If you’ve been following digital technology trends across various African countries for several years, you would’ve most likely have come across the phrase “Financial Inclusion.” In its most idealistic form, financial inclusion simply means ensuring that citizens in the lower income tiers have access to financial services, especially banking, as easily and especially in an affordable manner.

However, over the years, most of what has been marketed as financial inclusion across Africa is anything but inclusive.

For starters, there has been a proliferation of mobile phone based micro finance apps that are being punted as financial inclusion solutions yet when you scratch the surface and look at the details, the transaction fees, administration fees, effective interest rates, you start to realise that these are more exploitative and predatory and over time they erode the little value that their target market already has from their income and makes them dependent on the credit offered. This is even more shocking when you compare the fees, as a percentage of the credit offered, that some of these FinTech credit startups offer against what citizens of higher income are being charged.

A similar can also be made even for mobile money.

Generally speaking, as a percentage, smaller value transactions (the type that low income earners regularly perform), attract comparatively higher “transaction fees” than the higher value amounts. This becomes worse when you consider how often smaller value transactions are performed.

The other promise of financial inclusion is supposed to be how easily accessible it is for the customers, i.e. making the mobile money or microfinance available through an app or USSD. However, this, in most cases, comes with a privacy compromise. In one such case, Branch.co, a microloan app, grades your creditworthiness based on how you use your mobile phone including it being able to read and edit your text messages, as well as read your call logs. This is done in order to ascertain your relationships and in some cases (text messages) how you use money. You could argue this is fair exchange for the loans they offer but this is open for abuse. Text messages store more than just transaction history (in cases of banking and mobile money texts).

The fact that the company also seems to collect and store these text messages and call logs is even more worrying. Their privacy policy does state all this, however most users probably don’t read it:

Each time you visit one of our Sites or use one of our Apps we may automatically collect the following information:+ technical information, including the type of mobile device you use, unique device identifiers (for example, your Device’s IMEI or serial number), information about the SIM card used by the Device, mobile network information, your Device’s operating system, the type of browser you use, or your Device’s location and time zone setting (Device Information);

+ information stored on your Device, including contact lists, call logs, SMS logs, Facebook friends, contact lists from other social media accounts, photos, videos or other digital content (Content Information);

+ data from your use of any other third-party application on the Device or the Service Sites; and

+ details of your use of any of our Apps or your visits to any of Our Service Sites; including, but not limited to, traffic data, location data, weblogs and other communication data (Log Information).

My problem is not that they do this, but that in most cases, such apps are passed off as being “for the good of the people”, when in reality, they really aren’t.

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