Let’s face it, not everyone has a bank account or easy access to obtaining one. For this reason, we find a major disconnect between certain communities and banks. This is what draws thousands of people to financial services, such as pawnbrokers, loan sharks and payday loans.
Unfortunately, these services are largely unregulated, which means a lot of people are taken advantage of. However, when left with no other choice, the problem continues to grow.
The good news is blockchain presents a solution to this growing issue. It allows financial institutions to bridge the gap between providers and their services, so it’s easier for individuals to send and receive money.
Banks that are looking to tap into this massive market are heavily considering adopting blockchain technology. In doing so, we may see a major shift in the underserved community towards becoming a more financially savvy society.
Those Without Bank Accounts-
The amount of unbanked people is slowly decreasing, but not fast enough. There’s still a whopping 2 billion people globally without traditional banking services. In India alone, the population of unbanked individuals would make out to be the 7th largest country worldwide.
Then there’s the underserved or underbanked. These individuals have limited access to traditional banking services. For example, the elderly and migrant workers.
Both markets rely on alternative financial services to get by. This typically comes in the form of microfinancing. For instance, mobile payment services and other technological advances that make it easier for peer-to-peer lending.
Blockchain and Bitcoin
Enter blockchain technologies and digital currencies like Bitcoin. Together, these will provide a cost-effective alternative to underserved and underbanked individuals requiring international money transfer services.
Many individuals in third-world countries do work in developed countries and send money back to their home country. Blockchain will make this easier to do.
But this is just a sneak peek into how blockchain will benefit the underserved and unbanked.