Millions of people worldwide have no savings bank account or any financial tool.
There are almost a billion people worldwide without a bank account. Many unbanked people are excluded from the economy and forced to work illegally. Countries with high shares of unbanked are usually less stable economies with a less developed financial system. It is generally with many countries where the citizens have little or no trust in the traditional banking system. Although emerging economies and countries with struggling economies have the highest number of unbanked, the lack of access to financial tools and services of banks is also present in more developed and financially stable countries. Financial services often cost money and come with fees, and without sufficient finances, customers might find it too expensive to open a bank account.
How does the situation change after the COVID-19 Pandemic?
When the COVID-19 pandemic struck, people worldwide relied on digital payments to buy groceries and other purchases online and get delivered to their homes to avoid crowds in stores and marketplaces. This led people and societies worldwide to increasingly become cashless, making it difficult to pay with paper bills.
The share of the unbanked population dropped quickly because of the COVID-19 pandemic, as various social welfare programs were introduced to alleviate the economic impact of the pandemic by governments across the world. As the load on the banking sector increased tremendously, crypto advocates believe that blockchain technology with cryptocurrencies accelerates the process of banking the unbanked in low-income countries. The pandemic triggered a powerful booster of financial inclusion everywhere.
For example, Bitcoin lightening adoption in El Salvador, where more than 50 percent of citizens are unbanked, and the working population lives in the United States, Dubai, Qatar, etc., from where they send payments and remittances to their families back to their own country. Cryptocurrencies can be used for these payments, dramatically reducing cross-border fees and allowing families to send and receive crypto instantly. Unlike traditional banking, sending crypto doesn’t require families to have a KYC (know your customer), which many lower-income people lack. They will need a Wi-Fi connection and a digital device to start using crypto and make secure transactions on the blockchain networks.
Providing banking facilities for the unbanked may sound like a good idea. Still, it assumes that people who lack financial services primarily need a better and cheaper way to access them. The problems people face in financial inclusion found that 30-40 percent of people in low-income countries lack money as the main reason for not having a bank account. There is a strong correlation between financial exclusion and living in poverty.
Millions of people across the world have no checking or savings bank account. Financial exclusion erodes their quality of life and holds their nations’ economies back. The term “unbanked” is defined as a person “not having access to the services of a bank or similar financial organization.”
Here are a few examples of how Klever is doing its part to board the unbanked with in-house developed blockchain technology products.
Using Klever Wallet blockchain for payments and transactions is probably one of the easiest ways to make a p2p. Only you have access to your account data. Your keys, your cryptos. No KYC is required. From Stablecoins to altcoins to your favorite crypto project, you can send, store, swap, and receive cryptocurrencies 24*7 in the Klever wallet.
Klever security is ensured by being built on top of KleverOS developed in-house, which uses advanced security mechanisms that protect the user’s private keys.
Infrastructure built by Klever
Klever Exchange, Klever Kustody, Klever Safe (Hardware Wallet), and NFT marketplace complete the entire infrastructure for users who love custodial and non-custodial services, and KleverChain for payments with affordable transaction fees for the marginalized.
Essential Facts About the World’s Unbanked Population:
Women account for most of the unbanked. Even in countries with a small majority of unbanked individuals, women account for most. In developing economies such as India and China, females account for nearly 60% of unbanked adults.
According to the world bank survey, The most common reason provided, with about two-thirds of respondents citing this reason, was simply lack of money.
- 30% of unbanked said they did not need a savings account.
- About 26% stated that accounts are too expensive, and 26% also noted an account is not necessary because a family member already has an account.
Other reasons include distance, documentation requirements, and distrust of the traditional financial system.
With Klever, you can create a crypto wallet account if you have access to the internet and a smartphone. Without KYC or any documentation, you can send and receive payments in different cryptocurrencies, including stablecoins, to avoid volatility.
It is imperative to harness the power of financial services, which helps in saving money, starting a business, and paying for schooling for the children. With small capital, companies can create jobs. With financial inclusion, the more people are banking today, the more they are banking for their future, which is positive for the nation’s economies.
Financial exclusion can be expensive. It directly impacts the quality of life and prevents them from investing in their future; it leaves them with limited safeguards if they lose their job or fall ill, making them vulnerable to predatory lenders. Access to financial services is an essential factor in escaping poverty, which is also one of the 17 Sustainable Development Goals promoted by the United Nations to improve the condition of the marginalized.
But financial exclusion is expensive not only for people directly affected and delays nations’ economic growth and development.
To bring people out of poverty, especially women it is vital to have the financial tools for payment, credit, insurance, and saving. Klever ninjas are developing in-house blockchain technology products for on-boarding the unbanked to digital crypto infrastructures and make further these advancements even more for financial inclusion, cashless economy, and Digitalisation for millions of people.