Organizations working on financial inclusion often grapple with the question: how to get a large number of low-income individuals and families access to financial services?

For the Bill & Melinda Gates Foundation, the answer is digital.

There are roughly 2 billion people in the world that don’t have access to formal financial systems. So that’s our broad remit. And our view is that the only way to deliver low-cost, valuable products to the poor at large scale is if it’s digital,” said Michael Wiegand, director of the Financial Services for the Poor strategy at the Gates Foundation.

Low-income individuals and families who don’t have access to formal banking systems often opt to borrow from friends or neighbors in the face of financial hardships or invest in things such as livestock as a form of saving mechanisms. But Wiegand said these are “not the most efficient and liquid instruments for them to use.” They can, in fact, be insecure sources of financing in events when the main income earner in the family gets ill, for example, or in the advent of a disaster.

Read the full article by Jenny Lei Ravelo about digital finance from Devex International Development