Growth & Jobs | Use smartphones to educate clients about financial system – consultant

Microfinance institutions (MFIs) in the Caribbean are being urged to educate their clients about financial products and becoming more included in the financial system through the use of smartphones.

Angel Bisamaza, associate consultant at the Amarante Group, a Dubai-based firm specialising in digital financial services, financial inclusion, and other banking services, said that there are more than 400 million smartphone users in Latin America and the Caribbean. She said that this represents some 62 per cent of cell phone users in the region.

Bisamaza also explained that the number was expected to increase to 78 per cent by 2025. She said that MFIs should use this as an opportunity to educate their members about how their smartphones can help them to become financially literate.

Serving the forgotten

“MFIs are serving people who used to be forgotten. All of those persons who never thought they could use the financial systempreviously are now seeing the possibilities with the advent of digital financial services,” she said.

“Globally, with 58 per cent of persons addicted to their smartphones, this represents an opportunity for MFIs to educate their clients about products and services such as savings, pensions, investments, and other products. It is possible in this region, where smartphones are popular, in comparison to Africa,” she added.

Bisamaza was the main presenter at a two-day workshop sponsored by the Caribbean Micro Finance Alliance (CMFA), in partnership with the Development Bank of Jamaica, Amarante Consulting, and the Social Performance Task Force (SPTF).

Participants in the workshop, which was held at the Courtleigh Hotel recently, were from Jamaica, Grenada, Montserrat, and Suriname.

Citing the advent of mobile money and the impact it has had in bringing tea farmers into the formal financial system in Rwanda and Cote d’ Ivoire, Bisamaza noted that although the service was offered by a telecom company, farmers were given the option to save via their mobile phones.

The Rwandan consultant said that cooperative banks, which operated similar to MFIs, were opened in communities, in partnership with telecoms and non-governmental organisations, to encourage payments via mobile devices as opposed to being made in cash.

“Some farmers do not have mobile phones; therefore, they were given the device and allowed to make payments over a period of time. Also, the trader would give farmers advanced money on their devices. The farmers’ cooperative took some of the money, and the farmers would be given the option to keep some of the money on their mobile phones as a form of savings,” she explained

“In that system, farmers were educated about saving without it being called that. A farmer was able to check his balance on the device and be able to take advantage of other services. This was also done with the assistance of the cooperatives, which function as MFIs in Africa. Under this system, MFIs, through partnership with the telecoms, were able to educate farmers about financial products via their phones,” she added, pointing out that in some cases, transaction fees were waived to encourage farmers to use the services.

Gillian Hyde, director, CMFA and general manager, JN Small Business Loans (JNSBL), said that MFIs have been working to educate their members about financial products and services.

Over the years, the CMFA has encouraged members to take advantage of the various products and services within the financial system.

Opportunity

“The advent of financial technology represents an opportunity for us to get even more clients to save, make investments, purchase insurance, and contribute to a legitimate pension scheme. We continue to work towards building our clients financially and will pursue various avenues to ensure that our products and services continue to benefit them,” she said.

Bisamaza said that using smartphones as a means of educating clients will not fulfil its potential until more persons become part of the financial system.

“Technology has given us convenience and has helped us to be more efficient. However, we need to get as many persons in the financial system as possible to embrace it.

Worldwide, there are two billion people who are totally unbanked. The mobile phone is the way to reach those persons. Therefore, we need to push to get more people included, which will help them to appreciate the value of saving,” she said.