Least advance countries are decades far from strong penetration of digital money systems
Serving financial services to the unbanked does not necessarily imply “banking the unbanked”
Innovation in development aid and microfinance has to comprehend the low-tech reality of end-beneficiaries
It’s everywhere: digital payment is now the norm. We hear of how hospital bills are paid with WeChat, we buy coffee with ApplePay, all big banks are launching their own digital payment service.
But don’t forget. If you live in the US, or in Germany or Japan, you were pretty much born with a bank account. With an id card too. You’ve benefited from your welfare state’s education system and you’re able to cope with the continuous patches of our world.
I live in a country where less than 20% of people are “banked”. In 2018. Some people don’t have a bank account because they can’t produce the KYC documents needed. Most just can’t deal with the hassle of opening one.
This is something that took me time to fully understand: for the average chap in low income country, simple things sometimes seem like a mountain because of low self-confidence.
With just a few years at school, born late to the tech era, the many just don’t even try to cope with the world’s updates.
We all know this feeling. If you’re a dev, you’ve probably thought that reading basic Python is easy, but people don’t even bother because they are stuck in the belief this is for the pros. If you’re a legal experts, chances are you’ve been asked by a friend to explain her some legal order that’s written in plain English, and you felt you were no more qualified than her to understand it, only you had enough self-confidence to deal with legal stuffs.
Same goes for the working poors in low income countries: with just a few years at school, born late to the tech era, the many just don’t even try to cope with the world’s updates.
A 2016 study by USAid and the Asia Foundation highlighted how 48% of Cambodians stated having used Facebook the previous month, but only 33% claimed they had used the internet. The authors guessed:
“it presumably reflects the fact that some respondents don’t know that when they use Facebook they are using the Internet.”.
It just means that half of Facebook users in Cambodia — and these guy are the millennials — don’t understand what the internet is. The remaining 52% non-Facebook users probably don’t have a clue neither.
That’s 75% of the population running their mind on Windows 95 when our world surfs Android 9.
So it’s not that Cambodian people don’t have a smartphone. Latest estimates mark smart devices at 65% penetration, with 55% of national population on Facebook, and counting. Figures nearly as high as in Europe. In order to boost its adoption rate, Facebook had to allow people to register with just a phone number instead of an email address. Because requiring them to click a confirmation link would create high drop off — no joke — where SMS-based code is what they are used to.
Keep it simple. Keep it the way they know. Many Cambodians don’t know how to download apps from the AppStore: dealers supercharge phones with commonly used apps on purchase. Don’t ask people to get your app. They already use Messenger. So make a Messenger Bot.
Our topic at The DApact is development aid. Microfinance to begin with. Blockchain has that fabulous potency to allow transfer of value to unbanked people. We send them a QR through our chatbot, they produce this QR code to a local agent — a pawnshop — and they get a loan in cash. No bank account needed. No e-wallet. The QR code is in fact a materialization of an Ethereum smart wallet topped-up with Dai (MakerDao’s stable coin), and they actually redeem Dai for cash by producing it. But this they don’t need to know, as long as they know they get a cash loan principal against the QR code.
One third of the world population doesn’t have a bank account. Over 2 billion peoples. Say we can make it drop to just 1 billion within 10 years. That’s still another billion people most in need for development aid and microfinance services. They are the billion that won’t update to Android 26.
The future is cash-comprehensive. Any project claiming to help development agencies or foundations disaggregate their funds has to comprehend the end-beneficiaries’ reality, and run on that same outdated operating system they use.