Driving inclusion in informal economies

The Current Landscape

Financial inclusion in informal economies remains one of the most pressing development challenges globally. Despite decades of effort, an estimated 1.4 billion adults remain unbanked, and many more are underserved by the formal financial system. The informal economy — which includes market traders, service providers, small-scale farmers, and countless other entrepreneurs — generates significant economic value but operates largely outside the reach of banks, insurers, and other financial service providers.

The challenge is not a lack of economic activity. These entrepreneurs are productive, resourceful, and financially active. The challenge is that their activity is invisible to the institutions that could serve them, because it is conducted in cash and leaves no digital record.

The Role of Aid Organisations

Aid organisations have traditionally approached financial inclusion through direct interventions: distributing cash, providing grants, or funding microfinance programmes. While these approaches have value, they often fail to create sustainable systems. When the funding ends, the programmes end with it.

A more effective approach is for aid organisations to invest in infrastructure that enables ongoing financial inclusion rather than one-off interventions. This means partnering with fintech platforms that can provide the technology and systems needed to bring informal economic activity into the formal financial system on a permanent basis.

Specifically, aid organisations can:

• Fund pilot programmes: Support the deployment of digital payment and financial management tools in target communities.
• Provide risk guarantees: Underwrite the initial risk associated with extending financial services to previously unserved populations, reducing the barrier for banks and other institutions.
• Measure and report impact: Use the data generated by digital platforms to demonstrate the impact of financial inclusion initiatives, informing future investment decisions.

How Banks Can Engage the Unbanked

For banks, the informal economy represents both a challenge and an opportunity. The challenge is that traditional banking models — branch networks, minimum balance requirements, paper-based applications — are poorly suited to serving informal merchants. The opportunity is enormous: billions of potential customers who need financial services and are willing to pay for them, if the products are appropriately designed.

Fintech platforms like Blipply bridge this gap by providing banks with structured data about potential customers. A merchant who has six months of verified transaction data through Blipply is no longer an unknown risk — they are a demonstrated business owner with quantifiable income and verifiable financial behaviour.

Blipply's Model for B2B Collaboration

Blipply is designed as a platform that facilitates collaboration between multiple stakeholders:

• Merchants: Use Blipply to record transactions and build financial profiles.
• Banks and MFIs: Access verified merchant data to make informed lending and product decisions.
• Aid organisations: Fund and monitor financial inclusion programmes with measurable outcomes.
• Payment providers: Integrate with Blipply's infrastructure to reach merchant populations efficiently.

The Case for Guaranteed Lending

One of the most promising models for financial inclusion involves partnerships where aid organisations provide guarantees that reduce the risk for banks extending credit to informal merchants. In this model:

• Blipply provides the data infrastructure, generating verified financial profiles for merchants.
• Aid organisations provide partial guarantees against default, reducing the bank's risk exposure.
• Banks extend appropriately sized credit facilities to merchants based on their Blipply-verified financial profiles.

This model aligns incentives for all parties: merchants get access to credit, banks gain new customers at reduced risk, and aid organisations achieve measurable financial inclusion outcomes with their investment.

Sustainable Growth Through Collaboration

The path to financial inclusion in informal economies is not through any single institution acting alone. It requires collaboration — fintech platforms providing data infrastructure, banks providing financial products, and aid organisations providing the initial investment and risk mitigation that gets the system started.

Blipply's role in this ecosystem is to be the connective tissue that links all parties together, providing the data, tools, and infrastructure that make sustainable financial inclusion possible.