Fintech Revolution Could Bridge Financial Gap in Developing Nations, Says Yuno CEO
Summary:
A fintech "revolution" could overcome financial exclusion in developing countries, says Juan Pablo Ortega, CEO of Yuno, an online payment platform. Arguing that widespread distrust of banking systems poses a major barrier to financial inclusion, Ortega believes fintech firms are driving change in Latin America, Asia, and parts of Africa. He cites Brazilian fintech firm Nubank as an example of progress, amidst many challenges. Meanwhile, India, Nigeria, and Vietnam are currently leading in crypto adoption globally, despite potential hurdles such as regulatory compliance.
A surge in cryptocurrency and fintech could address the prevalent financial exclusion in underdeveloped nations, but it needs to first establish trust among those disconnected from financial services, says a top official from a payments company. During a panel dialogue at the Web Summit Qatar on February 27, Juan Pablo Ortega, the founder and CEO of Yuno, an online payment service, emphasized the main barrier to financial inclusion is a deep-seated skepticism for any payment method other than hard cash, a sentiment particularly strong in countries grappling with high inflation. The panel was helmed by Cointelegraph's ambassador and editor-at-large, Kristina Lucrezia Cornèr.
Ortega sees an ingrained distrust towards banking in countries like Argentina, where individuals often decide to keep their cash on their persons. He stressed that customers wouldn’t consider opening a bank account with an institution they don't trust. The Yuno CEO used a theoretical scenario of a taco vendor in need of a $100 loan for their business, who under the current banking system, could end up paying that back with three-fold interest. Ortega believes this practice only amplifies the wealth disparity.
However, Ortega is starting to witness a 'revolution' in financial inclusion driven by fintech companies in Latin America, Asia, and parts of Africa, although there are still hurdles to overcome. Relevant laws need to be amended by regulators, and then, fintech companies need to win back the trust of consumers, he indicated. Citing the Brazilian fintech neobank Nubank- who recently collaborated with stablecoin issuer Circle to amplify demand for USD Coin (USDC) in Latin America- as an example of some progress on this front.
Developing nations like India, Nigeria and Vietnam are leading globally in terms of crypto adoption as per Chainalysis’ 2023 Global Crypto Adoption Index. Philippines, Indonesia and Thailand secured the sixth, seventh and tenth positions respectively, while Brazil was the sole Latin American country to make it into the top 10.
In contrast, Yashish Dahiya, founder and CEO of insurance-centric fintech company Policybazaar, shared on the panel that India has been strongly focusing on financial inclusion. Dahiya believes financial inclusion will be pivotal in Indian Prime Minister Narendra Modi's strategy to lift 750 million Indians from poverty over the upcoming 15 years. However, the path crypto will follow in this initiative remains uncertain following the Indian government’s banning of crypto exchanges like Binance, Kraken, and Kucoin last December for non-compliance with the country's financial intelligence unit's guidelines.
Published At
2/29/2024 8:10:22 AM
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