Page 237 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Figure 6 – SHF finances

#3 – Digital liquidity also requires digital lending

Figure 7 – SHF borrowing

There are other financial flows to consider beyond income and expenses: loan disbursements and repayments.
Credit is essential to the BoP since cash flow tends to be very uneven. Crop sales provide a much needed
inflow but the BoP needs money for seeds, fertilizer, and daily living expenses until they can harvest. To fill
the financial void, the BoP borrows from many sources: friends, family, advances from agriculture traders, and
MFI loans. The commercial SHFs in the diaries borrow the most, possibly because more of their income and
expenses are associated with seasonal agriculture.
Using eMoney for receiving and repaying these loans is important for digital liquidity. If an individual receives
a cash loan, they are likely to use that money as cash. They have little incentive to cash-in, thus bypassing an
eMoney lifecycle – e.g., the individual does not use eMoney at a local merchant who would later use that

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