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Cash will no more play a part whenever we talk of digital finance extending its reach and helping build a more financially inclusive society. Yet the biggest hindrance for increasing access to the poor in particular is that more often than not the people we are trying to reach via our digital finance products are individuals with limited literacy skills. More often than not the products are designed without taking this into consideration and end up being of no use for the segment of the target population these products are targeted.

Yet in helping to expand the financial inclusion across a wider range of society, cash can play a vital role. As cash can makes large numbers accessible to illiterate and semi-illiterate individuals. This can prove to be a great help as many illiterate individuals around the world face difficulties while reading large numbers. This is because most of these people with little or no formal schooling are not aware of the set of arithmetic rules that determine how digits are in a number like 6,030 or 325,000, how many zeros it has, and where those zeros are placed. All this makes the understanding large numbers extremely difficult, let alone entering them in to a payment app.

So how can Cash help? Well in societies where money is norm and literacy is not, cash seems to be functioning as an intermediate counting and calculating tool that builds on spoken number, and does not rely on written arithmetic notation. As cash enables more people to be fluent in bigger numbers, it may be a key cognitive gateway to financial inclusion.

For the literate population it is hard to understand the illiterate people’s adaptation to counting and calculating, without knowing arithmetic notation. Those against the use of cash highlight that most of these illiterate individuals do not completely trust cash as a store of value. With cash being susceptible to all sorts of calamities such as theft, loss, destruction by natural disaster etc. so in order to safeguard their cash, these individuals are quick to convert these into cows or building materials etc.

The solution is to design better versions of digital cash, which are safer and easier to understand.  This can be done through:

  • Visual representations of local cash denominations can be integrated into any mobile transaction. Any phone with the capacity to generate simple images can generate recognizable cues for the various denominations. The “smarter” the phone, the more intuitive the process can be.
  • Agents can display posters in their facilities that link cash quantities to arithmetic notation.
  • Agents can also provide spaces where their customers can use “play money” to support their calculations. Oral users need to feel confident that they will be able to complete their work correctly and unrushed.
  • Cash/image-based ledgers and passbook apps can be developed for savings groups and other informal financial groups.

Only if we ease the integration of semi-illiterate and illiterate population into the formal sector can we truly achieve the goal of wider financial inclusion.

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