Financial Inclusion…Powered by Blockchain
You might be surprised to know that while financial facilities are a basic necessity for people from all walks of life, a sizeable population in the world don’t even have a bank account. In the global financial system, this category is referred to as the unbanked.
According to World Bank data, in 2017 about 1.7 billion adults in the world remained unbanked, a slight decrease from 2 billion in 2014. This is hard to believe, because money makes the world go ‘round, and banks are doing the pushing.
The Battle Against Financial Exclusion
Financial inclusion may have felt like a dream for many, especially those from the rural and low-income segment of society, but not anymore. The power of blockchain transcends the physical limitations of the conventional financial system and now…can bank the unbanked.
With blockchain, promoting financial inclusion has become a bit more possible. Its decentralised nature can be the perfect enabler for those that are side-lined by centralised systems, mainly due to a lack of credit history.
If a person has no access to financial services, of course they’re unlikely to have a convincing credit history. How exactly can a person be blamed for this and deprived of facilities that can potentially help uplift their social status, right?
A New Dawn with Blockchain
Beyond just cryptocurrencies and tokens, blockchain is beginning to flex its cryptographic muscles in many industries, none more so than finance. This is helping financial inclusion become a reality.
Blockchain is set to change the lives of the unbanked and breathe new life into old school processes, transforming the financial landscape with crucial breakthroughs such as:
- Eliminating intermediaries to make spending and sending money, especially cross border remittance, more affordable, faster and easier
- Providing transparency and traceability on fund distribution and usage to eliminate corruption and malpractices
- Getting rid of demands for absurd amounts of documentation – traditionally a favourite hobby of banks – and, instead, having your entire credit history legit recorded on a blockchain
- Providing real-time monitoring of transaction activities, thus cutting down the probability of errors or delays
- Enhancing safety and security for issues that previously plagued financial institutions such as data protection, money transfers and vulnerability to hacking
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