Middle East’s underbanked need to get on to mobile money services

Mobile-based money services are inherently designed with the primary goal of addressing financial inclusion challenges.

By acknowledging the existence of populations who have been systematically excluded from traditional financial systems, these services aim to democratize financial access. This is achieved by introducing financial services at accessible price points and designing platforms tailored to the needs of the underserved.

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Such inclusivity ensures that financial services become available to those who previously could not afford or access them, effectively bringing a significant segment of the population into the mobile money ecosystem. The integration allows for the distribution of various financial services to the underbanked, thereby enabling them to transact seamlessly with the broader economy.

Mobile money platforms serve as pivotal intermediaries, providing essential services like micro-lending and facilitating everyday financial transactions, from paying bills to covering medical expenses. By recording these e-transactions, individuals and small businesses previously without financial records can now establish a credit history, enhancing their economic visibility.

A true growth accelerator

This transformation not only empowers individuals by enabling savings and safe money storage but also opens up avenues for financial service providers to offer targeted solutions. Ultimately, mobile money services catalyse the inclusion of a vast economy previously outside the financial system, ushering a majority population into an ecosystem where they can actively participate from distributed financial products and services.

The inclusion of the underbanked population through mobile money and financial services holds significant potential for spurring economic growth in the Middle East. Once afforded access, this demographic becomes a key driver of economic activity, contributing to the diversification and dynamism of the regional economy.

The entry of the underbanked into the financial ecosystem enables the establishment and scaling of small businesses, fostering entrepreneurship and innovation. These businesses contribute to job creation, stimulate local economies, and increase the demand for more financial products and services.

As individuals and businesses engage with the financial system, accumulating financial records and establishing credit histories, they become visible to a broader spectrum of financial institutions. This visibility attracts investment, enhances financial literacy, and fosters a culture of savings and investment among a population segment previously constrained by limited financial options.

Bring in higher financial security

The active participation of the underbanked hence catalyses a virtuous cycle of economic empowerment, leading to increased consumer spending, higher levels of financial security, and ultimately, substantial contributions to the economic resilience and growth of the Middle East.

The primary barriers thwarting access to traditional financial services for the underbanked include a lack of understanding of market needs from a practical standpoint, language barriers, and the prevalent use of cash.

These challenges necessitate a strategic approach that begins with a deep, on-the-ground understanding of the specific needs and obstacles faced by the underbanked. Innovative financial technologies can address these barriers by deploying teams dedicated to comprehending the unique circumstances of the underbanked, thereby facilitating the development of relevant products and services.

Simplifying user interfaces to mitigate the intimidation factor associated with new technology adoption can significantly enhance access. The transition from cash reliance to digital financial platforms can be smoothed by introducing solutions like Whizmo that create a wide network of distribution where customers can easily convert cash into digital money, eliminating the challenges associated with access.

The strategy involves collaborating with established businesses to facilitate easy cash-in and cash-out operations. Such an inclusive approach, supported by a network of partners for widespread service accessibility, promises to dismantle the traditional barriers, fostering greater financial inclusion.

SOURCE: GULFNEWS / Eric Karobia / CEO of Whizmo