first entered the blockchain space, I was drawn by a simple but powerful question: Could this technology eliminate barriers that keep billions economically disenfranchised? Today, I'm seeing that question answered with increasingly sophisticated use cases that make financial inclusion frameworks truly actionable. Three innovations stand out: 1. 𝗗𝗲𝗰𝗲𝗻𝘁𝗿𝗮𝗹𝗶𝘇𝗲𝗱 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 (𝗗𝗲𝗙𝗶) is revolutionizing access. By creating permissionless financial products accessible to anyone with an internet connection, DeFi removes gatekeepers who have traditionally determined who gets served. No more arbitrary minimums or geographic restrictions. Just open protocols that work the same for everyone. 2. 𝗚𝗮𝗺𝗲𝗙𝗶 is transforming financial education. By rewarding participation in gamified educational platforms, these systems make learning about finance engaging rather than intimidating. They create positive feedback loops that build both knowledge and assets simultaneously. 3. 𝗗𝗲𝗰𝗲𝗻𝘁𝗿𝗮𝗹𝗶𝘇𝗲𝗱 𝗜𝗱𝗲𝗻𝘁𝗶𝗳𝗶𝗲𝗿𝘀 (𝗗𝗜𝗗𝘀) are redefining reputation. With DIDs, users own their digital identity, making their reputation portable and borderless. Credit scores, educational credentials, and financial history become assets that users control and can leverage across systems. — These aren't theoretical concepts. They're working solutions that are being implemented today. What excites me most is the shift from theoretical frameworks to practical applications. For years, we've understood what financial inclusion should look like. Today, blockchain is providing the tools to make it a reality. The beauty of Web3 is its ability to translate complex financial inclusion frameworks into real-world solutions. The technology exists. Now, it's about ACTION.

Did you know that nearly 2 billion adults worldwide lack access to basic financial services? This startling fact highlights a major problem in emerging markets. Many potential borrowers in these markets lack formal credit histories, making it difficult for lenders to assess creditworthiness. Without access to loans, people in emerging markets struggle to grow businesses, afford education, and purchase homes. The lack of financial inclusion prevents economic mobility. Fortunately, AI and alternative data are transforming credit scoring in emerging markets. By analyzing mobile phone usage, e-commerce transactions, and other digital footprints, AI algorithms can effectively evaluate credit risk without traditional credit reports. For example, the company Cignifi is using AI to score borrowers in markets like Mexico, Brazil, and Indonesia. They've helped expand access to credit while keeping default rates low. The implications are profound. AI credit scoring unlocks loans for unbanked populations, fueling growth and opportunity. The tech can promote financial inclusion and economic development worldwide. AI is reshaping finance in emerging markets and creating new opportunities for lenders and borrowers alike. Learn more: https://lnkd.in/efzrpeCe #banking #partnerships #ai #fintech