“Fully 2.5 billion of the world’s adults don’t use banks or microfinance institutions to save or borrow money, but unserved doesn’t mean unservable.” – McKinsey&Company
Consider Banking the Unbanked
There are about 10 million unbanked or underbanked families in the US alone. More than 50% of the population in developing countries is unbanked. This large swath of people does not have the technology for being included in the banking system.
As no central entity is required for Bitcoin transaction and use, it can be a boon for the unbanked. Bitcoin doesn’t require an intermediary and hence its users do not need a bank account to avail the benefits. It has the additional advantage of not being tied to a rigid regulatory body.
Bitcoin cuts through the Redtape
With no background check, age and account fees, banking with digital currency has the advantage of bringing the unbanked population to the same platform as that of the banked ones.
Having said that, analysts believe Bitcoin adoption by the unbanked population could take time. As the global nature of Bitcoin is discovered and understood, opportunities for insuring, saving and participating in internet commerce for millions around the world will become a plebeian reality.
Counting the world’s unbanked
Fully 2.5 billion of the world’s adults don’t use formal banks or semiformal microfinance institutions to save or borrow money, our research finds. Nearly 2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East. Unserved, however, does not mean unservable. The microfinance movement, for example, has long helped expand credit use among the world’s poor—reaching more than 150 million clients in 2008 alone.1 Similarly, we find that of the approximately 1.2 billion adults in Africa, Asia, and the Middle East who use formal or semiformal credit or savings products, about 800 million live on less than $5 a day (Exhibit 1). Large unserved populations represent opportunities for institutions that are able to offer an innovative range of high-quality, affordable financial products and services. Moreover, with the right financial education and support to make good choices, lower-income consumers will benefit from credit, savings, insurance, and payments products that help them invest in economic opportunities, better manage their money, reduce risks, and plan for the future.
The unbanked are not unservable
Serving adults who live on less than $5 a day is not only possible at scale—to a large degree, it is already happening.
Published by IHB.IO