
- 30 January 2025
- Slim Hedi Chekili - AMEF Consulting
- 0 Comments
Digital Financial Services
Introduction
Digital Financial Services (DFS) have become a central pillar of economic development, particularly in emerging and developing economies.
In the field of microfinance, DFS facilitate access to financial services for populations excluded from the traditional banking system, while reducing operating costs.
This phenomenon is all the more significant in countries like Tunisia, where technological advances go hand in hand with a desire to strengthen financial inclusion.
I. Context, Regulatory, Ethical and Social Responsibility Framework
A. Global context for SFNs:
The use of SFNs is part of a global context in which access to financial services is still limited for a significant proportion of the world’s population, particularly in rural or marginalized areas.
Microfinance, which aims to offer financial services adapted to low-income populations, represents one of the most relevant sectors in this context.
Thanks to new technologies, it is now possible to offer a wide range of services, from savings to insurance, simply, quickly and securely, while reducing access costs.
SFNs overcome several obstacles encountered in traditional microfinance, such as lack of physical infrastructure, difficult access to bank branches and high-risk management.
B. The regulatory framework for SFNs:
The development of SFNs requires an adequate regulatory framework to guarantee the security of transactions and protect users.
Regulations must also encourage innovation while preserving the stability of the financial sector.
Several countries have put in place specific regulations to govern SFNs, in particular services linked to mobile payments, digital credit and digital savings.
The regulatory framework for SFNs generally comprises several key elements:
- Licensing and supervision: Regulators must ensure that digital financial service providers comply with banking standards and transparency requirements.
- Combating money laundering and the financing of terrorism: The implementation of electronic identity verification systems is essential to ensure compliance with international standards.
- Consumer protection: Regulations must ensure that consumers of SFNs benefit from redress mechanisms in the event of disputes, and that they are protected against abusive practices.
C. Ethics and social responsibility:
SFNs also raise ethical and social issues, including privacy, data security and financial inclusion.
Users of digital services are often vulnerable, so appropriate measures need to be put in place to prevent customer exploitation.
Microfinance players must also take inclusivity into account, ensuring the transparency of the financial products on offer and promoting a culture of financial education to prevent over-indebtedness.
In addition, SFNs have a significant social impact: they contribute to the financial integration of marginalized populations, but must take care not to reproduce “inclusive finance” models that would be inaccessible to certain bangs of the population, due to digital illiteracy or lack of Internet access.
II. The SFN offer:
SFNs encompass a wide range of financial services designed primarily to promote financial inclusion, particularly for unbanked populations.
The main digital services offered in the context of microfinance include:
SFNs encompass a wide range of financial services designed primarily to promote financial inclusion, particularly for unbanked populations.
The main digital services offered in the context of microfinance include:
- Digital savings and credit
Digital savings and credit platforms are essential tools for providing low-income populations with access to financial services.
With digital services, users can open savings accounts, make deposits and manage their personal finances remotely.
Digital credits, meanwhile, give borrowers access to small loans, often without the need for physical collateral. These services are particularly useful in regions where access to banking facilities is limited.
2. Electronic payments
Electronic payments are one of SFN’s most popular services.
They enable fast, secure transactions, including bill payments, online shopping and salary payments.
The rise of mobile payment platforms such as M-Pesa in East Africa has demonstrated the enormous potential of mobile payments for financial inclusion.
3. Money transfers
Digital money transfers play a key role in integrating rural and remote populations into the financial market.
Money transfer platforms such as Western Union and PayPal enable people to send and receive money quickly and cheaply.
In the context of microfinance, these services make it easier to send funds to beneficiaries in regions where banking infrastructures are absent or inadequate.
4. Insurance
Digital insurance services, such as micro-insurance, are also growing rapidly. These products aim to offer affordable cover for vulnerable populations, such as farmers or informal workers.
These insurances can cover risks linked to health, accidents or crop loss.
III. Development and marketing of SFNs
The development of SFNs relies on a combination of technological innovation, strategic partnerships and marketing strategies tailored to the specific needs of target populations.
- Technological innovation
The key to the success of SFNs lies in their ability to leverage technological innovations to meet the financial needs of excluded populations.
FinTech’s, for example, play a crucial role in creating accessible, tailored digital solutions.
The use of blockchain to secure financial transactions or the use of artificial intelligence to analyze users’ financial behavior enables more efficient and personalized services to be offered.
2. Partnerships and collaboration
Partnerships between financial institutions, telecoms operators, governments and technology companies are key to extending access to SFNs.
Telecom’s operators, in particular, play a key role in providing the mobile infrastructure required for digital financial services.
3. Marketing strategies
The marketing of SFNs needs to be adapted to local specificities, particularly in terms of accessibility to technology and financial culture.
Awareness and education campaigns are crucial to ensure that users understand the financial products on offer and adopt these services.
It’s also important to ensure that interfaces are easy to use, particularly for users with low digital skills.
VI. The Tunisian experience
Several microfinance institutions have launched innovative initiatives to promote digital financial services, in response to technological developments and the need to include a large proportion of the population in the financial system. Examples include:
- Enda Inter-Arabe, one of Tunisia’s pioneering microfinance institutions, has launched several initiatives for digital financial inclusion.
Enda offers loans via digital platforms accessible by cell phone. It has also developed partnerships with local and international companies to facilitate mobile payment, particularly for micro-entrepreneurs.
2. Taysir provides access to financial services directly via a mobile application.
The application facilitates access to loans, money transfer and bill payment without requiring direct contact with a branch, thus reducing costs and time for users.
3. Zitouna Tamkeen has developed digital financial services for its customers, enabling them to take out loans and make payments via digital platforms. It has also integrated mobile payment services, making it easier for rural and remote populations to access financial services.
Conclusion
Although progress has been made, challenges remain in Tunisia, particularly in terms of digital literacy and accessibility. Efforts must continue to ensure better financial education and wider coverage of rural areas.
The adoption of NFS in Tunisia is still limited by technological and cultural barriers.
Digital Financial Services have immense potential to transform microfinance in Tunisia and beyond. However, for this impact to be sustainable, it is essential that industry players take account of ethical, regulatory and social issues.