Financial services are now widely available right in the palm of users’ hands thanks to fintech innovations that take advantage of how commonplace mobile phones are. Concerns about costs that traditional financial service providers encounter are frequently the root of the problem of financial exclusion.
It’s important to acknowledge that although it’s a popular belief that underprivileged groups may find it difficult to receive services, providers may also find it difficult to supply reasonably priced alternatives. Any business that wants to be profitable must prioritize profitability. Exclusion happens when the expense of providing additional services exceeds the possible profit. Because of this conundrum, suppliers discover that serving specific demographics is not economically feasible. As the cornerstone, affordability is crucial since exclusion results from services that cannot be provided profitably.
Businesses choose not to cater to these groups, which keeps the cycle of exclusion going. For effective financial exclusion prevention, it is therefore critical to address providers’ affordability issue. Mobile money providers have expanded the availability of financial services to previously unreachable populations by using mobile phones as the principal channel for financial transactions. Through this change, people living in rural locations can now easily and economically access mobile money, avoiding the constraints imposed by traditional banking infrastructure. Thus, by empowering marginalized populations and promoting economic progress, mobile money has turned into a catalyst for financial inclusion.
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