How to Scale up Financial Inclusion in ASEAN countries


In the slums of Manila, Philippines lives a hardworking man Peter. He runs a small eatery that can’t be considered to be a formal company.  Peter runs it under a shack because it’s not registered by any governmental agency.

All the income goes to buying supplies and the extra goes to taking care of his nuclear and extended family. Whatever is left he keeps in his house.

A few times he needs a loan, and for that, he went to local loan sharks. Although the loan sharks charge interest of up to 20% per day in some cases, Peter has never failed to pay back. And he can’t fail to pay back. There is always a threat of violence and everything being taken from him.

However, there is no record of Peter’s good creditworthiness with his lenders. So he can’t use his excellent reputation as a borrower to seek cheaper credit from elsewhere.

There are over 1.7 billion people like Peter around the globe, and close to 50% of the adult population are in the ASEAN (Association of Southeast Asian Nations which includes Indonesia, Malaysia, Philippines, Singapore, Thailand. Brunei Darussalam, Vietnam, Laos, Myanmar, and Cambodia).

They receive their income in cash and rely on informal financial support, which denies them the ability to build credible credit profiles. It also leaves them at the mercy of loan sharks, who lend to them at exorbitant interests.

Make it easy to access financial service terminals

An essential step towards providing financial services to people like Peter is bringing the means of accessing financial services to them, making formal financial services accessible and convenient.

Technology has proven that it can provide the development of microfinance industry. Peter can’t even imagine working on his business without a mobile phone. It’s what he uses to keep in touch with his suppliers.

While financial inclusion stands at about 50%, the percentage of adults with a mobile phone in the ASEAN population is close to 90%.

It is now possible to turn even a simple-feature mobile phone into a financial service point.

In the East Africa country of Kenya, about 50% of the adult population got their first bank account ever in the form of mobile money service.

They can send and receive money as well as save and get loans through simple feature phones.

If this is rolled out in the ASEAN region, it could help change the arrangement so that the bank goes to the customer instead of the other way.

Bring down the cost of financial services

It is essential that the cost of financial services is brought down as well. The profit margins of businesses like the one Peter runs are minimal and making it cheaper to send, receive, save and take credit means a lot.

Blockchain technology can make this possible in many ways. It removes the overhead costs such as building the underlying platform, security, and privacy protection.

And it does more. It makes it easier to generate and share profiles with credit history, which is important when it comes to applying for loans.

Design financial products for the poor masses

Most financial services in traditional financial institutions are designed for those with high cash flows.

If financial tools have to be scaled up, then new products need to be designed with those at the base of the economic pyramid being the initial target.

AssetStream is a platform build with the low-income earners and micro businesses in the ASEAN being the primary target. The platform makes it easier, secure, cheaper and more profitable for lenders and borrowers to transact.

It formalized and made the process of individuals lending one another money. The platform uses new technologies, in particular, blockchain, to achieve this.

Be part of the solution

There is an opportunity of being part of a revolutionizing movement to bring financial services to billions. Sign up on AssetStream and do your part.

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