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Taking a look at microfinance in the world of crypto

microfinance

Cryptocurrency has a lot of potential to upend global banking, but it also has a lot of potential to help those that never had access to banks in the first place. Companies like 3air aim to make microfinance more accessible by enabling connectivity and onboarding new users into web3 in remote places throughout Sub-Saharan Africa. Decentralized banking is quickly becoming the future, and a good strategy is to start with those who’ve never had a bank account in the first place.

What is Microfinance?

Microfinance refers to banking that is provided to low-income or unemployed individuals or to groups who otherwise have no access to banking services in the first place. Micro-Financing usually comes in the form of microloans, which are small loans for individuals or businesses to take to get their foot on the ground making income through their work. They often range anywhere from a hundred dollars to twenty-five thousand. These loans are often much safer for individuals who would otherwise turn to loan sharks that would put them into severe debt for a small loan.

In addition, microfinance can provide checking and banking services, business education, and even micro-insurance products. An estimated 500 million people have benefited from microfinance and microfinance-related services. Being unbanked is a huge issue; those who do not have a bank have no way of securely saving money, investing, or using payment services that don’t involve them carrying around physical currency.

Micro-loans on the African Continent

An estimated 350 million Africans are unbanked. This number includes mobile banking accounts, meaning that more than half of the population has no access to any type of banking service, whether it be loans, checking and savings accounts, or other services. For those who are unbanked, it isn’t simply as easy as signing up for a service. There is a huge disparity in the connectivity of the African continent. Cellular connection, while widely available, is severely outdated.

3air aims to solve this connectivity issue by providing internet services and onboarding users into crypto using NFT subscription services that enable connectivity.

Using an NFT-based subscription model will also allow continued development, as 3air’s blockchain is a community coin; users of the service can vote on continued developments, giving the company direct feedback to improve their services. With this internet accessibility, 3air will be able to offer its microfinancing services fully.

The company has already started developing microloans and various account types on its blockchain. Once Sub-Saharan Africa is more connected, the company aims to offer microloan services directly to the unbanked in a fully decentralized manner. In this way, 3air aims to empower local communities through microfinance by first providing internet connectivity, then the services needed for banking and loans.

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