How would your life be different if you couldn’t have a credit card?
My Nepali co-worker and I are both heading to Sri Lanka in a few weeks. Yesterday he asked me for help applying online for visa on arrival. It’s easy, I said, $20 and you’re good to go.
Well it turns out that very few Nepalis have access to USD credit cards because most require a banking balance of $3,000, and services like Sri Lanka’s visa application process ONLY accept USD credit cards.
In the end I had to use my card for him, a situation that was humiliating for us both….
Him, because a talented man with a salaried job is denied access to basic global credit and has no choice but to ask me for help.
And me because of the privilege of being born in a society where even teenagers with no skills get massively easy access to global finance. It’s even worse than hitting the jackpot…. to do that you have to be willing to take a gamble. All I had to do was be born in the right place.
What will it take?
According to the World Bank (2012), more than two billion people around the world cannot access regulated financial services. Changing this will require five things:
- Valid IDs in countries where issuing national identity cards is a hugely political issue.
- Training and education to reduce the likelihood that consumers will make smart credit decisions.
- Consumer protection and regulation
- Special inclusion to ensure access for women and marginalized groups
- The ability to choose to have salaries deposited directly into bank accounts linked to credit cards.
All of these require high levels of buy-in, reform, and change within local governments — which is a major reason why so many continue to be denied this access.
Of course, for the world’s poorest people a credit card is the least of their worries — fresh water, access to basic education, getting enough to eat are more important. But for the hundreds of millions of working professionals around the world who are connected through the internet, who contribute at high levels to GDP and intellectual property, this is a major challenge. It’s very difficult to talk about resilience, entrepreneurship, and even something as basic as the ability to plan for your family and your future, without talking about access to simple financial tools.
The World Bank is actually putting up $8 billion into programmes to support financial access and inclusion, and it’s about time. It’s been 35 years since the World Bank — which was founded by the world’s great financial powers — shifted its focus to addressing development in countries that were falling behind. Helping individuals who are already participating in our connected, globalized world also get access to basic financing is an idea whose time has come.