After more than eight centuries since modern banking started in Italy, around 31% of the global population still remains unbanked, as a recent World Bank report says. Moreover, most of the unbanked people belong to the marginalized sections of society. They are either stricken by poverty or are located in regions where the infrastructure is not available. If prosperity is to be brought to the world, we need absolute financial inclusion. How do we bring these people under banking? Can blockchain technology be the answer? Let’s find out.
Challenges Faced by the Unbanked
Ina word that is swiftly advancing technologically, it is difficult to understand how close to two billion people are still left without basic access to banking and related financial services. They cannot take loans at better interest rates and so have to rely on merchants who give out loans at exorbitant commissions and difficult terms of returning the money. They cannot send or receive money from family or friends living in other countries and have to pay all utility bills with cash, without the benefits of using banking facilities.
Transferring funds is another major problem these people are facing. Since many members of such families go abroad for better opportunities, they invariably send money to their loved ones back home. Unfortunately, even this process is severely restrictive in terms of pricing. Conventional service providers like Western Union or Moneygram often charge as high as 10% of the transacted value. As a result, workers have to part away with a significant amount of their hard earned money which they had put away for their family.
Blockchain-Powered FinTech to the Rescue
Mobile services have so far been the most popular even among the populations in the developing countries. Access to the internet and cellular data services has expanded a lot. Due to the falling prices of mobile telephony services, people in even the most impoverished societies have been able to avail entry-level mobile devices and access to the internet. This has opened up more extensive access to certain banking services that can be accessed by the unbanked.
Financial services have a lot of potential to be transformed by emerging technologies like blockchain which can bring financial inclusion to everyone, regardless of socio-economic strata or location in the world. Blockchain technology can help anyone in the world create a cryptocurrency wallet that can be secured on the individual’s mobile phone and accessed as and when required. Funds are always in control of the user and can be transferred easily, swiftly and safely to anyone in the world.
This solves the major problem of sending remittances to families by migrant workers across the world. By sending money through a blockchain-based platform, they can save a significant amount of money, and also be assured that the money will reach them without the need for any intermediaries.
The idea of using blockchain technology to bring about financial inclusion is not new. Projects like BitPesa, that was launched in 2014, is empowering people in African nations by helping them convert digital currencies into local ones that can be easily transferred and held securely in their mobile account. Another such innovative experiment from the Asian region that seeks to empower migrant workers, individuals, and small businesses, is the Noah Project.
The Noah Project
The Noah Project has a global outlook for addressing the major concerns of money transfers. According to the country’s official records, there are about 2.5 million Overseas Filipino Workers, who regularly send money to their families back home. In that sense, 10% of the country’s GDP is made up of remittances received from these migrant workers. One of the major focuses of the Noah Project’s platform is to help the poor migrant workers who shell out exorbitant fees for transferring remittances back home. The platform is a boon for migrant workers and small businesses that will benefit greatly from the swift, safe, secure funds transfer ecosystem of Noah.
With the help of a user-friendly mobile app-based digital wallet, users can easily store, send and receive Noah Coins, and other cryptocurrencies. Noah Coins are at the heart of the ecosystem that allows transfer of value from anyone, anywhere in the world, without the need of intermediaries and the need to pay high transaction fees.
The Noah Project is also setting up Noah City, a state-of-the-art infrastructure for luxurious living and a model for demonstrating the full potential of cryptocurrencies and the blockchain technology. The entire operations of the city will be controlled on the blockchain and all transactions within the city will occur using Noah Coins.
Using the penetration of mobile telephony, blockchain technology can create a financial ecosystem that can play a vital role in solving the financial problems of millions of unbanked and underserved people of the world. And the Noah Project is all set to play a vital role in the Asian region’s blockchain, and financial, revolution.