Forbes India 15th Anniversary Special

Stellar and PwC Create a Global Financial Inclusion Framework for Emerging Market Blockchain Projects

The framework recognises factors that contribute to financial inclusivity of products and services and the associated challenges are context-dependent

Shashank Bhardwaj
Published: Oct 6, 2023 12:20:15 PM IST

Stellar and PwC Create a Global Financial Inclusion Framework for Emerging Market Blockchain ProjectsImage: Shutterstock

The consultancy firm PricewaterhouseCoopers (PwC), under the commission of The Stellar Development Foundation, has created a global financial inclusion framework (“The Framework”) to assess the factors contributing to financial inclusivity. It targets companies and institutions in the emerging markets, particularly those with upcoming blockchain projects. 

The framework outlines a structured four-phase assessment process that projects must follow to address financial inclusion challenges. Firstly, it involves defining the assessment’s scope. Secondly, it requires an analysis of the target population. Thirdly, it entails assessing how well the solution aligns with value parameters and identifying gaps. Finally, it prioritises identifying gaps based on their importance to devise effective strategies. 

After completing these four phases, assessors will be able to comprehensively understand the financial solution’s strengths and weaknesses in promoting financial inclusion.

The value parameters underlined in the framework help in determining how well a financial solution fosters financial inclusion. These value parameters are grouped into four dimensions: Access, Quality, Trust and Usage. The first three dimensions are used to measure inclusion, while the fourth dimension measures a solution’s potential impact. Each of these parameters is further broken down into subcategories, which are then assigned a level from 1 to 4 based on how well they meet the target audience’s needs.

This framework is being used to help financial solution providers in Argentina, Colombia, Kenya, and the Philippines. In 2021, the Philippines had notably lower financial inclusion rates than neighbouring East Asia & Pacific countries. Conversely, Kenya demonstrated higher financial inclusion rates than neighbouring Sub-Saharan nations. Colombia exhibited lower financial inclusion rates among Latin American and Caribbean countries. In contrast, Argentina’s overall financial inclusion rates were similar but faced challenges in various demographic and economic aspects compared to regional peers.

The study also observed that blockchain-based solutions improved access and quality of financial services for underserved populations in various scenarios. The lack of trust in traditional and blockchain-based financial solutions was a significant obstacle for people to open an account with a financial institution. However, blockchain’s drawbacks in this aspect were mainly due to insufficient disclosures and inadequate corporate governance. 

Stellar and PwC’s global financial framework aims to provide a structured approach to the financial service providers for assessing and enhancing financial inclusivity. If this framework is followed, these businesses will be expected to better understand their social footprint and help drive sustained business growth and economic development. 

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash