What Does Unbanked Mean?
The term “unbanked” refers to individuals who lack access to essential banking products and services.
These individuals are often from marginalized sectors of society and are excluded by traditional financial institutions for various reasons.
The unbanked category also includes people who choose not to utilize banks or other traditional financial services.
Promoting Financial Inclusion
In many cases, the unbanked population consists of individuals who cannot afford the costs or meet the requirements of opening a bank account.
Despite government initiatives to develop financial products that cater to the unbanked through microfinancing and other means, many banks continue to reject low-income customers due to insufficient resources.
The crypto ecosystem aims to promote financial inclusion through digital assets, smart contracts, and blockchain technology.
Bitcoin and DeFi projects promise to provide innovative solutions replicating traditional financial products and services, making them freely accessible to all, including the unbanked.
How Can Crypto Help the Unbanked?
Crypto can assist unbanked individuals by granting them access to global financial services.
It serves as an alternative to traditional banking, which often has limited geographical reach.
This means users can access financial services globally, regardless of location.
Additionally, crypto can provide unbanked individuals various financial services, including peer-to-peer payments, remittances, and more.
Moreover, crypto offers investment opportunities to help unbanked individuals grow their wealth.
Is DeFi Good for the Unbanked?
DeFi (Decentralized Finance) can be highly beneficial for the unbanked population.
It offers financial services to individuals who lack access to traditional banking services.
DeFi encompasses lending, staking, and other services to help the unbanked improve their financial situation.
Furthermore, DeFi can provide increased access to capital, such as microloans and crypto-backed loans like Goldfinch, further empowering the unbanked.