(A thought leadership article by Saviour Kwaku Dzage and Theandra Sokolowski)
Financial inclusion has been a topic of focus for organizations globally who are working toward building sustainable economic development in emerging markets, for quite some time.
Thanks to innovations like mobile money, we are making progress in terms of access to alternative forms of financial services. In Kenya, for instance, access has reached above 80%, according to the Center for Financial Inclusion, with M-Pesa alone boasting 30 million users in 10 countries. In fact, Sub-Saharan Africa is the only region in the world where the share of adults with mobile money accounts exceeds 10%.
However, we still have a long way to go. According to the World Bank, today, more than 50% of the population – including 350 million adults – in Sub-Saharan Africa remains unbanked. In many Sub-Saharan African markets these individuals lack access to digital financial services of any kind.
What this means in today’s reality is not just that the unbanked lack access to these services, but that they lack any traceable data related to their finances. They lack access to formal insurance products, to loans, to investment opportunities, to cost-effective means of moving money across borders and to any sort of verified indicators related to their financial health. In return, institutions lack access to such data in order to determine credit scoring, ability to pay back a loan and proper demographic insights.
It’s not for lack of trying on the part of some financial institutions who have rolled back previously stringent identity requirements, service fees and minimums in an attempt to enable more members of the population to access their services. More agile fintech companies are working to create a variety of savings schemes and tools that take into account those at the bottom of the pyramid. However, more than 50% of the population is still not accessing these services. One major reason? The lack of trust runs deep.
“One of the key reasons many people in African markets are not taking advantage of the digital banking and credit offerings that now exist is because they don’t trust financial institutions. They bring cash to the bank, it disappears, and for them there is no guarantee they’ll be able to access it. These are strong cash societies – when their money is physical, they know where it is at all times,” said Saviour Kwaku Dzage, CEO of Asoriba.
One place that does hold the trust of many individuals across Sub-Saharan Africa, however – from the wealthy to the unbanked – is the Church. Nowhere in many African countries is the sense of community stronger than within Christian organizations.
“Church is where you go to belong, to find reprieve and to ask for help when it’s needed most. It’s a social event to attend Church. It’s also a support network. Pastors can provide their community physical and spiritual guidance, and even at times financial support,” Mr. Dzage said.
Church communities hold the key to an engaged and a trusting mass audience, who – most importantly – pays their tithes to the Church on a consistent basis. This act alone is one of the few data points available for those who are not included in the system. But the majority of this data remains in privately held records which belong to the Church – or in many cases, barely records at all.
Asoriba, a fintech company headquartered in Accra, Ghana, has found a way to infuse technology into the Church community by offering a comprehensive CRM tool for Church leaders, as well as a member app for the congregation, which can be used to communicate with other members of the church, contact the pastor, keep track of upcoming events, and now, to pay tithes.
With the help of Church leaders, Asoriba has created a product which is enabling members of their congregations to open banking or mobile money accounts for the first time, track their finances and more easily contribute their tithes through the mobile app. In turn, the Church has more data around its congregation, and is able to bring more of its members into the digital space.
CEO Saviour Dzage believes this can be the way forward for financial inclusion efforts on the continent. “I believe once the church embraces digital technology, the future of having a wholly inclusive financial society is not far fetched. This is because churches are typically slow to technology adoption but once they are on board, the influence and impact are so great.“
Insuring for the future
Despite lack of access to accounts, the saving culture among the unbanked is far from weak. A significant proportion of Church community members often come together to create informal savings circles, or savings clubs. Those involved all agree to contribute a certain amount per month and can request from the group to withdraw when needs arise. 65 million adults in Sub-Saharan Africa are saving today using this sort of semi-formal method (World Bank).
What this proves is that there is an understanding of the need for insurance tools, and a willingness to contribute monthly – to save – toward a time when a withdrawal may be needed. What’s lacking is the addition of a formal body to manage these funds and independence from the group scheme.
In South Africa, an insurance company is developing a solution designed specifically to be accessible for the masses. What they need is a way to reach them. Enter Asoriba and their member Churches.
“In the same way we’re able to leverage Church communities to offer trusted ways for individuals to access digital financial services, we’re looking to offer access to valuable insurance products which can be more trustworthy and cost-effective means of insuring for the future, verses the informal circles currently in place. In reality, it’s a small shift for these members to make, but we know that psychologically it can feel like a substantial leap. That’s where support from Church leaders becomes crucial.”
By digitizing their finances – from opening bank accounts, to subscribing to insurance policies, to collecting historical data on regular weekly or monthly payments – many who have historically been shut out are finding a way into the system.
The way forward
Church communities are a critical centerpiece in the lives of many Christians in Sub-Saharan Africa – for a good reason. They offer a place for belonging, a trusted community and guidance in difficult times. For pastors and Church leaders looking for a better way to help their congregation better access essential services and financial support, connection to bank accounts and insurance products through Asoriba’s offering can be the answer.
Could this be the channel that moves the needle for financial inclusion on the continent?