Today’s world is filled with a wide range of modern conveniences such as online banking and the e-commerce industry. However, it may be surprising to know that nearly two billion people are part of the unbanked population. These are individuals who do not have access to traditional banking services, and are therefore financially excluded from the rest of the world.
The first thought that might spring to mind is that this population is living below the poverty line, and this is indeed true for the 59% who are living on less than $5 per month. This percentage, like most of the unbanked population, can be found in low- and middle-income emerging markets.
MicroMoney, a blockchain-based credit bureau and loan provider, began investigating this type of financial exclusion and found some surprising results. Working in the poor countries of Cambodia and Myanmar, the platform found that 75% of their unbanked clients earn $200 per month, which is more than the average salary of $150. In addition, some of these individuals own property and have stable employment. Also, 30% of these clients have their own business.
These results show that the reason these clients are unbanked is not due to poverty, it’s that they operate only with cash. Because of this, they do not have any type of credit history. The traditional banking models, however, require some type of history to grant loans or other services. This basically means that the banks cannot help these clients who can actually afford to settle a loan.
In addition, these banks require extensive paperwork, collateral, and certificates. After getting all of the requested documentation, the would-be lender then has to spend time following the banks’ procedures without even being sure that their loan will be approved.
MicroMoney aims to drastically improve this old method of rating creditworthiness. All the client needs is their smartphone, and the platform’s app. Using complex AI algorithms and Big Data analytics, MicroMoney will be able to determine credit ratings in as little as 15 minutes, no paperwork required.
By using this tool, this unbanked population will transition into a state of financial inclusion in a seamless way. In addition, the extra money that they receive will improve their overall quality of living.
With the world’s digital footprint growing bigger every day, it is imperative that the outdated methods of providing services are changed. Not only will this make more of the population financially secure, it will greatly contribute to the global economy as well.
Disclaimer: Live Bitcoin News does not endorse this publication, not any of its members are associated with it. Readers are recommended to research on their own before making any investments in any company.