Blockchain for Financial Inclusion in Uganda
The Challenge of the Financial Inclusion Gap
Around 2 Billion people around the world, 40% of adults worldwide, do not have access to basic financial services, the majority of them in developing countries. Broader access to the financial system for the unbanked people is critical however to contribute to end global poverty and it can boost job creation and increase investment in education. The reasons for not having a bank account are diverse ranging from lack of accessibility and lack of credit history to insufficient proof of identity and lack of sufficient balance requirements. Furthermore, many potential customers cite a lack of trust in banks (Djankov et al, 2008).
In order to tackle the gap, financial inclusion has become a key focus area which is included in eight of the seventeen United Nations’ Sustainable Development Goals Agenda (UNSGA, 2018).1 An analysis of Omar and Inaba (2020) for the economies of 116 developing countries in Asia, Africa, Latin America and the Caribbean showed that financial inclusion significantly reduced poverty and income inequality in these countries. The majority of the two billion people worldwide that are unbanked are financially active and many of them are entrepreneurs. Financially including them constitutes a massive market opportunity for financial service providers.