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FINANCE

The financial industry is vital in every market as it supports economic status. Inclusive financial business can be defined as capital that contributes to the creation of growth and sustainability of small medium enterprises and entrepreneurs. 

Most financial businesses tend to focus on quick short-term gains rather than having a holistic view that long-term profitability can have higher returns compared to the quick short-term returns. Inclusive financial business can be defined as capital that contributes to the creation of growth and sustainability of small medium enterprises and entrepreneurs. The financial services offered by this sector include loans, guarantees, credit, debit, insurance and grants.

Thereby, this highlights the need for a suitable financial service in order to ensure the economy, businesses and individual’s benefit by creating a positive impact for the society as a whole.

SIB in the Finance sector:

The fact that inclusive finance businesses aim to promote society by assisting low income and small medium enterprises, such practices are needed to ensure that there is an equal exchanges of benefits that is transparent. This is vital because non-inclusive financial providers have been known to create economic chaos due to self-interests such as financial crisis, fraud and deregulation of markets. Sustainable and inclusiveness assists the financial providers by ensuring that their clients will be provided with good financial incentives if they adhere towards transparency, responsibility in creating more income opportunities and promoting innovation in their day to day practices.

Examples of SIB in the sector:

  • Managing social and environmental risks of borrowers by ensuring the effects of the pyramid schemes are in place.
  • Offering inclusive products for further involvement of employees, women and youth.
  • Transparency & practice of ethical behavior especially regarding interest on loans, risk free rates and information on other financial incentives.
  • Identifying and investing in business opportunities that are sustainable such as renewable energy, land management, clean manufacturing and supply chain involvement.
  • Mpesa provides the inclusion of people thus resulting to provide the services of accessing inclusive finance.

M-PESA was first launched in Kenya on the Safaricom network over three years ago. Innovation is central to Safaricom's growth. It allows us to transform lives by developing tailored and transformational products and services. The financial model provides users to transfer money using mobile banking in order to access money transfer services. This makes it easy, safe and convenient for all consumers.

How is Mpesa an Inclusive business?

  • The M-Shwari service gives M-PESA customers including youth an opportunity to save and earn interest on those savings, as well as accessing micro credit for small amounts of money.
  • The loan can be accessed anytime and the customer receives the loan instantly on their M-PESA account. This is an inclusive initiative because every user can access quick, affordable loans.
  • Money movement in and out of the M-Shwari savings account to the M-PESA account comes at no cost or interest rate for savings.

Case studies:

Challenges facing SIB in finance:

  • The mind shift of introducing the illusion that sustainability and inclusiveness is not a company loss or expense but a source of higher profits is fairly a new concept that needs to be exploited.
  • Financial institutions and staff are oriented toward short term monetary gains
  • Kenya being a developing country tends to subscribe to irresponsible financial aid from other developed nations at the promise of infrastructure rather than generating its own good financial practices for income.
  • Sustainable business investment need to make financial sense because changes need to be financially sustainable too. This requires innovation and careful planning. 

Summary of SIB in finance

Inclusive Finance aims to provide universal access at a reasonable cost to a wide range of financial services provided by a variety of sound and sustainable institutions. This in turn enhances access to financial services for both individuals and small and medium sized enterprises rather than financial exclusions that most financial business do. Accessing financial services is crucial for the Kenyan economy in order to strengthen financial sectors and domestic resource mobilization and can therefore make a significant contribution to social and economic development.

Furthermore, SIB encourages financial inclusion in order to improve people’s lives by generating income and economic activity, creating jobs, increasing access to social services and protecting people from unforeseen risks. 

News

Tools

Publications

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Practical Examples

  • F3 Life

    F3 Life provides the “Farmer’s Life” service to financial systems, innovative systems for credit, credit scoring and provision of technical Read More
  • SMEP

    Small and Micro Enterprise program (SMEP) is a company that deals with public deposit borrowing financial institution that focuses mostly Read More
  • Faulu MicroFinance Bank

    Faulu is a deposit taking microfinance institution providing a platform aimed at banking the previously unbanked through a variety of Read More
  • Kenya Women MicroFinance Bank

    The Kenya women microfinance bank is an institution with a long-term commitment that aims to eradicate poverty and reinforces its Read More
  • K-Rep Bank

    K-Rep Bank provides financial services to all because it believes that this is a basic human right, mainly for the Read More
  • Juhudi Kilimo

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Networks

  • WBCSD

    This organization aims in creating businesses that are inclusive in order to galvanize the global business community by expanding access Read More
  • SEA (Sustainable Entreprenuer Award)

    SEA focuses on business that have lucrative business models that have solutions to corporate problems in order to enhance sustainable Read More
  • SNV

    SNV provides access to advisory services, promotes the development and brokering of knowledge and support policy dialogue at the national Read More
  • Bio-innovate Africa program

    This program emphasis on the use of modern biosciences to improve crop productivity and resilience to climate change in small-scale Read More
  • SEED Africa Symposium

    The Seed Africa Symposium is an international forum that enables investors, policy makers, business leaders and practioners to examine emerging Read More
  • Inclusive Business Accelerator

    This is an open innovation platform that connects social innovators, business coaches, impact investors and advisories to find the right Read More
  • Kenya Flower Council

    Kenya Flower Council (KFC) is a voluntary association of independent growers and exporters of cut-flowers and ornamentals, formed in 1996, Read More
  • Kenya Healthcare Federation

    Kenya Healthcare Federation (KHF) is the health sector representative for the Kenya Private Sector Alliance. KHF is dedicated to engaging Read More
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