Financial inclusion is becoming a priority for policymakers, regulators and development agencies globally, and with good reason. It has been identified as a key enabler for 7 of the 17 Sustainable Development Goals and for the reduction of extreme poverty. As such, it makes a significant contribution to improving the lives of individuals and the performance of businesses, especially in developing and emerging countries, by providing them with the means to plan, save, invest and transact easily, securely…and digitally. So much so that the G20 committed to advancing financial inclusion worldwide and to implementing the G20 High-Level Principles for Digital Financial Inclusion. Furthermore, the World Bank has set itself the ambitious goal to reach Universal Financial Access (UFA) by 2020.
However, despite the attention it is currently receiving, financial inclusion still has to overcome a number of challenges. For a start, an estimated 2 billion adults worldwide do not have a bank account, of which 59% provide reasons such as the lack of funds – which indicates that formal financial services are not yet affordable to all –, or their remote location. Other challenges include inequalities between the genders (59% of men reported having a bank account in 2014, but only 50% of women did) and between formal and informal businesses, as well as the pressing issue of forcibly displaced populations, with 80% of the involved adults finding themselves outside of the formal financial system. Digital financial technology, or “fintech”, and particularly the availability of Mobile Money services, enabled by the increase in Smartphone penetration in emerging and developing countries, has considerably improved the access to financial services in these regions of the world. However, that is not where the potential of Mobile Money ends. The provision of credit lending against Mobile Money platforms has been identified as an effective way to financially empower unbanked or low-income populations and therefore to drive economic growth in a given country.
For Direct Credit Management (DCM), a micro-lending company and a subsidiary of the leading telecom governance technology provider Global Voice Group (GVG), offering these populations the opportunity to become credit-worthy and to access much-needed funds is “the industrial revolution of the 21st century”.
DCM’s aim is to widen access to credit and ensure responsible credit lending through a nanocredit platform that leverages Mobile Money, with the ultimate goal of stimulating economic growth and promoting financial inclusion in developing and emerging countries. The company’s Mobile Money lending strategy relies on two complementary digital platforms, GVG’s Data Acquisition Platform, which was installed in several African countries, including Tanzania and Rwanda, and Tiaxa’s Nanocredit Digital Profiling Platform. The transaction data yielded by the M3 solution is used to inform Tiaxa’s platform to create viable credit scoring, with a view to offering responsible nanocredit facilities.
Pierre Liautaud, CEO of DCM, tells us about his experience at the helm of this revolutionary financial service provider:
- Mr. Liautaud, how would you summarize what you do?
Pierre Liautaud: I am the CEO of Direct Credit Management, which is Global Voice Group’s new nanocredit division. As the CEO, I am responsible for making the major corporate decision and for managing the overall operations and resources of the company. I am both proud and grateful to be able to help the unbanked access the funds they need in order to guarantee their personal economic growth.
- How does your job help GVG succeed?
Pierre Liautaud: Direct Credit Management is GVG’s first diversification into the fintech field. It leverages our Data Acquisition Platforms using Big Data to provide essential tools to governments. The company is currently working to create the first Digital Credit Profile system to drive financial inclusion in Rwanda, by using RURA’s Data Acquisition System.