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Written by: Aatish Khanna
Though Africa has made notable strides in gender equality, the hardships faced by the native women traditionally were a part of the reasons they were able to break free from the social constructs and make a place for themselves in the society. Earlier, when they were denied any form of cash income and access to property, they moved to urban centres and created independent earning sources. And one of the tactics, which is still actively benefiting people, is ROSCA.
What is ROSCA?
ROSCA, a short form of rotating credit and saving organisation, is a financial scheme to mobilise funds outside the formal cash flow structure. It involves members contributing monthly into a common fund to allow each member to take advantage by withdrawing a lump sum amount. A perfect example can be a chit fund or chitty that runs on the same ROSCA model that gave financial freedom to traditional African women who couldn’t access formal capital markets.
The ROSCA model is more than a century old and was earlier only accessible to fewer lower-income groups. But now, digital transformation has led to financial inclusion of the ROSCA model – a big step towards social inclusion if not the ‘silver bullet.’
In this article, I have highlighted how digital transformation is enabling and will continue to enable financial and social inclusion.
An Increased Pace of Digital Transformation After COVID-19
Successive lockdowns have been put in place by governments around the world to stop the spread of coronavirus. While confinement and minimal interaction suddenly became the new theme, the world didn’t stop. To sustain daily lives and stop the economies from crashing, people turned to digitisation.
The digital transformation brought about by the COVID-19 pandemic has been huge. Be it work, communication, finance, shopping, socialisation, or entertainment – the ideal and the most popular venue for almost every activity today is the World Wide Web. The internet has brought people together, and in the process, also expanded opportunities for financial inclusion of the ROSCA model. What contributed to this success was the acceptance of many informal funding organisations as Miscellaneous Non-Banking Companies (MNBCs). And digitisation has further made MNBCs more accessible than ever.
Affordable Internet Access
While advancements in digital and social progression created opportunities for people to reap financial and social benefits, the risk of exclusion and inequality was still a major concern. No one should be left behind. And to make this possible, governments are consistently addressing the barriers that certain groups are still trying to overcome. Improvements in terms of internet accessibility cost have been seen worldwide, thanks to some great accessibility schemes, including:
- Per GB costs in mobile devices
- Affordable entry-level plans
However, almost 50% of the world’s population is still offline. To overcome this digital divide, the International Telecommunication Union and its members have created an agenda – Connect 2030 – that supports ITU’s role in providing internet access for ‘all.’ It most certainly will prove to be a huge step in achieving digital inclusion.
A Holistic Approach With All the Stakeholders
To ensure that ICT (Information and Communication Technology) benefits everyone, including the most vulnerable, The UN Secretary General’s Roadmap guides all stakeholders to create a secure and more inclusive digital world (additionally benefiting people seeking financial support from MNBCs). This would include developing ICT skills and content. Moreover, a focus on strengthening existing platforms, including the UN Internet Governance Forum, would also be an important step in creating a more inclusive society.
Multi-stakeholder partnerships are being actively encouraged to address the complex needs of the vulnerable and lower-income groups as we move closer to complete digital transformation. Further, to ensure affordable internet access worldwide by 2030, governments will promote ICT infrastructure accessibility, skills training and literacy, affordability, and an awareness of the need to go online.
Rapid digitalisation has made way for the financial inclusion of underserved communities. But there’s still a long way to go when it comes to social inclusion.
However, with a simple analysis of the ongoing efforts and recent agendas, we can be sure that an equitable, resilient, and more inclusive society will be the future.
Related: The Connected Experience for Asset Managers and their Advisor Clients
Author Bio: Aatish Khanna works with the Content Marketing team at Money Club - a digital chit fund platform that makes saving, borrowing, and investing your money more efficiently. He writes on topics to help his readers understand processes so they can make better financial decisions. He's the go-to person that his family, friends, and colleagues turn to for all their money matters. He loves to play board games and aspires to one day build his one finance-related board game and app.