How is Bitcoin Empowering Financial Inclusion in Africa?

In Episode 3 of The Nobcast, we interviewed Paul Obinna Yirenkyi and discussed the Significance of Bitcoin for the Unbanked. In the interview, we spoke about how bitcoin can provide access to financial services to the unbanked. 

According to the Global Findex Database 2021, there are 1.2 billion adults that are unbanked in the world. More than half of the world’s unbanked adults live in seven economies. Nigeria is one of such economies and the country with the largest unbanked population in Africa.

If you own a bank account, those figures may sound far from the truth. However, for the millions of people that live in rural areas or villages, the chance of having a bank account is a far cry from the reality of what happens in urban areas. Some of these challenges those in rural areas face include meeting KYC requirements, accessibility to financial institutions, and many more.

Some of the unbanked don’t trust financial institutions. They believe that financial institutions aren’t to be trusted. Some even believe that opening a bank account could put their land and other valuable possessions in the hands of the banks. 

Something we take for granted is our ability to afford monthly bank account maintenance fees, card maintenance fees, and other attendant fees. To people in rural areas, every penny counts, and a depleting bank account might not be quite palatable for them. 

Although there has been an increase in mobile service subscriptions in sub-Saharan Africa by 46%, not everyone is able to afford a smartphone or internet subscription. And most bitcoin transactions require an internet connection to function. This can pose a challenge to people in rural areas. They may not be able to afford to buy a smartphone let alone maintain a monthly internet subscription. This doesn’t mean that they don’t have phones, but they have access to our feature phones which are comparatively more affordable than smartphones. 

How bitcoin empowered financial inclusion

Despite the prevailing obstacles preventing people in rural areas from having access to financial services, bitcoin has been able to make it possible to break through the barriers. 

Decentralized Currency

The decentralized nature of bitcoin makes anyone who has access to bitcoin free from the government and the central bank. No individual or institution can confiscate your bitcoin or freeze your account so long as you keep your bitcoin keys safe. 

Easy Access to Money

Bitcoin makes it easy for people in rural areas to have access to money not just locally but also from all over the world. Anyone with a bitcoin wallet can easily receive bitcoin directly without the presence of an intermediary, fees, or a need to leave the comfort of your home.

Speedy Transactions

Bitcoin transactions are cheaper and faster than their conventional counterparts. Platforms that carry bitcoin transactions, like Bitnob, can act as a quasi-bank for the unbanked with reduced fees through the use of the lightning network. With the right kind of bitcoin platforms to facilitate such transactions, it is possible for people living in rural areas to have access to financial services through bitcoin. 

What to do next?

Although bitcoin has the potential to solve financial inclusion in Nigeria, there is a need to share this information with the unbanked. So spread the word about bitcoin and orange pill your friends and family. Click here for some orange pilling tips that you might find helpful.