One of the main reasons people remain unbanked is because they are refused access to such services. However, a large number of the unbanked have consciously decided not to get involved with banking institutions. In fact, statistics show that half of the unbanked people in Cleveland, Savannah, Nashville, and Atlanta had had a bank account before, but decided to turn to other means of managing their finances.
However, in a world where technology develops continuously, new opportunities arise for underbanked and unbanked people to secure financing. One of the most popular new financing options is microfinancing, usually provided through online peer-to-peer platforms.
P2P lending platforms like AssetStream are introducing significant improvements in the world of financing, which makes lending and borrowing friendlier and more easily accessible services.
What are the advantages of micro-financing and P2P lending compared to traditional banking?
Micro-financing can help unbanked people build their credit history, as it provides them with the opportunity to start by taking small loans and gradually build up their records. AssetStream also has a ranking system in place, which was designed with the customers in mind. It allows borrowers to earn credit rating badges for successfully repaid loans.
One of the significant advantages of P2P platforms like AssetStream is the fact that there is no middleman involved, and instead, contracts are processed via the blockchain technology. This means that:
- Both parties of the contract can interact directly
- Smart contracts can only be changed by the parties involved in them, which provides an additional layer of security
- A contract can be started from anywhere in the world at any given time
Another friendly feature of P2P lending platforms is the swiftness of transaction processing. Because of the Stellar ConsensusProtocol used by AssetStream, transactions going through the platform are validated in a matter of seconds. It combined with the mobility P2P platforms offer makes for a better user experience compared to traditional banks.
Micro-financing and AssetStream offer a learning curve
Other than the real user experience advantages of P2P lending, AssetStream has gone a step further by aiming to provide educational materials, to boost unbanked people’s understanding of how the financial system works. AssetStream’s whitepaper offers a detailed explanation of the inner workings of the system and makes sure that anyone who wants to use the platform has the necessary information to start doing so.
Not only that, microfinancing is designed to help people get accommodated with the way personal, and business financing works. By allowing borrowers the opportunity to start with smaller loans, AssetStream gives its users the time to learn and get acquainted with the platform, before taking a big credit. This creates a less stressful environment for the borrowers because they can start with a loan for the exact amount they can successfully repay.
Tired of hearing about traditional banking? Choose a friendlier option like AssetStream!
The numerous advantages of the platform, contrary to the bureaucracy of traditional banking, can definitely make managing your finances feel like a breeze. So if you’ve been thinking about improving your credit history, or getting rid of your bank account, don’t hesitate because there are friendlier options.