Social Finance & Solidarity

Being excluded is not fun. Traditional financial institutions were created to serve the rich – often leaving poorer, less educated individuals unbanked or underbanked. Social finance and fintech have the potential to democratize wealth creation by widening financial inclusion for these groups through digital platforms and mobile banking, but only if the system is designed for the collective good, instead of for individual profit.

In investing, inclusion should not just be an afterthought, but a starting point that shapes where the capital is focused on – impact, insurance, health, and other everyday issues that contribute to access to dignity and opportunities. However, we’re not actually going to change the outcomes of the investment ecosystem if we don’t change the people who are doing the investing or the vehicles used to deploy capital. 

For example, the limited progress in funding women founders in Australia despite years of support programs and advocacy illustrates how a system can absorb good intentions without changing its underlying mechanics. If the same investors use the same vehicles and fund structures that they always have, the system will only reproduce itself. Empowerment has to mean more than just proclaiming that we're trying to empower people or support them. We have to actually play with some of the building blocks of the investment ecosystem to decide and change the fundamental decisions within that ecosystem.

We all want to invest for good, but how do we integrate that into our decision- making? Historically, financial analysis has been viewed very separate from character and the other qualitative aspects of it. How is the whole concept of social equity and inclusion integrated into our process?

This is where we see the role of platforms – one of the simple but profound things that platforms tend to do is fractionalize the risk so that everyone is able to take the fraction that they feel comfortable with. The current market does not allow for this diversity, so it ends up only catering to those who can meet the significant minimum investment cap. New models and platforms can help by fractionalizing risk and pairing choice with trust through syndication leads and character-based human due diligence instead of mere financial.

Wealth creation is an opportunity that should be available to all, even those with no capital. We always use the term “unlocking capital”; what we need to do instead is unlock the systems for access to all, and not just a selected few. Because when we all win, we all win.