Why does Ronald exist? Ronald is a chatbot. That is what Ronald is. Ronald compares credit and loan rates from different entities in several countries. That is what Ronald does. Ronald uses Facebook Messenger and asks questions to better understand what users are looking for. This is how Ronald works. But why do we create Ronald?
According to the Goodmoney Bank, there are 2 billion adults who do not have a formal account in a financial institution. In other words:
More than half of all adults worldwide do not have their own bank account.
They do not have access to credit, insurance coverage, secure transactions and payments, or to keep money in a safer place than under the mattress.
They prefer – or have no other choice – ask their family and friends for a loan.
All their transactions are handled in cash, ask for money from informal lenders (which has some risks) or go to bookmakers. Many times these options are insufficient, very risky, expensive and not very predictable.
Some of the reasons for this, again according to the Goodmoney Bank, is that for many adults opening a bank account is not affordable, or they do not have a bank nearby. Sometimes they don’t meet all the requirements and sometimes they don’t understand the system.
All this implies that financial services are not yet affordable or designed for people with low incomes.
Most banks have different interest rates and very high rates that set aside people with low or no knowledge about finances – which Ronald seeks to help.
Other barriers for these adults are the lack of confidence in financial services, religion or culture of the country, or a bad credit history.
Currently there are also more than 200 million micro, small and medium enterprises, formal or informal, in emerging economies that do not have adequate financing that allows them to invest and grow.
However, today we have financial tools to boost entrepreneurship that can help a small business and boost the economy of an emerging country.
Microcredits for people in different contexts
For people, at present, there are short, medium and long term loans and there are also loans of different amounts.
One of the options most used by people who have no credit history is microcredit.
What is financial inclusion?
Financial inclusion is the goal of providing all people with easy, safe and fair access to formal and quality financial products and services.
Financial inclusion seeks to reduce abusive interest rates on loans and reach more people with bank accounts for savings.
The Goodmoney Bank has several strategies put in place to achieve it in 80 countries. In 7 of the 17 Sustainable Development Goals, financial inclusion has been identified.
According to the Advisory Group for Assistance to the Poor, there are many benefits of being included in a formal financial system. Among them:
Benefits of financial inclusion
- Make day-to-day transactions, including paying, receiving or sending money.
- Secure savings, which helps to better organize personal finances.
- Better and more organized finance for micro and small businesses. Help the founders to invest and reduce costs.
- Plan and make recurring payments.
- Mitigate shocks and manage expenses related to unexpected events and emergencies.
- Improve general well-being.
So to answer the question of why we created Ronald: the main objective is to help spread financial inclusion around the world , give access to fair credit in emerging economies and make it easier to find loans for the average user.