In the early 1990s microfinance gained traction as a means to provide loans to economically disadvantaged or low-income entrepreneurs and small businesses lacking access to credit. Over time, microfinance has come to include other financial services such as insurance, savings, and transfers, and has expanded into more complex and inclusive systems. These financial services have not only helped the poor to build businesses, but have also assisted them during times of personal emergency and natural or man-made disasters. Although microfinance institutions (MFIs) have demonstrated growth over the past decade with the number of global borrowers growing annually between 13 percent and 15 percent, two-thirds of adults in the world still do not have access to a bank account. A Financial Inclusion XPRIZE would provide poor and vulnerable populations with greater household welfare, and support economic growth.
The Financial Inclusion XPRIZE will require that teams build a financial model as an alternative to microfinance that also provides economically disadvantaged individuals, households, and businesses with access to a range of financial services. The winning solution will benefit a significant number of individuals, households, and businesses across TBD geographic regions in order to demonstrate widespread accessibility and scalability. Solutions will also be judged according to their referral rates and their ability to reduce transaction costs and interest and default rates. A Financial Inclusion XPRIZE will ultimately help spur innovative solutions that provide accessible, equitable, and sustainable financial security for a more prosperous global society.
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