The lag in financial inclusion in Emerging and Frontier Markets has been well documented. World Bank data from 2017 shows that 31% of the global population remained unbanked. This weighs most heavily on developing nations where 58% are excluded from the formal banking network. However, the last decade has seen financial inclusion rates for individuals improving. 

This has coincided with an increase in the number of individuals making electronic transactions. This gives a clue to the shift in levers of financial inclusion: Where mainstream banks have not met the needs of large segments of the population, innovation and technology have stepped in. 

Banks have been unwilling to take the higher credit risk and higher cost of accessing these customers. Disruptive businesses in tech or telcos have used mobile technology to drive more innovative client acquisition and product offerings, targeting this harder to reach segment with fewer issues around “trust” of financial institutions.

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