The Rise of Fintech and Banking Disruption

The Lacklustre, Life-Changing Middle

Microfinance like all industries loves its outliers. The amazing story of the entrepreneur who built a business by starting with a single chicken and a $50 loan and worked his way up while supporting his family and contributing to his community by paying employees. Or the drastic opposite of over-indebtedness and its questionable correlation to suicides. These stories are remarkable, so they are covered and are remarked upon. They are very worthwhile topics for discussion: they show the power and potential as well as the risks and pitfalls. But the reality, for the vast majority of people, is in the lacklustre but life-changing middle.

What could be more fundamental to poverty reduction than helping the poor make sure they have enough to eat and other basic necessities throughout the week, the month and the year?

Financial services, for most people, should help provide stability in an unpredictable world. Savings for future ambitions. Loans for opportunities. Insurance for crisis. Consumption smooth, should not be seen as “consolation prize in the quest to eliminate world poverty”. It should just really be seen as the foundation from which a thriving and growing economy can be built. As Chris Dunford wisely states in the article above, “the old narrative of the microentrepreneur who, by removing capital constraints, is enabled to grasp business opportunities and lift a whole family from poverty isn’t wrong; it is just one way people use financial services.”