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July 24, 2014

Bringing Financial Services to Illiterate Populations

By Zachary Seaverns

Recent work from CGAP and Continuum Innovation in Pakistan calls extreme illiteracy a “hidden hurdle” to financial inclusion. When people are unable to read or understand digital transactions they are less likely to trust digital products, constraining a viable avenue for access to financial products. In many cases illiterate people have to rely on an agent to complete their transaction and many remain wary of such services. The scale of this challenge is immense: UNESCO estimates the worldwide illiterate population at almost 800 million.

Many researchers have proposed ways to make financial services, and digital financial services in particular, more accessible to illiterate people. One idea comes from Woldmariam et al., who propose a new user interface that allows mobile money users in Ethiopia to identify currency notes on screen.


Photo credit: Renuka Motihar for American Center Mumbai

Although the idea is interesting, increasing access to digital financial services also means working with the technology available to the intended end users. As of August 2013, Ethiopia’s mobile-phone penetration rate was around 25%. Combined with a 2.5% internet access rate, this data suggests even lower smartphone penetration. Woldmariam et al.’s concept relies on phones that can render complex images and respond to swiping gestures; the study uses an iPhone mock-up as an example. While smartphones could become ubiquitous in Ethiopia someday, most of the impoverished and illiterate population living in Ethiopia today have, at best, access only to basic text-based handsets.

To be successful, new digital products must adapt to the circumstances and capabilities of their target consumers. This means putting illiterate individuals at the center of the design process so that the products will work for them. In Pakistan, CGAP and Continuum used in-depth focus groups and human-centered design techniques to make ATMs more accessible for those with no literacy or numeracy skills. They found that photographs showing steps to use a device proved highly effective because they are literal and leave little room for miscommunication.

These two projects are an interesting illustration of how the design approach for a particular intervention shapes its feasibility. Improving financial inclusion and trust through technology is ultimately a human challenge, which requires user interface designers to consider access to technology and technological ability.

A new discussion paper from GSMA on smartphones and mobile money is optimistic about the potential of digital financial inclusion efforts based on smartphones: “Devices are getting cheaper, global alliances are advocating for affordable data access, and mobile operators are investing to develop necessary network capacity and pricing models to manage the inevitable transition from feature phones to smartphones.” Even so, the paper acknowledges that it may still take many years for a billion or so of the world’s poorest people to access the benefits of mobile data and smartphones: “Material gaps remain in mobile penetration and coverage, particularly in markets where financial exclusion is most acute.” Human-centered design can help create suitable services for the last billion, many of whom lack sufficient literacy and numeracy skills.

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