There are millions of people in Africa that does not have bank accounts or life insurances. These services could be the difference between surviving and thriving.
We all agree that there are a number of factors/barriers to poor people that makes it hard for them to become financially included.
Here are a number of barriers:
– the lack of financial understanding.
– the lack of understanding between the consumer and provider.
– age discrimination
– gender discrimination
– the income rate in households
– lack of products that cater for the poor in the financial sector.
– the geographic distances
– higher transaction costs.
These barriers are in fact self-perpetuating. Summarizing these facts. Poor people are considered unviable clients for the the formal financial sector. That’s why we see that most banking products and services are not designed for the poor but for the middle and high income population.
Therefore banks have become more focused on higher income class than the remote locations which has slower income rate. Resulting in the geographic barrier that occurs today.
By Lauren Leonard