BitMinutes Featured in an Inc. Online Review
An article on Inc.com featured BitMinutes as a leading example of how technology is going to dramatically change how financial services are delivered in the developing world, and how billions more people can join the formal financial system as a result.
Music to our ears! We have been talking for a few years now about the huge potential for capitalizing (word used deliberately) on FinTech advances like tokenization, cloud-based data collection and management, blockchain transparency, et al.
We are already seeing the excitement new financial tools has generated in the younger generation of Nigerians signing up for the BitMinutes program.
These will expand the reach of global financial network to include two billion more people, and BitMinutes is at the front of that movement. We spotted early the trend in less developed economies to use prepaid minutes as a de facto currency to get around the lack of liquidity and transparency in the formal financial system.
The author of the Inc. article hit many of our key business plan elements right on the head. First, he confirms our marketplace opportunity (our “blue ocean”):
“Today, there are more than two billion adults who are unbanked. That means they don’t have the ability to conduct financial transactions. In developing countries, the situation is especially dire, with only 41% actually having a bank account. The rest of the people in these regions rely on cash and bartering to conduct business.”
This lack of liquidity for both cash and credit is what we plan to solve with the BitMinutes initiative, leveraging our proprietary blockchain-based tokenization of the widely available prepaid minute proto-currency. As noted above, it is already establishing itself as a vehicle of value exchange in countries with limited formal financial networks.
“There is a genuine need for two improvements in local financial transactions. First, consumers and small business people need a secure way to make digital payments and loans for small transactions. Second, the businesses need access to more affordable credit to solidify and expand their business activities.”
Exactly. Current informal financial tools restrict cash flow and investment, limiting the currency multiplier effect that drives economic expansion. Second, without transparency corruption can thrive, which siphons off and misapplies capital that could be more productively invested. This leave honest small business people starving for even the smallest amounts of working capital. The BitMinutes network of Trusted Agents, built in partnership with local retailers, distributors and (yes) financial institutions, brings the transparency and confidence needed to draw more informal economic activity into the formal economy.
“Small businesses can make money using BMTs in different ways. They can sell BMTs just like the regular prepaid minutes they already sell. And they will soon be able to lend BMTs as an asset-backed token, using a BMT balance as collateral for a microloan.”
This is the beauty of our network-based financial services distribution system. The local retailer does not have to change behavior dramatically to become a TAN Agent and start offering services. And by having the “bank branch” in the cloud, accessed by the smartphone in the agent’s hand, network expansion is simplified and our ability to expand accelerated.
“This technology works well in regions where most people are not rich (by developed country standards), and many do not have bank accounts or credit cards. A sizable percentage of the world’s population fits into these categories and could use the help.”
We have a huge potential market to develop. We will take it one country at a time, but the model already works, and replication will develop a rhythm that should see countries added every few months, with 70 countries already prioritized (partners identified and ready to get to work.)