Did you know that about 2 billion adults around the world do not have access to a bank account? Yet, this population still needs to gain access to credit, store money safely, or send it to relatives across borders. It goes to show that banking the unbanked could prove very beneficial to both parties.
Now, with the integration of regional economies such as the ASEAN (Thailand, Indonesia, Singapore, Malaysia, Philippines, Vietnam, Brunei, Myanmar, Cambodia, and Laos), there is new hope for the unbanked.
Why People Become Unbanked
Being, unbanked has more than its fair share of challenges. Besides the lack of access to credit, can you imagine not having any sort of insurance whatsoever – no health cover, car insurance, or even life insurance? Some people can’t even save money for their children’s tuition or anything else for that matter.
It makes one wonder; why would someone (who is not a drug dealer for instance) continue to live in that state? Here are some reasons;
- Between the cost of opening an account, the minimum balance, and the cost of maintaining it, some people simply can’t afford to be banked.
- Sometimes it is not economically viable to finance people who do not meet the minimum financial threshold.
- Geographic inaccessibility for those who live in regions where there are no banks nearby.
Why Banking the Unbanked has Long-Term Benefits
As mentioned before, the world’s unbanked population is an outstanding 2 billion people. Some of these individuals receive daily wages or government grants in cash. Others are either foreign workers or students.
A good percentage of these people have a credit history and would love to be financially included. It is a ready market for bankers, and the people who seize the opportunity will earn trust and a reputation that will last for ages to come.
- The integration of regional economies such as the ASEAN countries and the East African Community is increasing the market base and introducing more favorable laws. Investing in the…