The rural cities in Nigeria continue to be neglected for financial services by the banking sector due to the high setup cost and little revenue expected to generate from setting up a physical building in these locations. Some of this has been mitigated through the creation of points of sales agents who are stationed in various rural areas where these financial services are needed. However, despite how strategic these POS agents are stationed, financial services continue to elude some people due to the financial illiteracy that has eaten deep into these communities. They are people who are so hell-bent and committed to not using some banks, saying these banks do not have a structure. These same banks are licensed and insured by NDIC.
Cryptocurrency has come in these areas where the banking sector has failed. There are various ways cryptocurrency has helped drive financial inclusion in Nigeria, and many perks are attached to cryptocurrency usage. Through cryptocurrency as a payment and a store of value, its adoption ranks high in Nigeria. It was not surprising to see a report where Nigeria was stated as the country with the highest bitcoin in Africa, and we rank among the top 10 in the world. Financial inclusion has been attained through many of the perks which cryptocurrency has got to offer, and some of them are:
Financial Education: Many people are curious to learn more about cryptocurrency due to the buzz around cryptocurrency. The buzz has led to 10s of thousands of different awareness and training sessions regarding cryptocurrency discussion. This discussion has led many people to see that despite the shortcomings of the banking systems in Nigeria, there is a lot that could be done with cryptocurrency in the comfort of their homes. This education and awareness have opened the use of the unbanked section in Nigeria to release the financial services they could conduct through crypto. While many now know what digital assets mean, for others, it has opened their eye to an avenue where they could make money by investing their time and resources in the comfort of their home.
Lower transaction Cost: Using cryptocurrency as a means of payment for goods or services is much cheaper than using banks. Banks have become a thief overnight as they change account holders for any and every transaction that goes on from their account. Charges like bank charges, ATM maintenance fees, SMS charges, and alert charges have become used by banks to steal people's money. This is one of the reasons why many people remain unbanked and not financially included. However, cryptocurrency offers an escape route as these charges are eliminated, as your wallet does not charge you for having tokens in your wallet. The transaction cost differs depending on the coins one is looking forward to sending. They are coins that do not charge a transaction fee, and some, like Bitcoin and Eth, that one incurs charges from transacting with them. These fees, however, are way lower than what the bank charges.
Access to Financial Services: Based on the fact that Banks have decided not to create an infrastructure or create an avenue to meet their needs, people have resorted to accessing financial services through cryptocurrency and blockchain at large. People can now have an account to store their wealth as a digital asset. They could send these digital assets as payment or as products or services. The introduction of Defi has also expanded what could be done as these digital assets can now be staked for rewards just like money is being put in a fixed account and to be assessed at a future date. You can loan out your cryptocurrency now while getting a dividend or interest. The services which crypto renders have ensured the financial inclusion of the unbanked sectors
Transparency, Trust and lesser governance: Unlike financial services that banks render, a lot of this is not transparent, and most are controlled through the government. Many people avoid using banks due to the numerous regulations which have hindered this person from effectively conducting key financial services relative to their business. There was a time when this bank had a regulation that an individual account could not make a certain amount of transfer in a day from the account, which was due to the directives given to the bank by the Central Bank (CBN). Cryptocurrency solves these lapses as the governance and rules one have to bend to are less or non-existent, you are in total control of your fund, and you can conduct transactions how you like without any factor holding you back or dictating how you should send your money.
Aside from that, because you are in total control, every transaction on the blockchain or using crypto is transparent and can be seen and easily tracked. Unlike the traditional banking systems where these banks use the money in their possession for something else without the account owner knowing that their money has been used to conduct one activity without their approval or knowledge. With cryptocurrency, the reserve is the case, you are the only one in charge of your money, and only you decide what to do with your funds.
- Remittances: With the numbers of Nigerians living and staying outside the country, Many send money back home, and the medium through which they send it is quite expensive, especially when they use the banking platform. Nigeria is the country with the highest remittance in Nigeria due to the number of Nigerians living and working abroad. Sending these funds back home most times are stressful, and it is more expensive. Sending through banks results in some bank charges and reduced money that might have been sent. However, cryptocurrency solves the issues of these unfair charges. It removes the need to use middlemen such as banks and other payment platforms like western union, PayPal, perfect money, etc. This, in a way, creates an avenue for the sender to cut costs while the receiver will get the full money sent
- Financial empowerment and increase in the standard of living of the neglected region: Many crypto projects worldwide are doing their bits to ensure they impact the local economy of some countries they operate in. Some Crypto projects do not even need an operating base in such a country before they offer assistance to help them. In 2021, the owner of Ethereum made a sizable donation to an Indian foundation due to the crises suffered in that region. Aside from that, The Hive blockchain has also been used to provide clean water to some parts of Ghana through one of its members. This shows how empowering cryptocurrency could be and how it has driven financial inclusion.
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You made a great Thread on Twitter, keep it going!
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