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Accessible Credit Will Not Lift Individuals From Poverty, Financial Education Will

Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.

Successfully and sustainably scaling a financial product/service is tied to the ability to educate individuals on how they can use acquired access to money to build their future wealth and overcome unforeseen financial challenges.

Hundreds of lending startups with genuinely noble intentions to empower financially challenged ones have a dangerous misconception about their target audience – a belief that simply giving money to the poor solves the issue of poverty. The only barrier modern non-institutional lenders are trying to overcome is to deliver the money to the potential consumer.

Having money, however, does not solve the core issue – lack of financial literacy among individuals that have been systematically excluded from the formal financial system and, unfortunately, are not always empowered with a knowledge on how to use the money to lift own family from poverty. Obviously, immediate basic needs are as far as the credit goes (which is absolutely understandable). After spending the obtained credit, financially challenged families are forced to find a source of credit to pay back the first credit. It creates a perpetual vicious circle that further diminishes chances to obtain financial freedom and build long-term resilience. What

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