Ahead of Traditional Banking: How Africa Employs Blockchain For Financial Inclusion
Friday, October 5, 2018
By Stephen O’Neal
On September 27, at the 73rd Session of the U.N. General Assembly (UNGA), Sierra Leone’s president Julius Maada Bio made an announcement where he declared that his country had set a new goal to create a national, blockchain-based credit bureau to “radically transform” the country’s financial inclusion landscape.
While the aim sounds ambitious, there’s some evidence that Africa’s population might never need traditional banks per se. Instead, they could start managing their money through newer, decentralized methods.
What does blockchain have to do with financial inclusion?
First, it is important to outline the term unbanked — these are people who don’t have bank accounts. Consequently, they are cut off from vital financial services such as credit and money transfers. According to the World Bank’s financial inclusion database, in 2017 there were around 1.7 billion adults who are technically unbanked, which is roughly 30% of the global population. In the US alone, which is a developed country with robust economic infrastructure, there are about 9 million households who are unbanked, as per the 2015 Federal Deposit Insurance Corporation’s report.
Photo courtesy of AMISOM Public Information.