Financial inclusion in emerging markets
By: Kiara Sandoval
Tags: Blockchain, Financial Inclusion, Xonio Opportunity, Cryptocurrency, Fintech

Financial inclusion in emerging markets

It may come as a surprise but in emerging markets like the Philippines, having a bank account is not the “normal” thing.

Alarming? Yes — who would’ve thought that financial access, a basic right, isn’t enjoyed by majority of the adult Filipino population. In fact, according to the 2017 study on financial inclusion by the World Bank, only 34.5% Filipinos of ages 15 years and above have formal bank accounts. That leaves more than half of the Filipino population excluded from the benefits of a traditional banking system. Read more about why the Philippines is unbanked.

In a statement issued last May, Bangko Sentral ng Pilipinas (BSP) announced that with the high rate of unbanked Filipinos in the country, digital payments seem like a promising solution — considering that recent studies show spikes corresponding to e-payments.

Why is financial inclusion so important?

The need to widen the reach of financial access is essential in enhancing Filipinos’ standards of living. If every Filipino was financially “served,” then their overall social and economic well-being will improve in terms of managing expenses, smooth consumptions, investments in education and healthcare, making safe and secure payments and saving for the future. It is safe to say that by creating ways to bring financial inclusion to the unbanked, a whole new gateway of opportunities will arise to upgrade not only the quality of their lives but also the economy of country.

Using blockchain tech to ‘get there’

So, how do we turn the financially “unserved,” into the financially served? The financially unserved are the remaining 65.5% of Filipinos who, according to the World Bank, do not even have basic bank accounts. These individuals are restricted by the systems and processes of the traditional banking system and rely heavily on cash transactions only.

Though the government has already started on digitizing e-payments to facilitate this problem, we are eyeing the blockchain technology as the key to improving financial inclusion as well.

Through XONIO, we want to provide telco prepaid users, which comprises 95–98% of the population in emerging markets, a platform to convert their telco credits into a digital currency that can be used to purchase digital goods and buy cryptocurrency. By combining an everyday utility such as telco prepaid airtime with a secure, immutable and transparent technology such as blockchain, accessibility to the masses, even in remote areas, becomes possible.

Sample screens of XONIO Mobile

Why blockchain?

Blockchain is quite the revolutionary technology. If you’re new to the tech or would like to understand it more, please check out our article here.

3 ways blockchain helps promote financial inclusion 1. Accessible to everyone — There are millions of people all around the world, especially in emerging Asian Markets, that do not have access to traditional banking institutions. Through blockchain and cryptocurrencies, the unbanked will finally access the token economy and enjoy all the benefits the blockchain has to offer. 2. No more intermediaries — Because the blockchain is a trusted decentralized system, the need to hire third parties to facilitate transactions on your behalf is no longer necessary. Transactions are made easier and more upfront. 3. Lower transaction costs — Since there are less people involved in transactions, less fees are imposed. Users get the most out of their wallets.

With all these benefits, we believe that XONIO can deliver a unique financial inclusion solution to emerging market consumers.