Unlocking potential: how financial inclusion can create a better tomorrow

Small business owners have endured numerous setbacks to their financial well-being in recent years — from pandemic lockdowns and labour challenges to economic volatility and rising prices. However, digital financial inclusion is increasingly creating opportunities for individuals all around the globe through availability and access to financial services. 

According to the Global Findex 2021 database, from 2017 to 2021, the average rate of account ownership in developing economies increased from 63 per cent to 71 per cent, largely thanks to the adoption of technology such as mobile money. This is an inherently positive shift. When financial access like this is inclusive, it allows people to better manage money and time, grow businesses and build wealth, and plan for their futures. 

The positive effects of resources such as technology and support programmes can be revolutionary for communities and the wider economy. This is particularly true of small business owners, for whom digital inclusion can create lifelines.

Access to the financial system is especially critical for female economic empowerment. Mitzie left her home in Jamaica in the early 2000s, leaving her young daughter behind with her mother as she worked to build a better life in New York. Working as a cashier in Lower Manhattan, she survived the 9/11 attacks which prompted her to pursue her passion for hair care and the dream of opening her own business. However, Mitzie found it challenging to get a traditional bank loan.

She was then introduced to Grameen America, a microfinance organisation that provides women entrepreneurs with loans and peer support. They helped Mitzie obtain a small loan to turn a former butcher shop into a salon. Four loans later – and with over $7,000 invested in her business – she has a thriving Harlem-based company, she’s brought her daughter into the business, and she plans to expand her product line further. 

“The women at Grameen America encourage me to be a better entrepreneur,” Mitzie explains. “We talk about networking, setting goals and we help each other build our businesses.”

Like Mitzie, many women across the world must overcome extra hurdles to financial inclusion. They face bias and gender norms that hinder their ability to access information and networks, jobs and assets. While between eight and 10 million SMEs across the developing world have at least one female owner, they are still outnumbered three to one by male-owned businesses. This is why programmes built around the specific needs of women are crucial.

CARE’s Ignite Program is one such gender-focussed programme, and it proved to be a salvation for Vietnam-based Thao when the storefront floristry business she opened in 2018 was hit hard by the pandemic. She didn’t have the funds to make the pivot needed to survive. Through CARE’s Ignite Program – a partnership with the Mastercard Center for Inclusive Growth – Thao was able to obtain affordable financing through the programme’s access to essential digital tools and training, which helped her expand her business to online sales.

As of 2022, her business is secure, and she has employed six people. “Digital skills are very important because they help me reach my target customers and capture their needs,” says Thao. “I can also promote the product and learn about the needs and information of the market in the most efficient way.”

As Thao’s experience proves, providing access to the right financial tools enables different communities to unlock potential and build resilience. This is certainly true of Fernando, who has built – and rebuilt – his business on this foundation of inclusive financial services. When the pandemic shut down his Bolivia-based bookstore, he turned it into an opportunity to diversify his business and serve rural customers who couldn’t physically travel to his store.

Fernando achieved this with an easy-to-use mobile banking solution from BancoSol. The microfinance bank, which serves more than 1 million people across Bolivia, has built its capacity to service business owners like Fernando with accessible financial tools thanks to support from a partnership with Accion and Mastercard.

“I’m using the technology that BancoSol offers me because it saves me time,” says Fernando. “I no longer have to go into a branch to pay off a loan. I don't have to go there to make a withdrawal or tell the customer to go there to make a payment for a service. So that helps me a lot. We optimise resources, we optimise time.” 

Financial inclusion doesn’t just mean having a bank account. It goes much deeper. Inclusive finance enables security and opportunity, which can create a more resilient, prosperous and sustainable future for all. 

Hero image photo of Mitzie by Vera Rubtsova