MindBullets are a fantastic series of content from the FutureWorld group. Essentially they're news articles written from the future, showing us examples of just how quickly our world is changing, and where it might take us. Explore further MindBullets here or read more about the FutureWorld Group.
This week we see what happens if the Micro Finance industry gets out of control. In South Africa, micro finance usually involves tacking financial products onto airtime purchases or using mobile wallets to procure products and services without having a bank account. Let's not kid anyone - from a technology reach perspective, it's a bloody exciting business. And it's extremely profitable.
Any mobile graph you look at will show you the South Africa still has double (or more) the amount of cellphone users than bank account holders. That means USSD access to cheap, simple financial products is always going to succeed.
But like most things these days - we need to regulate ourselves. Both morally and mathematically. The biggest problem with micro finance is that the person on the other end of the transaction is just a number, with no credit history and usually no fixed income. While it would be criminal to deny this market access to insurance, credit and bill payment services - who holds the responsibility for educating them on how best to use it?