Once a person of little means is trapped into debt, often incurred to subsidise day to day living, escape becomes near impossible. A whole industry has sprung up to ensure the debtor pays the lender with complex legal proceedings, debt and administration, debt rating agencies and more, all making money off a destitute poor person who could not service his/her debt in the first place. Such are the challenges of the poor and without access to inexpensive capital, the plight will remain unchanged. The irony is that the poorest either can’t access credit or, when they do, it comes at huge expense, whereas the wealthy have access to limitless capital at very low rates.
Imagine for a second that such a person of little means could have access to capital that does not cost him/her 150% p.a or even more in fees and interest, what a difference it would make. One would be able to finance small tools, seed, equipment and the like and take a step out of poverty.
Imagine the impact on a developing country where SME’s are allowed to get traction and prosper, where failure does not cause lifelong financial ruin and exclusion, imagine the impact on the lives of everybody and the potential to succeed.
Generally, players in the micro finance industry determine the interest rates changed by a mix of the risk, cost of capital, overheads, profit and tax. With the introduction of low interest capital, such lenders are coerced to reduce the rate they charge and to pass the lower interest on to the consumer.
We have partnered with PSI with its unique fintech solution that limits the debt risk exposure of an individual and this makes credit rating agencies, debt collectors and legal processes to collect debt obsolete. A true step into the future of financial inclusivity supporting and driving OFI’s vision and corporate philosophy, to become a catalyst for change not only in Africa but globally by spearheading true financial inclusivity. Our ambition is to create a bridge between under-banked, formal sector employees requiring finance and the formal financial sector providing these financial services.