Access to finance at consumable cost is an unresolved problem in large hetrogenoius geographies with distributed population having low incomes; because the current service delivery model is a network of hard elements such as the flow of paper cash, file of documents, stack of collaterals, array of staff, machines to scale operations, and a branch to run the show.
The hard elements refuse to scale beyond a point to make economic sense; because there are vital assumptions behind each of them, when they came into being. The world has changed ever since, but still we play the game with old assumptions!
Assumptions behind 'Hard Elements'
1.Cash:- The currency still exists in paper form, this is a legacy inherited from time immemorial as there were no electronic scorecards at that time.
2.Documents:- Again a legacy issue, the only way known to our predecessors to make the people accountable for future.
3.Collaterals:- A menas to mitigate and manage the unpleasant outcome (risk), our predecessors want a control over a solid material.
4.Staff:- To manage the movement and maintenance of Cash, Documents and Collaterals, the human intervention at every stage is unaviodable.
5.Machines:- To manage the scale of operations requires different kinds of machines such as computers, telehones, ATMs etc.
6.Branch:- To house and connect the above CDCSM elements, there needs a branch i.e. B=f(CDCSM)
Discovering Universal Financial Access
* Can we replace Cash? :- It is possible to have an electronic scoring card, so no need to move money from one branch to another branch or ATM. This saves the printing cost of paper cash, storage cost, transfer cost and above all the access cost; since the electronic card gets updated by the electromagnetic waves directly from the satellite. So wherever in the world we go, the electromagnetic money follows us.
Imagine a world in which, wherever we go for any commercial purchase, this card get automatically connected to the vendor's electronic score card in WiFi mode, and when we authorize it debits our electronic score card and credit the vendors electronic score card; after computing the exchange rate in case we are in a foreign land.
Like a radio or TV, every home will have a financial handset. Using the financial handset menu, we can buy different financial services from different service providers using our electronic score card.
* Can we replace Documents: - When we have a unique biometric identity with the electronic score card, all transactions will have an electronic trail, in such a scenario the need for documentation is obsolete.
* Can we replace Collaterals: - If the creditors can barcode the customer’s assets using special waves from the financial handset, nobody will be able to buy the pledged assets without removing the creditor’s barcode. So the customers can still keep the assets with them as usual, so the creditor saves the material handling and storage costs. i.e. we can give a jewel loan in Uganda by sitting anywhere in the world!
All assets will have an asset ownership & identification code provided by the asset manufacturer, thus we know the asset quality and the actual asset owner. When asset owner sells the assets, the ownership details are updated.
* Can we replace Staff: - Since everything is done by electromagnetic waves electronically, so no need for operational staff!
* Can we replace Machines:- There is no need for computers or ATMs, since all transactions happens electromagnetically.
* Can we replace Branch: - Since there is no need for staff or machines, there is no need for any roof at all.
Key Benefit:- Universal Financial Access to anybody anywhere anytime!
The New World Requirements!
• Availability of electromagnetic score card & financial handset technology
• A sea change in financial regulations
• A sea change in legislations
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