Fast forward to 2021, and the concept that economic benefit can be maximized through open markets is no longer revolutionary, but the opportunity that we collectively have through decentralized financial (DeFi) markets to put this into broad real-life practice, has never been greater.
The innovation that we are seeing today in fintech, distributed ledger technology (blockchain) and digital assets has created a reality that allows for financial inclusion in ways that could never have been imagined before. Bridges from traditional finance to DeFi are being built to create real-world solutions for real-world challenges, especially in the areas of payments, remittances, lending, insurance and investments.
According to the World Bank, ASEAN is home to an unbanked population of about 290 million, with only 18% of the region having access to credit, financial services or investment products. To date, over 70% of wage payments and government transfers are still being handled in fiat currencies (cash).
At the same time, it is these same exact countries that are also home to young populations with a strong drive for entrepreneurship. According to the World Economic Forum’s 2019 ASEAN Youth Survey, 31.4% of the youth surveyed across the region were either entrepreneurs or worked for a start-up, and 33.1% aspired to work in an entrepreneurial setting.
In addition, this region has a parallel dichotomy of burgeoning rates of digital literacy, mobile internet connectivity, and a digitally savvy generation of consumers, which is juxtaposed with the reality that in some of these countries, the unbanked and underbanked represent 60 to 70% or more of the population. This has created an ecosystem ripe for change.
Increasingly, with greater focus on the development and nurturing of the right skills and through enhanced exposure to technical mentorship, these same people are building the very frameworks necessary to create solutions and products for the population that are underserved and overlooked by legacy finance.
Within the past several years, innovations in fintech — that run the gamut from the rise of digital payment solutions through the growth and implementation of blockchain — have all played a critical role in developing the requisite infrastructure for greater financial inclusion. DeFi’s model of peer-to-peer engagement and inventiveness, has created a significant opportunity for the making of real-world solutions to the challenges that exist of giving people a proverbial “seat at the table.”
The possibilities for financial inclusion alongside the accretive upside that these types of businesses generate mean that throughout the ASEAN and Indian region entrepreneurs, technologists, investors and innovators are working side-by-side to create open markets that can truly help everybody.
Source: forkast news