Global fintech and funding innovation ecosystem

Peer-to-Peer Finance and the Empowerment of Marginalized Communities

Guest Post | March 28, 2023

Financial inclusion and civil rights - Peer-to-Peer Finance and the Empowerment of Marginalized Communities


Since the 1970s, global finance has seen significant changes that have impacted millions of people. The development of mobile phones and other technologies has enabled new ways to make and manage payments, invest money, and take out loans. But not everyone has been able to benefit from these technological advances. In particular, marginalized communities often lack access to financial services that can help improve their lives.

The importance of financial systems

The importance of financial systems is often overlooked in the development community. While there have been many innovations in technology and business models, we've failed to keep up with the rapid pace of change in the financial sector. As a result, millions of people still lack access to essential banking products and services, and even more so if you look at those living on less than $2 per day.

What's most alarming is that this trend isn't new: it has been going on for decades. In fact, according to data from the World Bank Group's Global Financial Development Database (GDFD), only 1% of all adults worldwide had access to formal savings accounts as recently as 1990 - a number which rose by only 3 percentage points over two decades later!

But why does this matter? Well for starters: economic growth depends on investment; investment depends upon adequate capital. Adequate capital comes from savings...and so forth down your basic supply chain until eventually, we arrive at our desired outcome: poverty reduction through sustainable growth.

There are many reasons why this is the case, but perhaps one of the most important is that people who lack access to basic banking services are less likely to save money. Integrating these individuals into financial systems through microfinance institutions (MFIs) is a proven way to improve their livelihoods. In fact, it's been shown that when someone has access to the credit they can invest in education or small businesses which helps them escape poverty. But there are also other benefits, such as improved health and nutrition outcomes for children.

In conclusion, financial systems play a crucial role in reducing poverty and promoting sustainable economic growth. While progress has been made, we still have a long way to go, especially when it comes to reaching the most vulnerable populations. By integrating them into the formal financial sector through microfinance institutions and other innovative models, we can help lift them out of poverty and improve their overall well-being. These efforts are not only essential for achieving our development goals but also align with the values of social justice and equity, which have been at the core of many social movements throughout history, including the civil rights movement. Therefore, it's important to continue advocating for policies and programs that promote financial inclusion and empower underserved communities. Scholars and students can further explore the impact of financial inclusion on marginalized populations by writing a civil rights movement paper, examining the role of economic empowerment in advancing social justice.

Marginalized communities

One of the most common examples of marginalized communities is that of women. Women have been historically excluded from the formal financial sector, due to their gender and other factors such as age or race. The reasons behind this exclusion are many: they're often disadvantaged by having less education than men and being unable to work outside the home; they face higher rates of domestic violence; they may be unable to travel alone or perform tasks requiring physical strength (such as carrying heavy loads) because it could put their safety at risk. They might not have access to traditional banking systems in their country because there isn't one nearby where they live, or even if there is one nearby, it may be too expensive for them since these services tend not only cost more than what poorer people can afford but also require documentation like proof-of-residence documents which can be difficult for undocumented refugees who've fled war zones etcetera...

It's easy to see how many women in the world are excluded from financial services. And it's even harder to imagine the impact this has on their lives. Without access to banking services, they can't save money or invest in assets like houses and businesses. This is especially true for women living in developing countries where labor laws often exclude them from formal employment opportunities.

Social and cultural barriers to financial inclusion

There are a number of social and cultural barriers to financial inclusion, including:

  • Lack of trust in financial institutions and services. Many people feel that banks are only out to make money at their expense, and they're right! Banks are businesses that need to make profits by charging fees on their customers' accounts. As such, they often don't care about your needs as much as they do their own bottom line, and this is especially true when it comes to marginalized communities where there isn't much profit potential (e.g., lower-income families).
  • Lack of financial literacy among marginalized groups: People who live below the poverty line may not have gone through any formal schooling themselves. If so, then chances are good that no one ever taught them how money works or why saving for the future is important, or even how credit cards work! These individuals often don't know what questions ask when looking into different types of loans/credit options either because no one ever explained them before OR because this information isn't readily available online unless you know exactly what terms mean beforehand which makes things more difficult still since most people aren't going through any kind formal education system until later stages in life so...

How peer-to-peer lending can help marginalized communities access finance

Peer-to-peer lending can be used to help marginalized communities access finance and build their credit history. In addition, peer-to-peer lending can also be used to help marginalized communities build their savings.

See:  So what is financial exclusion in the era of Open Finance?

For example, let's say that you're a member of a community that doesn't have access to traditional banks or credit unions because there aren't any nearby branches or ATMs. In this case, peer-to-peer lenders may be willing to provide you with an alternative way for them to get loans--and as long as you have good intentions behind your borrowing (i.e., no intention of defaulting), then these platforms will work with individuals like yourself who might otherwise be denied by traditional financial institutions due solely based on where they live rather than anything else!

Improving access to finance is a crucial development objective in many countries.

Improving access to finance is a crucial development objective in many countries. Financial inclusion is the ability of people to access and use financial services, and it's been recognized as one of the key tools for reducing poverty, and inequality, and improving the lives of women.

It's also important that we understand what drives people who don't have bank accounts or credit cards, people who fall outside traditional models of banking - to seek out alternative forms of financing.


We hope this blog post has given you a better understanding of the importance of peer-to-peer finance and its potential role in improving access to finance for marginalized communities. As we have seen, there are many barriers to financial inclusion that need to be addressed through innovative solutions like P2P lending.

NCFA Jan 2018 resize - Peer-to-Peer Finance and the Empowerment of Marginalized CommunitiesThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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