AR Apps: Satori XR's Guide to Financial Inclusion

According to the World Bank (2022), over two billion people worldwide cannot access basic financial resources. When paired with a widespread need for financial literacy, this issue can be considered a large-scale socioeconomic problem, preventing economic development, especially in underprivileged populations. Real possibilities for societal transformation can come about when leaders, communities and businesses work together and utilise modern technology to support their goals.

The Bill & Melinda Gates Foundation has noted that providing financial services for the poor is one of its organisational goals. Financial inclusivity aided by technology is at the centre of their concern when battling the current socio-economic issues society faces today.

What Is Financial Inclusion?

According to the Rangarajan Committee, Government of India (2008), financial inclusion is ‘The process of ensuring access to financial services and timely, adequate credit where needed, to vulnerable groups such as weaker sections and low-income groups, at an affordable cost.’

Financial inclusion is a crucial pillar of social inclusion and is exceedingly useful in fighting poverty and income inequality by opening previously unattainable opportunities to disadvantaged parts of the population.

Aside from increasing the overall availability of financial services and products, financial inclusion also involves education on financial literacy, infrastructure and usage to ensure economic equality worldwide.

Types of Financial Inclusion

Financial inclusion can be broken down into the following types:

Basic banking services: Basic banking services include the ability to withdraw cash, the completion of payment transactions, an electronic means of identification, a payment account with basic features, and a device for accessing the account (such as a debit card and online banking ID).

Savings and investments: Most banks provide savings accounts with interest rates that increase with your balance. In addition, they offer debit card services so you can make cashless transactions.

Relevant and affordable insurance: Insurance is a contract, represented by a policy, in which a policyholder receives financial security or compensation from an insurance firm against losses. The firm combines its clients’ risks to make payments to the insured more manageable.

Financial literacy: Access to financial literacy will improve the lives of the financially excluded. Financial literacy refers to the understanding and proficiency in different financial management services, such as investing, budgeting, and personal financial management.

Financial consultancy and advice: Financial advisers offer clients financial assistance or recommendations in exchange for remuneration. Offering these services and teaching people how to efficiently manage their finances will allow them to reap the benefits of financial success.

Remittances: Refers to money transfers sent from one individual or family to another. Remittances cater to the recipients’ requirements and help combat poverty.

Credit access: Access to credit allows individuals more financial freedom and a chance to finance their business ideas. With fluid credit access, business owners can pay staff, scale their businesses or apply for insurance.

How the Bill & Melinda Gates Foundation Supports Financial Inclusion

About the Bill & Melinda Gates Foundation

The Bill & Melinda Gates Foundation has dedicated over 20 years to address the most significant inequities in our world. The foundation’s primary focus is diversity, equity and inclusion. The foundation has significantly raised the standard of living for millions of people in poor areas with low access to health and education. The Bill & Melinda gates foundation has formed strong partnerships with prominent organisations worldwide, including the Indian Government, to identify problems, create solutions, and promote change. The focus of these collaborations includes a broad range of topics, such as

Gender equality
Agricultural development
Healthcare
Sanitation
Financial empowerment for disadvantaged communities.

The Bill & Melinda Gates Foundation has worked with the Indian Government to influence people’s lives in Bihar and Uttar Pradesh significantly. These states have a combined population of more than 300 million and are in dire need of financial inclusion, specifically digital financial inclusion.

Supporting Financial Inclusion

The goal of the current financial inclusion programme set out by the Bill & Melinda Gates Foundation is to expand access to digital financial services among the poorest people in order for them to build security and prosperity for themselves and their families and their communities.

The foundation works to broaden the reach of low-cost digital financial services for the economically underprivileged by promoting the development of digital payment systems.

This can help spread digital financial services rapidly and support the development of national and regional strategies that accelerate progress for the economically underprivileged.

How SatoriXR Is Aiding Financial Inclusion

SatoriXR have been chosen to participate in the Technology4Inclusion Challenge. As the proud winners of the challenge, we have received extensive funding and are excited to announce our collaborative partnership with the Grameen Foundation in India. The Grameen Foundation will work with us over the next few months to build an AR-based learning application with a grant received from the Bill & Melinda Gates Foundation. This new augmented reality application will contain AR functionality, machine learning, games with Google Maps integration, and much more to support financial inclusion and literacy in the country.

Does Financial Inclusion Help Eradicate Poverty?

According to a study delivered in the Journal of Economic Structures, financial inclusion contributes to

Faster and more equitable macro-economic growth,
Reducing poverty,
Promoting income equality in developing countries by providing access to formal financial services

It may not directly eradicate poverty, but it can be considered to be an essential tool to increase economic development in developing communities.

Benefits of Financial Inclusion

Basic transacting is the first step toward widespread financial inclusion (The World Bank, 2022). Access to a transaction account dramatically improves the lives of the financially excluded by allowing them to send and receive payments and store money. Access to financial services and resources also helps businesses plan advancements and expand their activities (FINCA, 2017). Financial inclusion can benefit businesses in a few ways;

- Increased business scalability.Access to financial services means smaller businesses can access the necessary funds to increase the size and scale of their operation. This high financial accessibility provides more significant potential for business growth.

- Potential for equalisation – Financial inclusion also provides opportunities for equalisation; it can help give people the chance to improve their standard of living and provide access to essential financial services. Boosted access to economic opportunities can reduce equality across the board.

Encourages the formation of new businesses and job creation – Financial inclusion provides access to essential banking services; this offers economic opportunities and funds for fledgling business owners to start new business endeavours. These new business expansions can create jobs and boost overall economic activity.

Why Does Financial Inclusion Matter?

Financial inclusion is crucial as it acts as a strategic bridge that regulates access to financial services and products for those in need of basic financial services. Financial inclusion seeks to provide financial benefits to all participating members of society, regardless of their level of income or net worth.

According to OXFAM (2020), the wealth gap continues to grow more expansive, and fewer than 1% of the world’s population owns 41% of its wealth. Powerful technological advancements suggest that the future of banking will centre on affordable mobile apps and that banks and, eventually, telecommunications firms will compete to provide financial services.

Suppose financial inclusion gains the support of technology and the private sector. In that case, digital financial services can lead to greater financial inclusion and the expansion of financial services and benefits to non-financial industries. This expansion of digital financial services will serve as both a commercial opportunity and a means of reducing inequality.

Financial inclusion faces challenges worldwide, and many disadvantaged people lack access to basic financial services. At SatoriXR, we remain committed to addressing the challenges of financial inclusion; with the development of our new AR application, we hope to bridge the gap between those who have access to financial services and the financially excluded.