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Jon Lieberkind and Mathias Ejdrup Bredkjær founders and co-CEO's of Grandhood
Financial Inclusion: Profiting in Unexpected Markets By including technology and new business models, startups are able to turn financial services with low revenues into good businesses. This is seen both in East Africa and in Denmark. By: Sebastian Kjær
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hereas in Denmark it’s almost unheard of to not have a bank account, in many other countries it is quite uncommon. Consider Ethiopia, which is home to the Danish startup Jamii.one. There, banks target wealthy clients and citizens because the country’s nascent financial sector and lack of fintechs make broader demographics not as profitable or worthy of pursuing. Against this backdrop, the majority of Ethiopians lack access to financial services.
According to Charlotte Rønje, the CEO and co-founder of Jamii.one: “In Ethiopia, 72% of the population doesn’t see themselves as potential bank customers. But I have yet to meet so-called ‘unbanked people’ who do not save for the future.” Despite the fact that many women living in rural East Africa do not have bank accounts or official identification papers, they are often members of savings groups. Community-minded, they save up as a collective to expand their stores or to afford larger purchases, such as a bed or an electric
stove. Knowing this, Jamii.one is working with these communities to scale financial services to low-income areas.
Scaling micro-financing As of 2017, the World Bank estimated that 1.7 billion adults lacked access to banks or mobile payment solutions. This is down from 2014, when 2 billion people lacked a bank account. The reason? Technology. Looking ahead, Jamii.one sees it as an inevitability that technology will give more unbanked people access to financial services, including loans.
