Blockchain microfinance micro loans for food stall owners in Kenya

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Blockchain microfinance micro loans will be extended to 220 food stall retailers across Kenya through a partnership between IBM Research and Twiga Foods.

Twiga Foods which is a business to business logistics platform for kiosks and food stalls in Kenya were looking to extend their logistic services into a total market ecosystem by adding financial services.

According to Isaac Markus, the IBM Kenya Researcher, IBM has been looking to spearhead efforts for blockchain rollout on their open standards. They choose Kenya to introduce blockchain microfinance because their targets aligned with the Kenyan government’s big four agenda which includes:

  1. Affordable and decent housing
  2. Manufacturing
  3. Food security
  4. Universal healthcare

IBM Kenya Researcher partnership with Twiga Foods is a first of its kind and the result of the project will be the evidence to the positive effect of the blockchain technology and its use to our everyday life.

There has already been an 8-week pilot this year which processed more than 220 blockchain microfinance micro loans with the average loan worth $30. The loans were for 4 and 8 days with an interest rate of 1% and 2% respectively. The loans were cashless and went directly to the capital for the businesses.

When a retailer had an order delivered, they would receive an SMS with the blockchain microfinance micro loan options for financing that order. They would then reply to the SMS confirming the loan option that they wanted.

At the end of the pilot, users reported the value and utility for the technology with many of them becoming repeat users.

IBM said that they are looking at opportunities locally to offer more blockchain microfinance. They said that financial services, supply chains, IoT, risk management, digital rights management and healthcare are some of the areas that are poised for dramatic change using blockchain networks in South Africa.

This project will see Twiga Foods, the Kenya based startup, use machine learning and the blockchain technology to determine a credit score and distribute blockchain microfinance micro loans for small food stands across Nairobi.

The technologies address a basic challenge in the region, how can businesses get access to microloans without a credit rating to scale-up their businesses.

This platform links SME’s, banks and FMCG’s to enable access to working capital and assist the SME in developing a financial profile or identity.

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