Neobanks and Crypto Service Providers are Helping the Unbanked— A Look at the Numbers.

In an era when internet coverage has permeated even the remotest nations, it’s startling to realize that nearly 1.4 billion adults worldwide remain unbanked (representing about 26% of the global adult population), lacking access to even the most basic financial services such as a savings account, credit line, etc. that most people take for granted in today’s day and age. 

However, nowhere is this disparity more apparent than in Sub-Saharan Africa, where a staggering 66% of adults – approximately 350 million people – are excluded from the use of formal financial services.

The reasons behind this exclusion are many, including geographical isolation, lack of identification, prohibitive costs associated with traditional banking services, socio-cultural barriers, and limited financial literacy, particularly for low-income individuals and those in rural areas.

That said, beneath these stark realities, a revolution seems to be underway, with neo-banks (such as Chime and Revolut) and cryptocurrency service providers (such as Paymob, Busha, and AZA Finance) working tirelessly to bridge the aforementioned divide. These digital-first entities are leveraging the power of mobile phones and basic internet access to offer equitable financial services without the need for physical bank branches.  

Empowerment through innovation

The advent of neobanks and crypto services, especially in Sub-Saharan Africa, is widely being viewed as a transformative first step towards improving financial empowerment. By providing users with digital wallets, savings accounts, and payment solutions alongside a basic level of financial literacy, these platforms are helping users navigate the complexities of digital finance and make informed decisions about their money.

Customer service is another critical component, with many service providers today offering support in local languages and through channels that are easily accessible to their target audiences. This personalized approach is helping build trust and confidence among users who may be interacting with formal financial services for the first time.

With this backdrop in mind, Boxwind has emerged as a forerunner, presenting users with a unique value proposition. As a brand born out of the expertise of the Exinity Group, a global wealth management organization backed by 20 years of experience in trading and investment, Boxwind seeks to serve emerging markets in the crypto exchange space. 

The platform is designed with a deep understanding of the challenges facing developing markets, particularly the limited access to financial services and cryptocurrency trading options. Boxwind’s business model is built on the principle of mutual benefit. By focusing on high-quality customer service and competitive pricing, the platform seeks to retain a large number of clients while still offering accessible operational rates.

Lastly, Boxwind’s plans to explore local licenses and build partnerships in countries with currently low financial access outline its long-term commitment to serving developing regions (especially Africa). This strategy not only helps in navigating regulatory landscapes but also fosters trust and reliability among local users.

A perfect storm is brewing.

From the outside looking in, Sub-Saharan Africa’s unique economic landscape makes it an ideal place for cryptocurrency adoption, addressing the needs of the unbanked. The region’s high inflation rates, averaging 9.4% in 2022, have eroded purchasing power and driven residents to seek alternative stores of value. 

Moreover, the region’s crypto market, while currently accounting for just 2.3% of global transaction volume (approximately $117.1 billion in on-chain value), has shown remarkable growth potential since 2020. 

To elaborate, countries like Nigeria, Kenya, and Ghana are leading the charge, ranking high on the Global Crypto Adoption Index. Moreover, the predominance of retail transactions under $1,000, accounting for 80% of crypto payments, underscores the grassroots nature of adoption in the region.

Therefore, amid this fertile ground for crypto growth, Boxwind is positioning itself as a key player in driving financial inclusion. By offering a user-friendly platform tailored to the needs of emerging markets, the platform is making it easier for the unbanked to participate in the global crypto economy. Interesting times ahead, to say the least!