​A financially inclusive system ensures access to essential financial services that support the well-being of individuals and businesses, while also offering protection against unexpected life events. By contrast, financial exclusion prevents many from participating in social and economic development, leaving them vulnerable to financial hardships.

Financial exclusivism is a reality for millions in both developed and developing countries. For some, it manifests as difficulty opening a bank account. For others, it's hidden and exorbitant fees. As such, financial inclusion isn't just about improving availability and access to loans but also consumer protection.

It's also about ensuring individuals are knowledgeable about their options so they can make informed decisions. Financial education and literacy are centre stage of financial inclusion. The financially educated understand the benefits of formal financial services over informal, often-exploitative options.

Speaking of options, traditional banking systems still dominate the financial services sector, largely because many people are unaware of alternative financing options. Meanwhile, traditional lenders overlook underserved segments because it's expensive to serve them due to their geographic dispersion.

Facilitating the entry of modern financial services education may help raise awareness about alternative solutions. It would also help increase competition and spur innovation, particularly among conventional providers. Still, many people, especially in rural areas, trust traditional banks over new systems. Building trust may take time, however. As such, there's a need to make underserved segments attractive to traditional institutions.

Solutions include enhancing collaboration and data-sharing between utility companies, telecom operators, and e-commerce platforms. It builds a greater supplementary data point. Centralizing customer information to capture their total financial health will help address concerns around the lack of traditional credit data.

Unlike many emerging financial services, traditional systems have the infrastructure and customer networks. They need to find more ways to make serving the unbanked cost-effective. Solutions include expanding agent-banking, self-service kiosks, and cash deposit machines. Branchless banking would help reduce costs for both providers and consumers.

Traditional financial institutions consider the unbanked and underbanked a highly risky segment due to a lack of formal credit history. The consequence is further marginalization. One way to ease this concern is to implement flexible risk evaluation systems. Leveraging digital identification systems would help lenders better distinguish between low-risk and high-risk loan applicants.

Many mainstream financial products overlook the unique financial situations of underserved communities. Take insurance products, for example. While providers sell life insurance, a rural farmer struggling with uncertain weather could use weather insurance. Meanwhile, informal economy workers could use income-contingent loans, where repayment depends on anticipated income, unlike the time-based ordinary bank loans repayment.

None of the solutions means much uptake-wise, unless there's trust. Many vulnerable people have fallen victim to exploitative and misleading tactics, mainly deceptive marketing promises to lure consumers into buying harmful products. Some providers use influencer marketers who lack the requisite financial competence.

Deceptive financial practices erode trust in financial institutions. Protecting financially vulnerable populations demands a multisectoral approach. That includes policies for disclosure and against unfair commercial practices, such as data mining, where big data companies unethically source data and sell it to advertisers, who then push targeted ads to vulnerable consumers.

As promising as many of the solutions may seem, much depends on supervision. Without regulatory supervision, public trust wanes, and modern financial services may regress, further reinforcing exclusionism. A well-supervised implementation will help minimize capacity constraints and structural barriers. It will also improve uptake by reducing regulatory uncertainty around new, innovative financial products.

​Small and medium enterprises, often called SMEs, make up the majority of businesses in developing economies. They generate employment, stimulate trade, and expand tax bases, yet financing remains one of their greatest barriers. Traditional banking practices exclude many SMEs, creating a persistent credit gap that requires lending models tailored to their conditions.

Conventional systems favor large firms. They treat immovable assets and audit financials as prerequisites, disqualifying many small companies operating informally or through cash-based sales. The built-in exclusion leaves firms with stable revenue streams unable to secure the working capital needed to grow.

To address these barriers, banks use collateral substitutes. Instead of property deeds, they may accept invoices or purchase orders. These asset-linked instruments assure expected revenue without tying credit to fixed real estate. By anchoring loans to receivables and contracts, lenders expand access for companies that would otherwise remain outside the formal credit system.

Transaction-based lending evaluates behavioral and cash-flow data rather than physical assets. Mobile money records, point-of-sale transactions, and utility payments form digital footprints that reveal an enterprise’s financial activity. Banks can analyze these flows to judge risk and structure repayment around business cycles. This method differs from collateral substitutes by using behavior as proof of creditworthiness rather than paper assets.

Some institutions refine their assessments further by tailoring scoring systems to industry-specific data. Lenders may adapt frameworks to include transaction flows or value-chain records that capture the unique risk patterns of different industries more accurately than generic scorecards.

Export-linked financing provides another structured pathway. When SMEs secure contracts with overseas buyers, banks can extend credit backed by those agreements. Development finance institutions strengthen this model with guarantees or syndicated lending facilities. For example, Afreximbank—a multilateral trade finance institution—partnered with CBZ Bank in Zimbabwe in 2024 to channel $80 million into exporter financing, demonstrating how international demand can anchor SME lending.

Digital platforms are reshaping the lending infrastructure itself. Online applications, automated scoring tools, and partnerships with fintech providers reduce the cost of serving smaller accounts. By embedding processes in digital ecosystems, banks can approve loans quickly, monitor repayment in real time, and scale outreach without dense branch networks.

Risk management at the bank level ensures portfolios remain stable. Credit insurance and participation in risk-sharing arrangements with development institutions both reduce exposure. These practices allow lenders to expand SME credit while keeping defaults within tolerable limits.

Public policy frameworks reinforce these private safeguards. Functioning credit bureaus, government-backed guarantee schemes, and programs that provide loans in local currency give banks confidence to widen lending. Together, these measures complement bank-level strategies to create a more reliable environment for SME lending.

Institutional adaptation is also essential. Banks prioritizing SMEs often establish dedicated units, retrain credit staff, and deploy technology platforms suited to smaller accounts. These changes mark a strategic shift that positions SMEs as a core growth market rather than a marginal one.

Emerging markets will continue to depend on SMEs for jobs and productivity. Lending systems that integrate collateral substitutes, behavioral data, sector-tailored scoring, export financing, digital tools, and private and public safeguards can close the persistent credit gap. With institutional change in place, the payoff extends beyond firms to broader employment generation and tax base expansion.

​The OPEC Fund for International Development plays a crucial role in supporting farmers in developing countries. Some of the organization’s initiatives deploy strategic applications of technology to increase crop yields, manage pests, and improve general operations and profitability.

The fund supports initiatives that integrate modern farming techniques to boost crop yields. Projects include improving water management systems through technologies like drip irrigation, rainwater harvesting, and efficient irrigation methods. It funds the adoption of farm machinery, including tractors, tillers, and harvesters, to enhance productivity and lower labor costs. Additionally, it promotes the use of tools like drones, GPS, and sensors to optimize planting, fertilization, and pest control, which can improve yields and reduce environmental harm.

The fund also helps improve access to markets by investing in rural infrastructure, such as roads, cold storage, and market centers, to reduce post-harvest losses and transportation challenges. It encourages the use of digital platforms to connect farmers with buyers, provide market insights, and enable online transactions.

The fund supports programs that promote drought-resistant crop varieties and sustainable land management practices to address climate change challenges. These initiatives include agroforestry and conservation agriculture to protect soil health and prevent erosion.

The OPEC Fund for International Development equips farmers with tools and knowledge to enhance productivity and strengthen their livelihoods. These efforts contribute to improved food security in developing communities.

​Financial inclusion refers to providing individuals and businesses access to affordable and reliable financial services such as payments, credit, savings, and insurance. According to researchers and finance professionals, inclusive financial systems may help reduce poverty and enable economic growth.

Access to these financial services allows people to manage daily expenses, save for emergencies, invest in education or business ventures, and mitigate risks. Financial inclusion also fuels innovation, expansion, and job creation in small and medium-sized enterprises.

Nonetheless, about 1.7 billion adults worldwide remain unbanked, often due to barriers such as high costs, limited financial literacy, and technological disparities. These challenges disproportionately affect underserved communities, hindering their ability to participate in the economic system.

Overcoming these challenges requires collective action from governments, financial institutions, and technology providers to implement policies, invest in financial education, and leverage technology. Solutions like mobile banking and fintech platforms have proven instrumental in reaching underserved populations.

​Blockchain technology offers small businesses tools to improve security, enhance supply chain visibility, and streamline payment cycles. By recording transactions in linked “blocks” that form a secure, tamper-proof chain, blockchain provides transparency and efficiency. These benefits have prompted businesses of all sizes to adopt blockchain to enhance operations and decision-making.

The blockchain’s transparent transaction records build trust between parties that may be unfamiliar with each other, removing the need for intermediaries. This reduces delays and simplifies business transactions, making processes faster and more efficient.

Unlike centralized systems, the blockchain shares data across an ecosystem involving various parties such as distributors and suppliers. By distributing control, blockchain fosters trust in transactions and ensures no single entity dominates the decision-making process.

The blockchain also supports peer-to-peer payments, eliminating fees from financial intermediaries. Businesses with international customers can use blockchain networks for direct, rapid money transfers, with automatic currency conversion. By automating tasks like reporting, auditing, and data collection, the blockchain reduces reliance on third-party vendors and associated costs.

Automation powered by the blockchain enhances efficiency and reduces human error. When combined with artificial intelligence, the blockchain can handle routine tasks such as customer support, inventory management, and invoicing. For small businesses with limited staff, automating these processes saves time and alleviates operational pressure.

​US financial institutions tend to overlook small and medium-sized enterprises (SMEs) until they grow larger. This approach misses a valuable opportunity to support businesses during critical growth stages. Early-stage SMEs often need tailored financial services that can help them gain an industry footing and market share, positioning banks as key partners in their growth.

McKinsey's 2023 survey estimates that small-business banking generates roughly $150 billion in annual revenue for the US banking sector, accounting for around 17 percent of the industry’s revenue. This includes services like loans, deposits, cards, cash management, and merchant services. Targeted solutions for SMEs can expand this potential further. According to the survey, SMEs want their primary financial providers to offer additional tools, such as accounting and payroll, which many banks currently lack.

A related study shows that while SMEs prefer banks to provide these services, they spent over $530 billion in 2020 on third-party providers for accounting, bill payment, invoicing, and payment processing. Open banking can help banks integrate these services, offering SMEs more complete financial solutions and strengthening customer retention. This integration requires real-time connection between core banking platforms and supportive systems.

Expanding SME support services is an untapped revenue stream. By using open banking data, analytics, and artificial intelligence (AI), banks can better understand SME needs and provide relevant services. This strategy can improve SME trust, foster long-term relationships, and help banks maintain competitive advantages while addressing the market inroads made by newer financial players.

​Small and medium enterprises (SMEs) often have different needs than larger commercial organizations. SME decision-makers tend to rely more on personal experiences when setting professional expectations, while larger companies typically follow established organizational guidelines. In response, banks must adapt their digital services to remain competitive with other service providers, such as online retailers and payment platforms.

Advancements in banking technology, data analytics, and customer relationship management can provide a more personalized and engaging service model than traditional relationship management approaches. Banks should recognize that SMEs often have different decision-making dynamics than larger organizations, which are typically more detached from individual customer expectations. This consumer-oriented approach is key to understanding and serving the SME market effectively.

When choosing a banking partner, customer service quality and client loyalty are important considerations for SMEs. While factors like branch location and online service offerings are significant, SMEs often prioritize customer service. Despite this, SMEs generally remain loyal to their banks, only considering switching to more favorable pricing or improved digital services.

Although SME decision-making behaviors and needs can vary significantly depending on the organization and industry, banks often address these preferences through a relationship-managed service model, which may still be effective in some situations. However, digital tools can offer a more comprehensive solution to these challenges. Technologies such as automated meeting notes, AI-driven data mining, digital assistants, integrated relationship-manager workbenches, and proactive scheduling tools can help banks better meet SME needs.

​Digitalization is enabling the agricultural sector in the developed world to improve crop yields, fine-tune crop strains, and access better economic opportunities. However, farmers in developing nations have often been left behind. The Ricult Farmer App aims to change this.

Developed by teams at the Massachusetts Institute of Technology, Ricult operates in Pakistan and Thailand. The app offers smallholder farmers free access to weather updates, satellite imagery, pest management tools, and measurement aids, using artificial intelligence (AI) and machine learning (ML). It also helps farmers secure loans for urgent needs.

According to co-founder Aukrit Unahalekhaka, around 400,000 farmers in Thailand have signed up to access the Ricult Farmer App. The platform has also increased farmers’ income by at least 50 percent. Ricult is often compared to a robo-advisor for its range of features.

Additionally, RicultX, another platform, enables farmers to monitor harvests and create yield forecasts. It also interacts with satellite imagery maps to improve decision-making based on prediction models.

​In June 2024, CBZ Bank Limited, the largest banking institution in Zimbabwe, signed a breakthrough agreement with the African Export-Import Bank (Afreximbank) at the Afreximbank Annual Meetings in the Bahamas. The money supplied comes in two tranches, with Afreximbank extending a $60 million line of credit, as well as an Afreximbank Trade Facilitation Programme (AFTRAF) facility valued at $20 million.

The line of credit will ensure that CBZ Bank and its financial intermediaries have robust funds in support of small to medium sized businesses (SMEs) and their capacity building efforts. With export-focused SMEs able to readily access investment capital, they will boost foreign exchange earnings and reduce pressure on foreign currencies within the country.

The funds are essential in ensuring economic continuity at a time when many international banks are reluctant to release loans to Zimbabwean institutions. The AFTRAF facility allows CBZ Bank to extend lines of credit to SMEs in an environment where confirming banks are in short supply.

In addition to promoting exports, the facilities will provide a boost to imports of critical products such as drugs, fertilizers, and fuel, which are essential to social welfare and the ramping up of export industries. Another aspect of CBZ Bank's plan involves increasing the accessibility of funds through affordable mobile banking platforms, which promote an overarching goal of financial inclusion for the traditionally underbanked.

​The banking sector is integral to the modern economy. Banks supply the necessary credit people need to fund everything from business equipment and operations to personal items such as vehicles, homes, or a specific lifestyle.

It’s common knowledge that banks keep depositors’ money, while earning some interest on it. This enables them to play the role of an intermediary facilitating the flow of funds between savers and borrowers. From this privileged position, banks can significantly impact stability, growth, and development.

Being an essential conduit of credit between those who save money and borrowers who need it in the form of loans allows room for efficient capital allocation within the economy. This lending activity stimulates economic activity because the borrowers spend the funds the banks provide, creating demand for goods and services.

Another way banks drive economic growth is by creating credit. Regulators empower banks to loan several times the total amount of funds in their deposit base, resulting in an expanded money supply. This so-called money multiplier effect leads to increased levels of consumption, higher economic activity, and more jobs.

Banks also finance investments for long-term economic growth, empowering businesses for capital expenditure. Such investments contribute to productivity growth, technological advances, and the creation of new industries.

As banks fund economic activity, they also contribute to economic stability through risk management. They ensure borrowers are credit-worthy and diversify their (the banks’) loan portfolios to mitigate the risk of loan defaults. This prevents financial crises, and sustains public confidence in the banking system.

It’s also important to highlight the role of banks in payment systems, making the exchange of goods and services possible. Commerce and economic growth depend on the availability of efficient payment systems. Reliable and secure payment options enable banks to contribute to the overall efficiency of the economy.