Research & Analysis

Money, Decisions, and Control

While mobile money services like M-Pesa and other digital tools such as Flexipay and MChanga have already made inroads in financial inclusion, even newer advances in digital technologies and the increased availability of data can be used to support low-income customers to do more than make payments. These advances can help them to make financial decisions and develop strategies to manage their finances.

Beyond payments, finance is about day-to-day money management. It is about making financial decisions and devising coping strategies to deal with shocks and cash-flow gaps. Low-income people make decisions and devise strategies around their finances just as much as, if not more than, high-income customers do. Despite this, most financial services for poor people focus on digitizing their payments accounts as a pathway to financial inclusion and do not address other needs.

By understanding how low-income people focus on and prioritize their finances and cope with life events, you can build services that better support them in their financial planning, even before they send payments to each other. This paper uses examples and illustrations to highlight the salient characteristics of low-income customers’ financial decision-making and strategies. It presents three emerging principles that can guide you in developing innovative new services. The paper also offers prototypes and tips on what these services may look like as you leverage the digital technologies at your disposal. 

Principles for a Customer-Centric Approach

Relevance trumps simplicity. It is a fallacy that your customers have trouble grasping non-tangible concepts of money, such as digital money. Rather, they are not sure how the financial services you offer can help them—it´s a question of relevance. Low-income people have complicated lives that include managing their finances through informal instruments, which they use because they seem to work well. 

Tools not products. Low-income customers are likely to appreciate a range of useful tools that they can use in many circumstances. Financial products should not be customized to the point that they do not have a broad appeal.  Don´t alienate your customers with rigid rules and precise labels. Invite them to engage their imaginations.

Finance is neither an independent exercise nor is it unchanging. Connect financial services to your customers’ most important relationships. Help your customers to set deadlines and rules for themselves, but recognize that they will need to recalibrate their rules when their circumstances change.

Financial services providers can apply these principles to help them target the large low-income population in developing countries. The principles will help you to re-invent offerings that are relevant to low-income customers. 

Related Resources


Financial services providers for low-income customers typically believe that their business case is based on expanding the number of accounts or the number of transactions made by these customers. This is only part of the equation to business success.