Microfinance was long been seen as the silver bullet for poverty alleviation. Over the years, we have learned that it has limitations, but it’s still one of the most powerful tools for financial inclusion. Now, financial technology, or fintech, promises us another revolution, one that could potentially reach millions more through nano-savings and credit delivered through increasingly intuitive and accessible mobile phones. But will the revolution help those at the bottom of the pyramid? Only if we are intentional.
For more than 10 years, Beatrice Normal and her husband supported their family in Carrefour, a poor community near Haiti’s capital of Port-au-Prince, Haiti, by selling books and stationery items. They did it with the help of small loans – a few hundred dollars at a time – from FINCA, which has long offered socially responsible microfinance in Haiti.
The arrangement worked well for Beatrice – except when, at least once a month, she had to take the 23-mile trip to a bank branch to make a payment and consult with her loan officer. Those journeys ate up valuable time that she could have spent running her business, and they exposed her to getting robbed along the way of the cash she’d worked so hard to earn.
This year, FINCA started serving clients using MonCash in Haiti – the first-time microfinance services were offered via mobile in the poorest country in the Western Hemisphere. This will allow Haitians to borrow up to the equivalent of a few hundred dollars and make regular repayments using rapid, fully digital transfers via clients’ mobile wallet accounts on the MonCash platform. Also, Digicel’s local agents carry out face-to-face transactions in communities around the country.
MonCash is life-changing for clients like Beatrice, and it’s a boon to many others in Haiti, a geographically dispersed, rurally settled landscape that presents major physical and logistical limits to internal travel.