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The underbanked is a characteristic describing people or organizations who do not have sufficient access to mainstream financial services and products typically offered by retail banks and thus often deprived of banking services such as credit cards or loans. The underbanked are characterized by a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as cheque cashers, loan sharks and pawnbrokers.

Many people who are classified as underbanked may also have a language barrier, such as migrant workers, be unable to access banking facilities due to distance, such as the elderly, or simply feel uncomfortable using automated teller machines.

The underbanked are a distinct group from the unbanked, who are characterized by having no banking facilities at all.[1]


Small countries have less banking provision than large countries, even allowing for the smaller size of their economies.[2]


There are many microfinance initiatives such as the Grameen Bank that aim to improve the provision of banking and financial services to poor communities.

Cryptocurrencies are electronic, non-regulated, decentralized forms of currency that can be an alternative way to allow the underbanked to gain access to their funds without using a financial institution. This includes people who either do not have access to regular banking or do not meet conditions for a financial institution. People who have access to technology, but not financial institutions, may find cryptocurrencies a viable alternative. This can be done by purchasing the cryptocurrencies from websites or apps using third-party systems such as PayPal. People who are underbanked are more likely to keep physical cash on hand and have no way to keep their money safe from theft. By utilizing cryptocurrencies, the underbanked will be able to store money, as well as use their funds electronically as a different source of payment.

See also[edit]


  1. ^ Retsinas, Nicolas Paul; Belsky, Eric S. (2005). Building assets, building credit: creating wealth in low-income communities. Brookings Institution Press. p. 299. ISBN 978-0-8157-7409-9.
  2. ^ Hanson, James A.; Honohan, Patrick; Majnoni, Giovanni (2003). Globalization and National Financial Systems. World Bank Publications. p. 91. ISBN 978-0-8213-5208-3.

Further reading[edit]