How fintech can help developing countries?
In the article “How remittance helps the economy in Viet Nam” FinFan shared information about how a developing country like Vietnam can grow our education, agriculture and life quality through remittances from the Vietnamese diaspora.
In addition through the essay “Digitizing Vietnam Remittance – Could it work and develop?” FinFan also mentioned the importance of technology in finance (fintech).
The arguments from these two blogs can help us find out how fintech can help developing countries. Let’s clarify with FinFan about this topic.
Firstly, fintech can help the unbanked and underbanked people.
In many developing nations we can recognize that the rate of unbanked and underbanked people is still high when the traditional banking or financial system needs many complicated procedures and documents, which the poverty people can’t meet the standard.
With fintech, these people can easily have a saving account, transfer money or even have a loan from others without any collateral.
This is the real situation:
You go to the Cellphone store (Cellphone is a company specializing in the sale of mobile phones and related accessories in Vietnam) and want to buy the newest iPhone 14 Pro Max. However, you don’t bring enough cash to pay for this phone. In this case, the salesman will give you two other methods for this payment.
- The first one is using your credit card and making installment payments. For this method, you must have a credit card with many documents must give to the bank for proving your income. In addition, it takes lots of fees to make this payment (except some banks do not charge because of connecting with Cellphone just like VPBank).
- The second one is using the app named Kredivo, which can help you make this payment without any cash and money in your banking account. All you need to do is create an account and do a few simple operations, and then you can make installment payments with Kredivo without any fee.
If you are the user, what method will you choose? FinFan thinks that if you can’t prove your income, you’ll choose the second one.
Secondly, fintech can dive deeply into people’s daily life.
Otherwise, contrary to the flashy appearance of traditional banks, fintech projects often take research deep insight into the daily life of local citizens and always give convenient services.
The examples of this statement are ViettelPay, MoMo and Xendit in the article “Should Fintech be capitalized on in Southeast Asia countries?”.
However, the best fintech solution in this region that FinFan noticed is Wing Banks, when the owner of Wing started it 13 years ago, it was with the vision to provide every Cambodian with convenient access to mobile financial services relevant to, and for the improvement of their daily life.
Today, after 13 years of operating, Wing has become one of the most trusted and used brands in the Financial Services industry in Cambodia.
The reason why Wing can do this hard mission is that the owner always cares about the financial life of the Cambodian people.
First, he recognized that many people in Cambodia often go to local groceries and take many payments in these stores in cash. That was a big opportunity for him to connect with these shops’ owners and turned them into Wing’s trading points.
When customers came to these trading points, the owners would share about Wing Bank e-wallet and some promotions and benefits of using this for their customers.
That was a win-win campaign between the Wing and the shops’ owners, thanks to it, Wing could expand its market and on the other side, the shops’ owners could take a little more sharing commission, even if they did well, that was an extra service without the cost of them.
This successful campaign was an experience lesson to follow start-up companies like MoMo in Vietnam in their dream journeys.
The last one is fintech can upgrade these nations’ people to the next level.
In an interview with Khmer Times on March 14th, 2022, the owner of Wing Bank had a declaration:
*“Today a Wing Bank Account holder can live a 100% digital life without having to use physical cash with the help of these use-cases, partnerships and large ecosystems for digital transactions Wing Bank has created. We expect Wing Bank to drive financial, gender and digital inclusion in Cambodia in the days to come."*
This is the clearest proof that Cambodian people’s life is upgraded when they can be accessible to the newest technology and can join the trend of “cashless payments” with the other developed countries in their hometown.
Moreover, Wing can solve the gender problem in Cambodia when over 80 percent of Wing’s agents, 1 out of every 3rd employee of Wing and over 50 percent of customers are women, making Wing a shining example of gender inclusion in the region.