Inclusive Fintech: How Startups Are Bridging the Finance Gap for Microenterprises

Inclusive fintech startups are early-stage, venture-backed enterprises creating innovative credit products for microenterprises in emerging markets, which holds great promise for the future of microenterprise finance.

This note highlights strategies employed by fintech startups that benefit microenterprises via three core innovations:

1. Improved use of data and analysis innovations.
2. Channel partnerships for reach and distribution that increase convenience for microenterprises.
3. Tailored pricing and loan terms that better match loans to microenterprises' cash flows to limit repayment pressure and risk of over-indebtedness.

The focus note features a range of case studies based on CGAP’s work piloting microenterprise finance products and primary and secondary research, providing an illustrative view of microenterprise fintech models' potential and realized impacts.