Financial Inclusion Insights

📊 Exciting new research from the European Central Bank (ECB) sheds light on how banks are pricing climate risk in their lending practices! 🌿 In their working paper, Carlo Altavilla, Miguel Boucinha, Marco Pagano, and Andrea Polo combine euro-area credit register data with carbon emission information to uncover fascinating insights into the intersection of finance and climate change. 🏦 The study finds that banks are indeed factoring climate risk into their lending decisions. Firms with higher carbon emissions face higher interest rates, while those committed to reducing emissions enjoy lower rates. Interestingly, banks that have publicly committed to decarbonization goals (through initiatives like Science Based Targets initiative) are even more aggressive in this pricing strategy. 💶 But here's where it gets really intriguing: the researchers uncovered a "climate risk-taking channel" of monetary policy. When the ECB tightens monetary policy, banks not only increase their overall credit risk premiums but also amplify their climate risk premiums. This means that during periods of monetary tightening, high-emission firms face a double whammy of increased borrowing costs and reduced access to credit compared to their greener counterparts. The authors argue that while restrictive monetary policy may slow down overall decarbonization efforts, it inadvertently creates a more favourable environment for low-emission firms and those committed to going green. 🌍 These findings are crucial for understanding how the financial sector is adapting to climate change and how monetary policy interacts with climate-related financial risks. It's also clear that the greening of finance is not just a trend, but a fundamental shift in how risk is assessed and priced in our economy. #ClimateFinance #SustainableBanking #MonetaryPolicy #ECB #GreenEconomy #ClimateRisk

Indian women have done everything the financial system asked. Opened accounts. Saved diligently. Built credit histories. But. We receive credit equivalent to just 25%+ of the deposits we put into the banking system. Men receive 50%+ of that, double what we get. We are, in effect, subsidising credit for men. The credit system was built to read a specific kind of financial life - formal salary, titled property, guarantors from the right networks. Women’s income is often informal, seasonal and home-based. Our assets are rarely in our names. So, the traditional system writes us off rather than underwrite us. Consider this - Women constitute 20% of India’s MSMEs and hold just 7% of MSME credit. However, we have better data today than we had decades ago. Digital payments history, Aadhaar-linked identities, GST trails and much more. If you are building a lending product, whether you’re a bank or a fintech, the question is whether you’re reading the additional signals, in fact the signals that can make or break women’s credit. 45 crore of us are credit-eligible and waiting. Is the ecosystem ready for us? Source: NITI Aayog-TransUnion CIBIL-MicroSave Consulting 2025, Microsave 2020 #CreditAccess #WomenEntrepeneurs #FinancialInclusion #IndiaFintech

In 2021, I became the first woman to head a unicorn in Israel, AKA Startup Nation. In many parts of the world, women are excluded from even the most basic financial services, so leading a fintech company is far from their reality. United Nations data estimates that 3.8 billion women live in the world, 50% of which are adults. According to the World Bank’s Global Findex Database, 1.4 billion of those 1.9 billion adult women, are unbanked. That’s 73.65%. Visit that statistic again. It represents a disturbing gender gap in financial access, with women being far less likely than men to have bank accounts or access formal financial services. This financial exclusion has personal impact. It diminishes women’s economic empowerment by restricting access to education and limiting their potential for personal growth and independence. It makes women more financially dependent, and therefore, more vulnerable. There's economic impact, too. Research by McKinsey highlights the economic loss due to financial exclusion of women, noting that closing the gender gap in labor force participation could add trillions to global GDP. Financial inclusion isn’t just a matter of equality – ensuring the same opportunities for all. It’s a matter of equity - ensuring women have the tools and access they need to fully participate in the global economy. That’s where technology enters the picture to level the field. The rise of mobile banking is a great example of innovation enhancing financial inclusion. According to a report by the International Finance Corporation, mobile money accounts are more popular among women in regions like Sub-Saharan Africa, where access to traditional banking is limited. Various fintechs provide financial literacy resources, helping women understand financial products, budgeting, and saving strategies. Other solutions include AI-driven platforms that offer personalized recommendations and advice, empowering women to make informed financial decisions. Aside from personal apps and solutions, fintechs can facilitate community-based lending and saving initiatives, allowing women to support each other through group savings or microfinance schemes, fostering a sense of solidarity and shared purpose. This International Women’s Day’s theme is "accelerate action". In my mind, nothing accelerates action like innovation. As we mark International Women's Day, let’s advocate and innovate to enhance financial inclusion for women worldwide. #IWD2025 #financialInclusion Papaya Global

After reviewing more pitch decks these past few days, I see African fintech founders are still flogging the dead horse that is "banking the unbanked" as a lazy fundraising pitch. From Yaounde to Cape Town, it’s the same story, another mobile wallet, payments app, another promise to bring financial inclusion to the masses. Truth is: most Africans are not unbanked because they lack access; they’re unbanked because they lack income. A new app won’t change that. The Brutal Truth Lack of Disposable Income – People don’t need more fintech solutions; they need more money. Without increased economic productivity, most “financial inclusion” solutions remain useless. Broken Unit Economics – Many fintechs rely on unsustainable VC fueled growth, acquiring “users” who don’t generate revenue. Regulatory Capture & Infrastructure Gaps – Governments protect banks and telcos dominate mobile money. The real bottlenecks are systemic, not just about "access." Startups often underestimate how slow, expensive, and political it is to scale across markets. Real Problems & Better Solutions Income-Generating Fintech – Instead of just moving money, fintech should help people make money. Platforms enabling gig work, SME financing, and export-focused businesses can drive real financial inclusion. A fintech that helps informal traders access larger markets, rather than just helping them "save." Decentralized Credit & Alternative Lending – Traditional credit models don’t work in Africa. Instead: Use supply chain data, mobile behavior, and transaction flows to build more dynamic credit models. Integrate fintech into cooperative lending structures like tontines or village savings groups, where trust already exists. B2B Payments & Trade Infrastructure – Cross-border trade needs work, killing SME growth. Fix it: Build better escrow and invoice financing tools that help African businesses transact across borders securely. Verticalized Fintech in High-Impact Sectors – Fintech should power real economic activity, not just payments. Agritech fintech: Give farmers access to dynamic pricing, supply chain finance, and better insurance. Healthcare fintech: Enable embedded payments and credit for medical services, helping people afford care without predatory loans. Logistics fintech: Provide financing for truckers, warehousing solutions, and real-time supply chain support. Infrastructure-First Fintech – If power, internet, & ID verification are problems, solve those first. Payments without stable connectivity? Build USSD-based financial services. Weak credit infrastructure? Build platforms that help lenders pool risk and share credit data across borders. The era of cheap fundraising gimmicks is over. African fintech must shift from vanity metrics to real impact, solving income generation, trade inefficiencies, and credit access at scale. I'm tired of saying this, founders who build with these in mind won’t need to beg for funding; investors will come looking for them.

It’s nearly 2025, please stop telling me there’s no gender bias in investment. Here are the facts from 2024: → Firms founded by women received only 1.8% (£145m) of all equity investments in the first half of the year. → That’s a decline of 2.5% compared to the same period last year, so things are getting worse, not better! → The root cause of this is a systemic bias and money not being in the hands of enough women, with only 12% of fund managers in the UK being female. Multiple studies show female-powered businesses generate 35% higher returns than male-led businesses. Not investing in women isn’t just costing investors greater returns but also creating a £250bn hole for the UK plc. If we don’t invest in women, we all lose!

The Global South, home to two-thirds of the world’s population, faces a stark reality: it contributes a mere 18% of global power generation. Alarmingly, 1.5 billion people lack access to reliable energy, especially in sub-Saharan Africa, where energy consumption mirrors that of France and Germany in the late 19th century.   To achieve a #netzero future, we need $1.7 trillion in annual investments, yet only 15% of #cleanenergy investments currently flow to these regions. This highlights the critical need for innovative solutions.   Innovative financing models, such as pay-as-you-go, are paving the way for affordable energy access, while #impactinvesting is bridging the funding gap for sustainable projects. Done right, #carbonfinancing and climate-linked debt swaps can unlock critical funds, enabling countries to meet #climate targets while driving economic growth.   I recently penned down my thoughts for the World Economic Forum on how these three key financing mechanisms are reshaping the future of energy in the Global South: https://lnkd.in/gxKFP2cW   Now is the time for private and public stakeholders to collaborate and leverage these solutions to ensure a sustainable and equitable energy future for all.   #LifeisOn #wef25

Diving into the Climate Fintech Landscape 💡 The emergence of fintech companies focusing on innovative climate solutions has gained significant momentum in recent years. They are offering fresh perspectives to financial institutions and corporations, helping them achieve their climate goals. The rising public interest in sustainability is also driving the introduction of regulations aimed at holding corporations accountable and eradicating greenwashing. 🔎 Bridging the Climate Data Gaps Quality data remains the primary ESG challenge facing financial institutions and investors. Private markets, for instance, offer limited climate disclosures. But change is on the horizon, with firms like Novata and ESG Book targeting this particular asset class and aiming to close that data gap. As we transition from a scarcity to an abundance of ESG data, we face the next challenge: standardising data. 👨💻 Addressing Data Integration Challenges Despite improvements in ESG datasets, a ‘one-stop shop’ does not exist yet. Financial institutions find themselves juggling data from multiple vendors to form a clear picture. This data must then be integrated into their internal systems and technology stack, which is often a complex and time-consuming process. Fintechs like Novisto or WeeFin, however, are addressing this issue by developing data operations platforms. 📊 Streamlining Carbon Management We’ve noticed a surge in carbon accounting start-ups offering intuitive software to help companies measure, reduce, and offset their carbon footprint. The space is very well-funded but crowded; we foresee consolidation and predict success for those with robust data capabilities, flexible technology, and value-add services like Greenly | Certified B Corp and Plan A. 🤖 Assessing and Pricing Climate Risks Climate change is no longer a distant reality. Investment managers face the daunting task of integrating climate change projections to assess risk and return expectations that inform security selection in investment portfolios. A few companies are tackling this space, including Jupiter Intelligence and riskthinking.AI in physical risks and Risilience in transition risks. Financial institutions require robust climate intelligence to help them form sound investment decisions 🌍 Carbon: A New Asset Class Decarbonisation is the critical first step towards achieving net zero. This includes initiatives to cut carbon emissions and investments in carbon credits to offset unavoidable emissions. Sylvera, for instance, helps bridge the gap. Their trusted and unconflicted data is helping asset managers evaluate the net-zero plans of investee companies globally. It also facilitates the development of new sustainable investment products. Source: Fidelity International Strategic Ventures - https://bit.ly/3YQx6W0 #Innovation #Fintech #Banking #Neobanks #OpenBanking #OpenAPIs #FinancialServices #Payments #Credit #Investing #OpenData #ESG #Sustainability 

FATF 2025 Guidance: Financial Inclusion and AML/CFT – A Balanced Approach The Financial Action Task Force (FATF) has published its revised Guidance on Financial Inclusion and AML/CFT Measures (June 2025). The document provides practical direction for jurisdictions and financial institutions on how to design AML/CFT controls that facilitate, rather than hinder, financial inclusion. Key clarifications include: 🔹 𝗣𝗿𝗼𝗽𝗼𝗿𝘁𝗶𝗼𝗻𝗮𝘁𝗲 𝗔𝗽𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗔𝗠𝗟/𝗖𝗙𝗧 𝗠𝗲𝗮𝘀𝘂𝗿𝗲𝘀 The FATF introduces the term “proportionate” in place of “commensurate” to ensure better alignment with practical implementation of the risk-based approach (RBA). Measures should be adjusted according to the level and nature of risk, not applied uniformly. 🔹 𝗡𝗼 𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗰 𝗥𝗶𝘀𝗸 𝗖𝗹𝗮𝘀𝘀𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗕𝗮𝘀𝗲𝗱 𝗼𝗻 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗔𝗰𝗰𝗲𝘀𝘀 𝗦𝘁𝗮𝘁𝘂𝘀 The Guidance explicitly states that unserved or underserved persons in both developing and developed countries should not be automatically classified as low ML/TF risk. Likewise, they should not be automatically classified as high risk. Risk must be assessed using relevant, risk-based criteria. 🔹 𝗨𝘀𝗲 𝗼𝗳 𝗦𝗶𝗺𝗽𝗹𝗶𝗳𝗶𝗲𝗱 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 (𝗦𝗗𝗗) FATF supports the use of SDD in cases of proven low ML/TF risk. Examples include basic accounts or low-value services where risk has been clearly assessed as low. 🔹 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗢𝗻𝗯𝗼𝗮𝗿𝗱𝗶𝗻𝗴 𝗮𝗻𝗱 𝗡𝗼𝗻-𝗙𝗮𝗰𝗲-𝘁𝗼-𝗙𝗮𝗰𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹𝘀 The Guidance recognises that digital and non-face-to-face methods are legitimate and effective for onboarding, provided that adequate safeguards are in place and risks are properly managed. 🔹 𝗔𝘃𝗼𝗶𝗱𝗶𝗻𝗴 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗘𝘅𝗰𝗹𝘂𝘀𝗶𝗼𝗻 𝗮𝗻𝗱 𝗗𝗲-𝗿𝗶𝘀𝗸𝗶𝗻𝗴 FATF continues to warn against “de-risking” entire sectors or population groups. Such blanket measures are inconsistent with the risk-based approach and can lead to increased use of informal, unregulated channels. 🔹 𝗜𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻 𝗶𝗻𝘁𝗼 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗥𝗶𝘀𝗸 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸𝘀 Jurisdictions are encouraged to incorporate financial inclusion goals into National Risk Assessments and AML/CFT strategies, ensuring consistency across regulatory objectives. The responsibility now lies with regulators and institutions to translate this guidance into measurable, inclusive outcomes.

Index-based insurance is emerging as a powerful tool for climate resilience, especially for smallholder farmers. Key success factors include reducing basis risk, improving user understanding, and ensuring financial accessibility. A World Bank study found that index-based insurance can cut farmer vulnerability by up to 25%. In Ethiopia, the R4 Rural Resilience Initiative has insured over 200,000 farmers, boosting savings by 25% and agricultural investments by 22%. Willingness to pay studies show promise too. A meta-analysis across 17 countries revealed households are ready to spend about 4.1% of their income on climate resilience measures. The Green Climate Fund is well-positioned to scale up these innovative approaches, which would help us more effectively bridge the climate finance gap. For more details, check out the full report by the GCF's Independent Evaluation Unit, Green Climate Fund https://lnkd.in/gW75sEWV #ClimateFinance #IndexInsurance #ClimateResilience #GreenClimateFund #SustainableAgriculture #ClimateAction #InnovativeFinance

This Kenyan fintech founder turned her university project into a $1.7 million exit, Kenya’s first recorded multimillion-dollar tech startup acquisition. Now, she leads a platform that has disbursed over 500,000 SME loans across Africa. Meet Hilda Moraa. The Digital Catalyst Hilda is redefining Africa’s financial landscape. Empowering underserved SMEs with access to capital. Born and raised in Kenya. Her fascination with technology sparked early. At Strathmore University, she pursued Business Information Technology. Here, she launched her first venture: a campus-based computer services shop. Although the university eventually introduced its services, Hilda's entrepreneurial spirit remained undeterred. In 2008, during an internship at Coca-Cola, She tackled last-mile distribution challenges. Developing mobility solutions for small retailers. This experience deepened her commitment to leveraging tech for real-world problems. In 2011, she founded Weza Tele ltd A mobile tech startup focused on small businesses. Incubated at Nairobi’s Nailab. In 2015, WezaTele was acquired for $1.7 million. Marking Kenya’s first major tech startup exit. But Hilda's journey was just beginning. In 2016, she launched Pezesha—Swahili for "financial enabler." A fintech platform connecting underserved SMEs to capital. Addressing the $330 billion credit gap stifling African small businesses. Pezesha isn't just about loans; It's about building a responsible credit ecosystem. Integrating financial education, credit scoring, and marketplace lending. To date, Pezesha has: Disbursement of over 500,000 SME loans in Kenya and Uganda. Enabled 40% of first-time female borrowers to access credit. Contributed to the creation of at least 50,000 jobs. Hilda's achievements have garnered international recognition: 🏷️ 2024 Forbes Woman Africa Technology & Innovation Award. 🏷️ 2023 Bloomberg New Economy Catalyst. 🏷️ Appointed UNCTAD eTrade for Women Advocate for English-speaking Africa (2024–2025). Today, Hilda continues to mentor, invest in, and advocate for women in STEM. She's not just rewriting Kenya’s startup narrative, she's shaping Africa's digital future. What are your thoughts on Hilda Moraa’s journey?