A unique alliance of over 50 fintech investors and digital finance innovators have launched new investor guidelines aimed at spreading the benefits of the fintech revolution more widely on June 20.
Innovations in digital technology have created new opportunities to reach unbanked and underbanked low-income customers in emerging markets as well as developed countries.
While the opportunities have increased, so too have the risks surrounding digital financial services for investors, investees, and customers. An example is the rapid growth of digital lending products, some of which carry risks of overpricing and over-lending to customers.
One factor that is holding back investors is the lack of a framework to help them evaluate these risks. The guidelines will enable investors helping them recognize the opportunities and points to consider and mitigate risks.
Any investment organization can subscribe to the guidelines and join the community of investors. The guidelines are not new rules or regulations, not a law, not red tape. They are a voluntary framework that organizations can sign up to and use as guidance when they invest in responsible digital financial services.