In any society, there’s shared history that evolves into a culture. A community’s culture can propel or hinder financial inclusion depending on the beliefs that locals hold on to and their willingness to learn or change the narrative.The power of culture comes about through the fact that the assumptions are shared and, mutually reinforced. One of the components of a culture is Stories that locals share over time about each other’s experiences that stipulates ‘how things are done around here.’
In economically challenged society groups, Banks and Insurance firms have been victims in terms of stories shared. There are horror stories of how a certain neighbour took a loan and the bank auctioned everything in their homestead when they defaulted on payments. Or how an insurance company refused to pay benefits for a deceased client leaving the children to suffer and become village beggars. Such stories have the error of omission, whereby the person isn’t aware of the terms and conditions or the contractual agreement between the institutions and those individuals. In addition, they also leave out thousands of other success stories of shop keepers who now have a chain of outlets due to utilisation of bank credits or another one who was compensated after a fire accident in his premise ensuring he didn’t have to build the business again from scratch.
We need to change this narrative in our societies in order to enable financial inclusion. To ensure impact, the person sharing the success stories needs to be known in the village. All people want is empathy and to identify with someone before they can trust them. Banks send sales representatives to sell amazing products but due to low trust levels, the uptake of financial products has been slow. It would be easier to use peer marketing in the village. Let the shop keeper cross sell financial products to his customers. He already has a great working relationship with them built over the years and trust levels are high. These are also the people who are best placed to do market activations. The farmer will be more accommodating and willing to listen if the neighbour tells him about a certain fertiliser that is good for his crops.
There’s high social capital in Africa, and in these vulnerable groups that can be utilised to change the narrative and to popularise financial products. Our governments are keen on consumer protection but customers are still shying away from formal financial products. These people utilise informal financial products such as shylocks, retail loans from shop keepers which are expensive and unsustainable leaving them in a vicious cycle of poverty. At Change Corner, we endeavour to demystify financial products and share success stories of peers to improve financial inclusion for the vulnerable groups.