23 Jun Poverty reduction with the blockchain
Poverty reduction with the blockchain
A few facts in a row. In our modern, global society, 2.2 billion people do not have access to a bank. No bank account and therefore no access to any form of financial services. This group will never get a bank loan to set up a business, for example, and therefore miss an opportunity to escape poverty. And, if you never get a loan, you never have the chance to repay it. This makes it impossible to build up a financial reputation with credit history. After all, banks only do business with people who are’ reliable and predictable’. Well, how do you break this vicious circle? Blockchain technology offers the opportunity to give these unbanked people a digital identity. How then?
There is the blockchain project “MicroMoney” which uses the smartphone as the main means of building a digital identity. A large proportion of these unbanked people do have a smartphone at their disposal. MicroMoney offers small loans in Cambodia by analysing big data on smartphones to predict creditworthiness within minutes. For example, a loan of 20 dollars is a fact within an hour and the happy borrower can get started. Reimbursement within the agreed time frame ensures a positive registration in the blockchain and this builds up a financial reputation that is added to the financial identity. In this way, the vicious circle can be broken and, if desired, the possibility is created to approach a bank for a follow-up loan.
At the moment there are still a number of blockchain projects that are trying to deal with poverty and financial exclusivity. In addition to MicroMoney, OmiseGO, WeTrust and Humaniq are interesting projects that address one of the greatest problems of humanity.