Visa and GSMA Team to Boost Financial Inclusion

Visa has teamed with the GSMA Mobile for Development Foundation to improve financial inclusion.

The newly announced Digital Finance for All (DFA) Initiative is aimed at helping 20 million people in low- and middle-income countries in Africa, Asia and Latin America, including women, small-holder farmers (SHFs), and nano, micro and small enterprise (NMSE) owners, Visa said Monday (Feb. 26).

“While digital payments use by adults in low- and middle-income countries is up 66% from 2014, women, SHFs, NMSE owners and globally displaced individuals continue to face barriers accessing the digital economy,” the company said in a news release.

“Women in low- and middle-income countries are 20% less likely than men to hold a formal financial account and more than 30% of the world’s food is produced by SHFs yet most have limited or no access to formal financial services like credit, loans, savings, or insurance,” Visa said.

According to the release, the DFA is designed to provide greater financial literacy, develop research focused on financial inclusion, and digitize SHFs and NMSEs to support their adoption of digital financial services to help them thrive.

“Mobile money can play a transformative role in advancing financial inclusion and resilience for the nearly 2 billion people who remain unbanked globally,” said Ashley Olson Onyango, Head of Financial Inclusion and AgriTech, GSMA. “However, poor digital and financial literacy is a key barrier to accessing digital financial services, especially for certain population segments like women, farmers and micro-merchants.”

As PYMNTS wrote last month, financial inclusion has been one of the byproducts of the great digital shift, particularly in emerging markets.

For example Mario Shiliashki, CEO of PayU Global Payments, told PYMNTS CEO Karen Webster in an interview that Latin America offers a major opportunity for financial inclusion for smaller firms.

“More than 60% of these 5 million small businesses in Colombia have inadequate or no real access to financial services,” Shiliashki said.

In providing financial services to SMBs, he said, PayU can help client firms manage their businesses more seamlessly, and gain access to capital.

Meanwhile, the lure of modernized banking services and a wider net across which to offer those services is not lost among companies in the U.S. Joint research by PYMNTS Intelligence and NCR found that 75% of small- to medium-sized businesses (SMBs) experiencing financial stress are the most likely to use a digital-only bank as their main financial institution.