What a South African Study Reveals About Blockchain’s Potential to Support Africa’s Unbanked

Using Blockchain Technology in Providing Mobile Financial Services to Alleviate Financial Exclusion in South Africa by Budree et al. (2023) examines how blockchain could expand mobile financial services to the country’s unbanked population.

The study outlines a sharp divide: 54% of adults in developing countries have bank accounts, compared to 94% in OECD nations. In South Africa, 27% remain excluded, and over 30 million people live in poverty. Less than 30% of low-income adults hold formal accounts, with high fees, weak connectivity, and lack of identity documents keeping many reliant on cash.

Rather than relying on assumptions, the research draws from real-world interviews with industry experts, startups, and blockchain practitioners, offering a grounded view of how people actually engage with financial technology systems.

Findings suggest blockchain could reduce costs by removing intermediaries, improve recordkeeping, enable faster cross-border transactions, and support the creation of digital identities. Its immutability was highlighted as a way to build credit histories for informal workers.

One participant summarized the fairness potential clearly: “I can do a $1 transaction... and get treated no differently from somebody doing a $1 billion transaction” , contrasting sharply with traditional banking systems that prioritize wealthier clients.

However, the study remains cautious. Blockchain complexity, usability issues, and low digital literacy remain major barriers. In rural areas, high data costs and weak connectivity limit adoption, making lightweight tools like USSD essential.

This is where practical Bitcoin infrastructure becomes relevant. Tools like Machankura, a USSD-based Bitcoin wallet accessible via *8333#, allow users to send and receive Bitcoin without smartphones or internet access—currently active in multiple African countries.