Around the world, there are about 1.7 billion people who do not qualify for a bank account. Not just that, but there are perhaps 4 billion who may have an account but struggle to make ends meet. They face steep fees when their checks bounce and frequently resort to loans, sometimes from questionable sources as no bank will grant them one. If they have access to banks, researchers estimate that an additional $100 trillion in financial assets could be created over the next 50 years.
With such an opportunity, several companies have attempted to fill in this gap. Tala, a company valued at about $800 million, offers loans to its 4 million subscribers, based on a check of their phone logs to determine trustworthiness. Another company, M-Pesa, is currently one of the most popular mobile banking systems in Kenya with 93% of the population carrying out transactions using it. In North America, Green Dot, which is the largest provider of prepaid debit cards in the United States, provides a similar service helping its users avoid costly overdraft fees and bounced checks.
Thus, the market of serving those without banks seems promising to create some of the future’s largest fortunes while improving countless lives. It is then both capitalism’s moral imperative and the path to one of the most significant untapped markets there is.