It may be hard to believe, but two billion people in the world still have no account in bank. Most of them live in low- and middle-income emerging countries, but even in high-income countries, a large number of people can not use banks to meet their daily financial needs. This means that they do not have access to the convenience, security, and interest that the banks provide.

In addition, many people have access to a bank account but do not have adequate access to the financial services that banks can provide. These people are known as underbanked. Even in the United States, for example, 33.5 million households were recognized in 2015 as unbanked or underbanked, or more than 25% of the population! Without access to savings and credit, these people can not participate in the virtuous cycle of economic growth, instead of remaining in a vicious circle of poverty.

Clearly, unbanked and underbanked people are an important market. served by existing institutions. In the third world, the big banks do not want to give credit to the less well off. Even when they do, they charge very high interest rates to offset the risk. For a while, microfinance institutions have provided a means for underbanked people to access much needed credit, but in recent years large banks have started to participate in microfinance. In the process, the interest on microfinance loans has increased dramatically and is becoming a major pain point for unbanked people.

The Blockchain to the Rescue

Blockchain technology has the potential to help unbanked and banked people by enabling them to create their own financial alternatives in an efficient, transparent and scalable way . One of the biggest challenges facing banks when they try to serve unbanked people is that many of them do not have any information from them. clear identification, making it difficult to implement Know Your Customer practices.

With Blockchain, individuals can receive a digital identity to use in their banking transactions. Property rights, which are a painful point for many low-income people, can also be transferred to the Blockchain, allowing them to enter official information networks and even take advantage of their property. warranty. And by making painless and efficient remittances, Blockchain could enable low-income people in different countries to save and lend together.

The countdown began

The countdown to a future without started. For example, let's take a few Ethereum-based Blockchain projects that have made their main service to the unbanked and sub-benches.

OmiseGo technology allows the exchange of peer-to-peer values ​​and payments with the help of a digital platform. They aim to encourage financial inclusion in emerging markets by creating a platform that other companies can use. Their network claims to decentralize market liquidity and highly scalable payments and help resolve payments on new electronic payment networks. This could become important because, if successful, it would allow unbanked people to control their financial lives and access previously unavailable financial services.

WeTrust: Their Trusted Lending Circle product (now in beta) would allow users to create rotating credit and savings associations in the Blockchain. Benefiting from the finality and transparency provided by Blockchain, this instrument could be considered as a springboard for individuals to build a credit rating powered by Blockchain

Humaniq combines Blockchain and Biometrics to create applications that would allow transactions and investments. Third World. Platform users could earn tokens at home, using bio-identification procedures, and exchange these tokens for local currency in an application. Basically, those without formal identification could have the opportunity to create a digital bio-identification directly from their smartphones.

Towards a More Financially Inclusive Future

Even simple things like building savings or receiving a loan can be difficult for those who can not access the security and convenience of a bank account. These unbanked individuals constitute a vast market ready to adopt disruptive financial solutions outside the traditional banking system. Blockchain provides a secure and scalable way to meet the needs of these individuals, and a number of technology companies exploit it to pave the way for a world in which everyone has access to savings and credit , an essential element of economic growth.