Inclusive finance remains one of the most critical issues globally, especially in this era of high-speed digitization. Remarkable as digital advancement might be, and as many more financial facilities are increasing day by day, huge parts of the population remain unbanked or underbanked across the world. Statistics from the World Bank show that about 1.7 billion adults have no bank account; that means the figures miss economic opportunities that come with access to financial services. This exclusion hampers their ability to save, invest, and manage risks and allows poverty cycles to continue, further limiting economic growth.
Fortunately, blockchain technology has come to suggest a groundbreaking solution for this pervasive problem. The decentralised and transparent nature of blockchain has the potential to democratise financial services, making them accessible and fair to everybody, regardless of geographical location and socio-economic status.
Understanding the Unbanked: Reasons and Impact
To effectively address the problem of financial exclusion, an understanding of why so many people continue to be unbanked and the impact this has on their life is of utmost importance.
Reasons for Being Unbanked
- Geographical Barriers: In most of the rural and far-reaching areas, physical bank branches are too few, or there may not be any at all. In this respect, this lack of infrastructure makes it kind of hard for people in such areas to access traditional banking services.
- Affordability: Traditional banking services are usually high-priced, and their minimum balance requirements can make them beyond the reach of most people with a low income. Many people simply cannot afford to maintain a bank account.
- Lack of Documentation: Opening a bank account normally demands identification and other documentations that the unbanked often lack. This is true in places where people may not have their birth certificates or other documentation.
- Mistrust on Financial Institutions: In those places, financial systems have remained volatile or corrupt for a long time; most people do not believe in financial institutions at all. This discourages them from participating in the formal financial system.
- Financial Literacy: If people do not understand how financial services work, it can be a huge deterrent to their use. Without basic financial literacy, people may not appreciate the need for a bank account or may even fear misusing financial products.
Effects of Being Unbanked
The state of being unbanked has severe and widespread effects on the individual and the community:
- Poor Economic Opportunities: It means that not accessing financial services leaves an individual with no other best safe way of saving, investment with opportunities, and credit. They will have small chances to strive for better economic life, therefore resulting in poverty.
- More Vulnerability: The unbanked mostly depend on informal financial services, which can at times be unreliable and costly. They are also more exposed to theft and fraud since they might keep their savings in cash.
- Constricted Access to Services: Many services are quickly transiting into digital payment methods. Being unbanked is likely to limit access to such critical services, which can impact the total quality of life.
- Social Exclusion: Financial exclusion breeds wider social exclusion; one cannot effectively and actively participate in the social and economic operation of their local communities or be completely absorbed in the functions or systems of their societies.
The Power of Blockchain in Financial Inclusion
Blockchain technology can fundamentally reshape the financial landscape by addressing the key barriers that prevent the unbanked and underbanked from accessing financial services. Here’s how:
- Accessibility: In most cases, it’s the people in remote and underserved areas who suffer because banking systems require massive physical infrastructure — the kind that isn’t found in most of these places. On the other hand, blockchain eliminates the necessity of physical bank branches. This way, somebody in the remotest part of the world can access financial services by just using their smartphone and internet connectivity.
- Affordability: High charges and minimum balance requirements always lock out low-income earners from mainstream bank accounts. Financial services provided on a blockchain basis can reduce considerable costs, exclude intermediaries, and optimize processes. This makes the same affordable and available to those people who may have little resources.
- Transparency and Trust: Distrust in financial institutions remains one of the most significant obstacles to financial inclusion in many parts of the world. The transparency and immutability of the blockchain ledger guarantee trust by offering everyone a lucid, tamper-proof record of all transactions. This transparency can help build confidence among users and encourage them to engage with financial services.
- Security: Conventional banking systems suffer from both fraud and hacking. Decentralization and encryption in blockchain grant this extra layer of security for protection against personal data and user asset breaches, very important in gaining trust from the unbanked and underbanked populations.
Tevau’s Role in Bridging the Gap
The potential of blockchain to drive financial inclusion is immense. Enabling the provision of financial services that are accessible, affordable, and secure should leave millions of people unbanked and under-banked to achieve active engagement in the global economy and ultimately result in economic growth for an equal society.
Here at Tevau, we believe in driving financial inclusion with our blockchain-supported cards. We aim to be the first and best financial tool for unbanked and underbanked by offering both virtual and physical Tevau cards, which are easy to use; one doesn’t need a standard bank account to enjoy the services, making it very convenient and meeting a wide range of needs. With an extensive network and support for many different scenarios and types of merchants, we can ensure that digital assets become part of everyday life, easily.
With cutting-edge blockchain technology, we guarantee the system’s stability and trust, ensuring the safety and security of user information and their assets. Our products are designed to be intuitive and user-friendly for the greatest experience since the first use.
More than the push for strong financial tools, we strongly believe in educating users and spreading financial literacy and knowledge. It is through user education that we make financial services accessible and understandable by our clientele. All these Tevau efforts markedly promote access to finance, giving more people opportunities to be part of economic activities and empowering them to achieve greater economic stability and growth.
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About Tevau
Tevau is building the next-generation payment infrastructure by issuing blockchain-powered cards for the convenient daily use of digital assets. This solution addresses issues with slow transaction speeds, high fees, and limited payment options in traditional financial systems.
With a focus on innovation, accessibility, and simplicity, Tevau is revolutionizing how individuals interact with money. Tevau believes everyone deserves the chance to thrive in the ever-evolving world of finance. It empowers users to manage assets, explore new investment opportunities, and seize valuable financial opportunities with ease.
