Bill Gates is focused on financial inclusion. Photo: Shutterstock
More than 2.5 billion people around the world don’t have access to formal financial services.
That’s a big problem. When you’re not connected to the formal economy, you don’t have a good way to save and protect your assets, make payments and most importantly, plan and build toward a better future for you and your family.
In fact, having access to finance, according to the Bill and Melinda Gates Foundation, is critical to empowering poor households to take advantage of opportunities that could lift them out of poverty.
But if there’s anything we’ve learned about Bill Gates, it’s that he loves going after big problems, especially ones that will have an equally big impact. Three years ago, his foundation made reaching the unbanked part of its core strategy.
And according to Gates in an interview with Live Mint in India last month, 2016 will be the year of financial inclusion—thanks to a convergence of digital payment technologies and smart regulations in developing economies.
Because the only way to connect the world is to have a truly digital financial system—much like how we democratized access to information with the Internet.
Gates, in a Backchannel interview last year, cited the significance of distributed financial technologies, specifically mentioning Bitcoin and Ripple as potential models:
There’s a lot that Bitcoin or Ripple and variants can do to make moving money between countries easier and getting fees down pretty dramatically. But Bitcoin won’t be the dominant system. When you talk about a domestic economy, [you must have] the idea of attributed transactions, where if you sent it to the wrong person you can actually get the transaction reversed. [And a traditional system] doesn’t have this huge fluctuation where the value of your account is going up and down by a factor of two. We need things that draw on the revolution of Bitcoin, but Bitcoin alone is not good enough.
The Gates Foundation has been investigating such new technologies and digital payment systems with its Level One Project, recently publishing a comprehensive report on their lessons learned.
To get a sense of how the foundation approaches the problem of financial inclusion, be sure to check out our in-depth interview with Kosta Peric, deputy director for the Financial Services for the Poor at the Bill & Melinda Gates Foundation. A long time SWIFT veteran, Kosta is a co-founder of Innotribe and is also credited with coining the term “FinTech.”