One In Every Three People Globally Remain Financially Excluded But Bitcoin Is Helping


Up To A Third Of The Entire Population Of Earth Remain Financially Excluded

The world that cryptocurrencies open up to people is a truly interesting one the more it becomes illuminated to the average person. One of the benefits that it prospectively offers people? A fast path towards wide-spread financial inclusion.

Now, while that sounds spectacular, cryptocurrencies are being held back by overly territorial states, authorities and regulators which are preventing them from facilitating this very unique prospect. The ultimate irony for these bodies is that they are effectively hampering the economic liberation of a large amount of people, especially ironic when considering its the economic liberties of people who, in some cases, live in the country's whose governments are averse to cryptocurrency's usage. That’s not to say they’ve done enough to broaden the availability of their fiat-related financial services and products.

A collection of sources, reports and analysis conducted by research in the past has shown that there are a vast number of member of societies which find themselves otherwise locked out of the financial world. This is all in spite of a number of initiatives designed to close this gap. The emergence and increasing sophistication of mobile phones has helped somewhat, improving access to the internet, accelerating financial inclusion in the process, with over 500 million people opening bank accounts since 2014.

But while this is an encouraging sign, there is still evidence which demonstrates that this increase is occurring unevenly across different regions and countries, according to Research conducted by the World Bank.

A report conducted by the Global Findex Database in 2017, demonstrated how people in 144 economies use financial services which was published in spring of 2018, and shows that one third of the planet's population remain an unbanking population. This is surprising considering 69% of adults now have . an account at a bank or with a mobile money provider. But while the global number of account holders has risen exponentially from 62% in and before 2014, there remains a significant disparity geographically and from a gender perspective of those that do and don't have access to a financial institution. And unfortunately, this gap remains unchanged year after year and between wealthy and poor, there is far slower levels of progress

Which Regions That Suffer the Most From Exclusion?

One of the areas where mobile money services have had a profoundly positive impact have been in the regions of sub-saharan Africa.

While the number that use these services remains low relative to the whole, it's still managed to double in the last three years, hitting 21% by 2017, but the share of adults holding an account with a financial institution remaining flat.

One fifth of the populations of 8 countries only use mobile accounts as opposed to a conventional bank account. These include Burkina Faso, Côte d'Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe.

Overall, there are 95 million adults in the region that remain unbanked to any extent, and only receive cash payments for agricultural products. In the region of the Middle East and North Africa, there persists another problem, that being a gender disparity between men and women. Only . 35% of women, for example, hold any kind of account, which makes it one of the largest gender gaps of all regions researched. There are also up to 20 million unbanked adults that send or receive domestic remittances using only cash or over the counter services.

In Europe and Central Asia, the . amount of accounts that people own overall has increased to 65% as of 2017, driven predominantly by digital government payments of wages, pensions and social benefits. 17% of respective holders opened their first account in order to receive government payments, while 40% of the people are currently not making or receiving digital payments or transactions. Within South Asia, there remains 30% of the adult population that do not have any kind of bank account.

India, in contrast, is an exception with 80% of its adult population having some form of account with a financial institution. This is contrasted with the wider East Asia region and Pacific, however, where the level of account ownership has remained relatively flat, with 30% of people in the region remaining unbanked by category.

While Indonesia has made some significant moves towards financially liberating its population, it remains less than half of the total adult population. In China, digital financial transactions have also increased. The share of account owners that use the internet to pay bills or purchase goods, for example, has more than doubled, hitting 57 percent of the adult population. The People's Republic has seen a monumental growth in the number of people using some form of mobile payment services such as AliPay or WeChat Pay.

This is counter to the lay of the land for Cryptocurrencies, which have, since September 2017, undergone a significantly escalated crackdown on its activity at all levels. This same research has shown, however, that over 400 million account holders in the region still pay in cash for their utility bills, in spite of the fact that 95% of users have a mobile phone.

In areas such as Latin America and the Caribbean, more than half of their total populations own a mobile phone of some capacity, and access to the internet. This represents a more than 15% higher average when compared to the developing world's average overall. In spite of this, only roughly 20% of account. holders in countries like Argentina and Brazil use their mobile devices or the internet to conduct financial transactions.

According to the World Bank, by digitizing cash wage payments, businesses would have the capability to expand account ownership to reach nearly 30 million currently unbanked adults in these regions. Almost 90 percent of them own a mobile phone, according to the report.

The US Is Doing Well Right? Well…

For those who were initially under the impression that the United States, being a member of the developed world, would be in a far better situation will gradually realize that it's not really that different. Considering the fact that the financial landscape of the US and the overall access to mobile devices and the internet that the average US citizen has, the results should really be more encouraging.

But according to a report by the Federal Deposit Insurance Corporation published in 2016, more than 7% of American households hold nothing in the way of a bank. The emphasis here is on households, as opposed to adults, meaning that there are far more adults in the US that don't hold any kind of bank account.

Over 18% of the total comes from black households which are unbanked, while more than 16% of hispanic households are unbanked too. The rate of unbanked households for Asian demographics has also increased over a two year period, rising steadily from 2.2% to 4%.

According to a further study conducted later on by the Corporation for Enterprise Development, which was titled ‘The Most Unbanked Places in America”, it was revealed that almost 18% of US households are ‘underbanked', which refers to people with insufficient access to mainstream financial products such as credit cards and loans. This means that with the lack of proper access to common services such as retail banks, many of these same people are too often, resigned to become heavily reliant on micro-financial services such as pay-day loans, including those offered by pawnborkers and loan sharks.

According to the authors, cities, where over a fifth of the residents do not have bank accounts, include Miami (Florida), Detroit (Michigan), and Newark (New Jersey).

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