By Anton Dzyatkovsky, co-founder of MicroMoney blockchain credit bureau
My father, a lawyer, used to say that people tend to do unreasonable things which they would regret for the rest of their lives — much often because they do not have an access to extra money when they badly need them. Sometimes even a small amount given at the right time can save a person from getting into trouble, or even help start a small business or detain it afloat. That`s why I strongly believe that providing easy access to funding would help to de-escalate social tension in many regions and fight economic inequality.
Social tension is a real problem in many developing countries, and one of the main reasons for this is financial exclusion. Having no access to many basic needs and no chance to multiply their capital, billions of people around the world are cut off from social lifts and sentenced to indigence. Many of them, having no other option of earning money, get involved in crime and become a part of the “shadow economy”. Neither of this is good for any country’s social climate and economy. I am convinced that providing affordable and easy-to-access financial services can help to change the situation.
Why am I so sure it will work? Let’s s start from the beginning. It is estimated that over 2 billion people around the world are unbanked, which means they have never worked with any bank or financial organization, and, of course, have always operated only with cash. The main reason why billions of people are unbanked is the absence of a credit record. Having, therefore, no chance to get relevant banking services in time of need, these people stay excluded from the global financial system and the advantages it provides.
Yet this vast audience has potential: many of those people, if they had a chance, would be much more economically active, and would be able to produce more money contributing to the country’s GDP. Many small businesses could be started, and a number of them would grow into larger businesses, developing the local economy. Talking about social tension, many risky personal situations can be avoided: having another option, that is safe and transparent, one will never “borrow from thugs”.
The problem has already been realized by governments all over the world. For example, in India, the institute of microfinancing is supported by the government and special regulation have been taken to prevent unhealthy methods of work. Resolving global financial inclusion is now a part of the policy of the United Nations and other powerful NGOs worldwide, as part of their global plans for eliminating poverty and raising involvement in the global financial system through mobile and Internet availability.
Our idea in MicroMoney is to put together the classical microfinancing or social lending, the safety of operations provided by blockchain, and the opportunities the innovative technologies can offer. This way we’ll help the unbanked people in emerging markets to get affordable, fast and high-quality financial services based on transparent conditions and adapted to the local economy.
MicroMoney relies on a robust scoring platform based on neural networks, AI algorithms, and Big Data analytics. This approach optimizes all the processes connected with the loan application approvals. The platform analyzes data from the customer’s mobile phone to assess the applicant’s score rate. Upon user’s consent, we also share this information with the other participants of the financial industry — banks, trade, insurance companies and other, this way helping them to develop relevant, affordable and easy-to-use financial services. It is a win-win strategy: the financial industry gets new clients, and the customers get the chance to support their families and businesses with a wider range of offers available for them as they finally started their credit history.
We at MicroMoney believe that getting access to financial services is a part of human rights because it helps people to access basic needs. I am convinced we can play an important role in fighting economic inequality. In 2015 our company joined the principles of the United Nations Sustainable Development Goals program. We will direct our resources to help unbanked people in creating a multi-purpose digital identity along with financial reputation without boundaries or mediators.