Fintech Can Be The Unbanked’s Best Hope For Financial Inclusion

TECHINASIA: If you had asked anyone in the region about fintech just a couple of years ago, you would have been met with blank stares – and not the eyes-glazing-over kind that some people get when someone mentions finance. Today, it’s the fancy, shiny sports car that just pulled up in the town square; it’s all everyone seems to be talking about, and they’re all wondering if they can hitch a ride.

There’s a lot to be said about fintech’s different applications; from peer-to-peer lending, to micropayments, to Bitcoin and blockchain wallets and marketplaces, the possibilities are as diverse as the average person’s financial needs. To put it simply, there’s something for everyone. Or is there?

Fintech is well placed to give the current financial system a good shake up, that much is true. However, there is a large number of people around the globe that are not even part of that system. These are the so-called unbanked. Their number is about two billion adults in 2015, according to the World Bank’s estimates.

The unbanked have no access to banking services and institutions that developed countries take for granted. They don’t have bank accounts, they can’t apply for loans. They use cash for their everyday transactions and their savings account is their mattress. A credit card is little more than a colorful piece of plastic, as far as their immediate needs are concerned. But the whole point of fintech is that it works differently than traditional financial institutions. Being smaller, nimbler, and innovative, fintech startups can reach those people in ways that banks never can.

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