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CGAP Study: Digitization in Microfinance Catches up But…

Digital finance offers new opportunities for the world’s 450 million to be part of the global financial inclusion strategy but digitization of financial services should not come at the expense of in-person support, said CGAP’s new human-centered design research.

Using human-centered design (HCD), CGAP and its partners – design firms and financial institutions – determined that in order for digital financial solutions to work for smallholders, financial service providers need to minimize the perceived risk of trying new technology and focus more on personal support.

Smallholders traditionally lack access to formal financial services and digital financial services are a logical and promising solution, it said but smallholder farmers and their families face several challenges when it comes to using digital devices, including mobile phone financial services with poor mobile network connections, low penetration of mobile devices, and low rates of mobile literacy.

For digital finance to work for these customers, the products and services must be tailored to their needs and combined with personal support, said the study which was based on research findings from projects in Cambodia, Rwanda, Senegal and Zimbabwe.

CGAP Study Highlights:

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