1. Problem Statement

 

Financial Inclusion means that individuals and businesses have access to useful and affordable products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible way. In 2005, the United Nations recognized “financial inclusion” or “inclusive finance” as a development concept that refers to access to and use of financial services, including credit, savings and insurance. China regards financial inclusion as important for achieving a “moderately prosperous society”, as stated in the State Council’s Plan for Promoting the Development of Financial Inclusion (2016-2020). In Asia, China has a relatively high level of financial inclusion in terms of saving deposits in formal financial institutions. The World Bank’s Global Findex database shows that 79% of China’s adult population had an account with a formal financial institution in 2014, which is 10% higher than the regional average of 69%. However, there are still 234 million unbanked adults in China. There is still much room for progress in eliminating financial inclusion.

 

1. Market Research and Proposed Solution

 

It is in this context that China’s financial entrepreneurs have turned to new technologies — especially software and digital platforms — as a more efficient means to provide financial services to private individuals and Micro and Small and Medium enterprises(MSMEs). Ant Group, for example, is a global fintech enterprise known for its innovative approach to financial services. With a mission to make financial services accessible to everyone, Ant Group uses technologies such as artificial intelligence to provide solutions ranging from payments and lending to insurance and wealth management. By focusing on inclusivity and leveraging its extensive digital ecosystem, Ant Group is dedicated to promoting financial empowerment and bridging the gap for the underserved and unbanked populations worldwide. Today, Alipay has over 700M active users and completed over $8 trillion in transactions in 2017 – that’s equivalent to 65% of China’s GDP. My enterprise tackles financial inclusion in the suburbs of Shanghai, and is aiming at people who face significant challenges that hinder their business growth or financial inclusion.

 

1. Formative Decisions

 

In some low-income areas of Shanghai, low-income people lack banking services. One possible reason is inconvenience, as rural areas may not have access to banking systems. Another reason is that they are paid in cash, which does not give banks enough credibility to lend. These problems are often linked to poverty, limited economic development and job creation in these areas. Our mission is to drive sustainable economic growth and financial inclusion in these areas and provide the tools, resources and support they need to succeed. Our business model is based on two solutions: Financial Literacy Training, where we host workshops in our local community that give people a better understanding of financial management, and Community Partnerships, where we work with schools and organizations to reach a broader audience. The legal structure of my enterprise will be hybrid. As my enterprise is mainly focused on social return rather than return on investment, the main source of income for my enterprise will be fundraising.

1. Functional Inputs

 

The main source of funding for my enterprise will be donations and endowments. One foundation that could fund my enterprise is Give2Asia in Hong Kong, which provides grants for some of the most important issues in China. Give2Asia's mission is to "empower communities in Asia by making cross-border giving easier and more effective” (Give2Asia, 2001). I believe this aligns with my enterprise's mission as we too aim to change local communities for the better. To find the talents we need, our enterprise could start by recruiting experts with financial management skills on Linkedin – a workplace-based social media platform. Our enterprise will also recruit volunteers and start a training program where these volunteers will learn about financial management and eventually hold workshops and help those in need. Our enterprise will also work with schools where experts could give lectures and information sessions to improve students' financial knowledge. This enterprise model makes sense because my enterprise focuses on promoting financial inclusion for certain groups of people and this enterprise model allows us to do this at minimal cost.

 

1. Foundational Principles

 

My enterprise would initially begin in the form of a workshop in the area. I would then gather feedback from participants and make adjustments based on that feedback. My enterprise would be based on a specific roadmap where it will go through three phases. In the initial phase, we will launch the program and build local partnerships. We will also try to make connections with local schools. In the growth phase, we will grow our enterprise, introduce more advanced training – as the workshop could be attended by a more diverse group - and seek additional funding. Finally, in the sustainability phase, we will seek to make a global impact and we could launch microcredit projects that provide micro-loans for people to start enterprises. Metrics include the number of participants or people we have impacted or funding received. At a higher level, the metric could be how successful the microcredit projects have been.​
 

Bibliography

 

https://www.worldbank.org/en/topic/financialinclusion/overview

 

https://iems.ust.hk/tlb20

 

https://www.applicoinc.com/blog/ant-financial-services-platform-largest-fintech-in-world/

 

https://www.worldbank.org/en/publication/globalfindex

 

https://avpn.asia/blog/development-of-inclusive-finance-in-china/

 

https://www.fastcompany.com/91014699/our-world-isnt-designed-for-the-growing-number-of-unbanked-people