15 June, 2018
Two billion people around the world do not have a bank account or access to a financial institution via an internet-connected device. Although their numbers are decreasing—down 20% from 2011 to 2014, when 700 million adults opened bank accounts worldwide—two billion is still a startlingly high figure.
Since the world’s unbanked people are effectively restricted from the global economy, they must come up with workarounds like being paid wages in cash or only getting loans from family and friends—and managing savings is much more difficult. Having a bank account is almost essential for the founding of businesses as well, so unbanked adults face an uphill battle when attempting to better their financial circumstances through entrepreneurship, for example.
Worldwide, 55% of unbanked people are women. Increasing women’s economic participation via the digitization of payments would go a long way in empowering them to be more financially independent, gain access to the global economy, and take advantage of varied business opportunities. The World Bank notes that “empowering women and girls is a key contributor to economic development,” especially in places like South Asia, the Middle East, and North Africa.
Ultimately, decreasing the number of unbanked people around the world—both men and women—would lead to financial inclusion and thus help to reduce poverty overall.
In developing countries, the mobile money market is growing faster than anywhere else. According to Business Insider, “while only 2% of adults worldwide have a mobile money account, 12% of adults in Sub Saharan Africa have one, half of whom have no other account.” Commercial bank branches are also comparatively scarce in countries with the highest percentages of people solely using mobile phones to send and receive money—which indicates that technology is helping to break down physical barriers to the global economy.
At VeriToken, we believe that everyone should be able to participate in the financial world and have access to a digital store of their personal funds. That’s why we’ve partnered with identity management company Yoti to create digital identities for the unbanked using our blockchain platform. Reaching and engaging the global unbanked population is the first step in empowering them to better their financial lives, which can then have far-reaching positive effects in communities around the world.
Image via Pixabay.