Platforms Using Cryptocurrencies Will Change the Lives of the World’s Underbanked

Cryptocurrencies are never far from the headlines. Most of those headlines, however, are about investment strategies, price fluctuations, and how cryptocurrencies are changing consumer behaviour and, as a result, the way businesses operate. The world’s underbanked population, however, rarely feature in articles, expert opinions, or any other cryptocurrency conversation.

Despite this, the world’s underbanked look set to become one of the biggest beneficiaries of cryptocurrency technologies and the platforms built on them — platforms like Checqit.

Who Are the Underbanked?

Underbanked refers to people who don’t have access to banks and other official forms of financial services such as credit cards or loans. As there is a lack of mainstream financial services, underbanked people often have no choice but to turn to alternative forms of finance including borrowing from family members, using pawnbrokers, or getting money from loan sharks.

It is estimated there are two billion people in the world that are underbanked. This is in addition to around 200 million small and micro businesses that also do not have sufficient access to mainstream financial services.

Most of the world’s underbanked population are from developing countries and 55 percent of them are women.

In addition to the underbanked population, there are also huge numbers of people who are unbanked. These are people who often live in countries that have an established financial sector. In other words, they theoretically have access to financial services but remain outside the mainstream, using alternative financing options rather than banks.

In total, about 38 percent of the world’s population is either unbanked or underbanked, i.e. they don’t have a bank account.

Where Do the Underbanked Come From?

In OECD high-income countries, 94 percent of adults have bank accounts. To put this in perspective, just 54 percent of people in developing countries have one. This ranges from an average of about 70 percent in developing countries in East Asia and the Pacific to just 14 percent in developing countries in the Middle East.

In fact, there are 16 countries where less than 15 percent of the population have bank accounts. Almost all these countries are in Africa, the Middle East, and South Asia:

· Turkmenistan — 1.8 percent of the population have bank accounts

· Central African Republic — 3.3 percent of the population have bank accounts

· Yemen — 6.5 percent of the population have bank accounts

· Niger — 6.7 percent of the population have bank accounts

· Guinea — 7 percent of the population have bank accounts

· Burundi — 7.1 percent of the population have bank accounts

· Madagascar — 8.6 percent of the population have bank accounts

· Afghanistan — 10 percent of the population have bank accounts

· Iraq — 11 percent of the population have bank accounts

· Tajikistan — 11.5 percent of the population have bank accounts

· Cameroon — 12.2 percent of the population have bank accounts

· Djibouti — 12.3 percent of the population have bank accounts

· Chad — 12.4 percent of the population have bank accounts

· Pakistan — 13 percent of the population have bank accounts

· Egypt — 14.1 percent of the population have bank accounts

· Burkina Faso — 14.4 percent of the population have bank accounts

Platforms Based on Cryptocurrencies Are the Catalyst for Change

Even though many people in the world don’t have bank accounts, it doesn’t mean they don’t have access to technology. In particular, mobile phone penetration is high, even in developing countries.

This opens the door for technology to provide a solution to the world’s underbanked population. For many experts, cryptocurrencies, blockchain technology, and platforms built on them, present life-changing opportunities for those currently outside the financial mainstream.

There are many reasons for this including the fact central governments do not control cryptocurrencies. This means the political upheaval that sometimes occurs in countries, including in developing countries, does not affect cryptocurrencies.

In addition, cryptocurrencies are not impacted by inflation or by political policies that deliberately manipulate the value of a national currency, often for individual or party-political gain.

The Checqit Solution

Cryptocurrencies on their own cannot give the world’s underbanked access to mainstream financial services. To achieve this goal, you need innovative platforms that simplify the technology, address the specific needs of users, and generally make cryptocurrencies more accessible.

This is exactly what Checqit does. It makes it simple for investors to use their cryptocurrency assets to get a better return than interest rates offered by banks.

Crucially, however, Checqit also makes it possible for borrowers to get quick and easy access to loans. They do this by connecting the lender and the borrower and by using CQT tokens as the basis for the transaction.

In other words, they make it possible for those without a bank account to access affordable, fast and secure loans.

Technology is changing the world. For the underbanked, platforms like Checqit could become their mainstream.

https://checqit.io/