TechInAfrica – Financial services in many developed countries in the world have reached almost all level of population, no exception to the poor and rural population. However, it’s different in many underdeveloped countries in Africa, such as Sub-Saharan Africa.
World Bank found more than half of the population—precisely 66 percent—in Sub-Saharan Africa are unbanked. It’s such a big number and a big way to go to have financial inclusion in the region, thus, feasible solutions to tackle challenges are needed.
Blockchain is one feasible solution to open a lot of opportunities to address challenges on the continent. It’s able to do what traditional banks don’t, like measuring the creditworthiness of traders in Kenya’s $20 billion informal economies. It’s now getting easier as Kenya’s first crypto-ATM has been introduced in.
In South Africa, some blockchain innovations have been introduced, such as Dala, Wala, and Centbee. These blockchain innovations have helped many Africans living with $2 or less per day. They don’t even charge fee for doing the microtransactions. The existence of blockchain technologies can bring more economic impactful effect, especially those who have no bank accounts yet. They are economic drivers in their market only if they move out of the informal economy.
The challenges for financial inclusion in Africa including technology infrastructure and regulatory frameworks. However, these challenges also bring opportunities for economic growth, particularly through blockchain technology to address gaps in the African communities.
Blockchain technology is able to open a lot of opportunities in both finance and banking. As mobile phones are now highly used, financial transactions can be done through the device. What’s good about blockchain is that it provides transparency and removes third-party involvement. Moreover, it also provides traditional bank functions, such as the store of value, exchanges, and reliable transactions.
Blockchain creates new ecosystems that are able to address financial inclusion’s challenges. It provides secure identity, a new way to approach insurance, and great control of data individual. With the emergence and growth of blockchain, financial inclusion in rural areas is possible to reach.