Guest Articles

November 12

Kenny Orisanaiye

Local Context Matters: Why Localization is Key to Accelerating Financial Inclusion in Africa

Many consider financial inclusion to be one key to reducing poverty and achieving inclusive economic growth in Africa and other emerging economies. Mobile technology has proven to be an inexpensive tool for broadening this access, by delivering a range of financial services to places where physical infrastructure is lacking. M-Pesa is a classic example: Before its launch in 2006, only about 26% of the adult population in Kenya had access to formal financial services. But 10 years later in 2016, the rate of formal financial inclusion in the country had increased to over 75% of the adult population.

However, despite this progress, financial inclusion efforts in Africa still face considerable challenges: For example, around 56% of adults in Nigeria were still unbanked as of last year. And the continent’s cultural diversity presents a key obstacle. Africa has several thousand ethnic groups, compared to Europe’s roughly 160 ethnicities. These numbers alone demonstrate the level of variety that technologists need to consider while developing products that are appropriate to the context of the markets they serve.

To accelerate the success of mobile products for unbanked and underserved populations across the continent, providers will need to design innovative solutions to this challenge. And for that innovation to deliver financial inclusion, these products will need to embrace localization. In this context, localization refers to the adaptation of financial products and user engagement content to serve the specific cultural requirements of the African market. Below, I’ll discuss some of the ways African financial service providers can successfully embrace localization in their product design, and some pitfalls they must avoid.


The Importance of Language and Visual Cues

Designing financial products to work in multiple languages is a significant cultural requirement in parts of Africa. In Nigeria, for instance, only about half of the population speaks English, even though it’s the country’s official language. In northern Nigeria, there are more Hausa speakers than English, while Nigerian pidgin is the preferred vernacular in the south. To emphasize this point, Wazobia FM, a station that broadcasts in pidgin, has been recognized as the most listened-to radio station in Nigeria. Across the continent, languages vary by region, country and community, creating a vast tapestry of over 2,000 distinct languages – compared to under 100 languages spoken in Europe.

To leverage this challenge to their advantage, fintech and digital products targeting African users must recognize the potential impact of speaking a shared language with their target customers, particularly in building trust. The advantages of this approach can be seen in the momentum of agency banking, which has proven to be a relatively successful model for driving financial inclusion in the region. This success is arguably hinged on the closeness of banking agents to the end-users: The agents are able to build rapport and trust with customers due to their shared language and culture, and to the fact that they are members of the same communities.

But it’s not enough for a financial provider to simply offer their products or services in a market’s primary languages and expect customers to understand them. Many of Africa’s financially excluded and underserved populations have little or no formal education in their country’s official (colonial) languages, such as English and French. For context, sub-Saharan Africa’s literacy rate stands at about 66%, with countries like Mali having rates as low as 31%. This makes voice technology in indigenous languages an efficient method of localization that can enable providers to connect with unlettered audiences. Interactive voice response (IVR) systems are a good example of this approach. Users can easily call service lines to carry out financial transactions by following voice prompts in the languages they are familiar with. This model is gaining traction in India, where the Department of Posts recently launched a new IVR facility for Post Office Savings Bank account holders which allows them to perform basic transactions with options for English and Hindi.

Beyond voice technology, visual cues are also crucial for the localization of financial technology products. Humans are wired to respond to visual cues, and this informs customers’ usage – and providers’ design – of financial products. For these products to drive financial inclusion among local markets in Africa, however, they need to be locally relevant. For example, to unlettered users in parts of Ghana, the Cedi sign (¢) could better represent money than the dollar sign ($), although the dollar is often seen as a universal representation of money.


Other Local Factors Affecting Financial Product Design in Africa

Other factors to consider when creating financial products for Africa include the lack of internet access and the high cost of broadband in remote areas, and the limited capabilities of the feature phones and cheap smartphones that are predominantly used across the continent. Naturally, financial products that require internet access will be useless in many rural regions where broadband is weak or non-existent. Likewise, financial service apps that require high computing memory space or use up large amounts of broadband data will further exclude customers in these areas. As the web design and development consultant Oliver Lindberg points out, “Lower spec devices, which are more common in emerging markets, have less built-in storage and higher data costs. This means many people can only afford a few megabytes of data here and there.” Fintech companies like Opay and VodaPay are designing around this challenge by building super apps that bundle a suite of services, helping to minimize the number of apps customers need to install on their phones.

It is also critical for digital financial services to provide localized marketing and customer support. In-person outreach like town halls, engagement at local shopping markets or door-to-door meetings can be vastly more efficient than Western advertising methods like billboards or digital ads. Additionally, whether the customer is interacting with a human or a bot, prioritizing customer support through helplines in local languages will create more affinity and lead to better resolutions than, say, email.

As the above-mentioned factors illustrate, local contexts matter in Africa. For financial inclusion to spread there – particularly among informal customers with little or no prior interaction with formal institutions – financial service providers will need to combine innovation with localization in product design.


Kenny Orisanaiye is the Founder and CEO of HollaTags Limited.


Photo courtesy of Simone D.




Finance, Technology
digital inclusion, financial inclusion, fintech, mobile finance