An inclusive financial system allows individuals and small businesses to get easy access to, use, and profit from a broad range of financial services that promote stability, resilience, and long-term financial security.

Working employees can access and control their employment data by quickly sharing records with financial institutions since most financial activities, from applying for a mortgage to giving credit, rely on the employment-based dataset.

Perils to building an inclusive financial system

Many financial institutions cannot fit gig workers/freelancers to their standard underwriting models because of two reasons:

1. The workers’ multiple, fluctuating income streams make it harder to verify income.

2. They struggle to build a credit history.

As a result, gig workers and freelancers are limited by their income level and struggle to avail financial products adding to system-wide financial inequalities.For example, Amreen is a freelancer working for different clients, and these jobs are in demand. She works according to business requirements. The working hours are not fixed, and she only works 20 days a month. In this situation, because people have multiple, fluctuating income streams, it is harder to verify income. As a result, typical employees are denied access to numerous financial products and struggle to establish the credit history necessary to thrive, contributing to systemic financial processes.

How accessible does employment data promote financial inclusion?

The benefits of employment data are a roadmap in exploring the numerous opportunities in the fintech space, which can help build the next generation of financial inclusion in India.

An access to employment history and upgrading the system for sharing employment data can help level the playing field for people from all backgrounds of society, including the majority of the workforce, which consists of gig workers, freelancers, independent contractors, and shift workers.

Once the data is collected, it will reflect the paying capacity of every individual. It will help the financial institutions to determine the amount of money they can lend to a person or set the credit limit.

Also, the Payroll API’s underline the verification of income and employees dataset. It can be regarded as the potential solution to partner with the inclusive financial system by providing innovative products for freelancers, gig workers, or those whose incomes are less.

What are the benefits of building an inclusive finance system?

The importance of establishing an inclusive financial system for society and households cannot be overstated. Individuals and small businesses benefit directly from accessing and using affordable financial products that help them achieve financial stability and wealth, driving overall economic growth. Access to other important economic and social support networks, which are critical to household financial security, is also facilitated by an inclusive financial system.

The message to all public and private financial leaders is clear: now it is the moment to build a financial system that works for everyone irrespective of professionalism. All gig workers; freelancers and small businesses will access financial services and benefit from those products and services, including financial stability, resilience, long-term security, and mobility. This will eventually increase the country’s economy and help people achieve financial freedom.

Tartan’s solution

Tartan enables working employees with varied backgrounds to establish and demonstrate their ability to pay and intent to pay through a standardized employment dataset.