informal economy

Blockchain is Opening up Kenya’s $20 billion Informal economy

Janeffer Wacheke has taken advantage of the availability of a technology that has proven very resourceful in solving problems that even banks in Kenya have been unable to solve. This problem involves monitoring the credit eligibility of traders in Kenya’s $20 billion informal economy.

Informal Economy in Kenya still Nets Billions 

Janeffer Wacheke, a 40-year-old tomato trader, is one of the many retailers in Kenya that now makes use of their phone to get loans to purchase onions, tomatoes, and bananas without the aid of any middleman. They buy from the producers and have their goods brought to them by Twiga Foods Ltd, one of Kenya’s start-ups. With this invention, Janeffer Wacheke does not have to spend time going to the market to buy her goods. In addition to this, Janeffer has been able to build a credit track pedigree as well as cut down the cost of running her business.

What is this Technology All About?

Now, the retailers in Kenya’s informal economy might not be aware of this fact. However, Twiga, the startup that has made it a point of duty to help traders avoid middlemen when making a purchase of goods, makes use of the exact technology that digital currencies also make use of. This technology is none other than Blockchain technology. Although it is amazing how startups in Africa are already taking advantage of a technology that is not yet totally accepted by the world, more amazing is the fact that this technology is being enjoyed by uneducated traders that perhaps do not know what it is called. Basically, the Blockchain technology is made use of by Twiga to monitor traders in Kenya’s informal economy. With this technology, the manner in which a trader orders stocks and pays back loans can be monitored. This mobile Blockchain platform, which has become very vital to the existence of small businesses, was built by international business machines corp. It is also one of the Apps in Africa that have made attempts at solving the issues with the growth of Africa’s economy.

Improved Access to Credit Facilities

At the moment, lots of small firms have difficulties getting credit. The reason for this is simple; small businesses in Kenya are considered to be a group and are therefore treated as such. However, with the emergence of this mobile Blockchain platform, if you have been able to maintain a good track record, you can have access to credit facilities. Prior to now, getting to know the performance of a business was very difficult. Well, since the emergence of this technology, it has become easy.

Usually, traders that do business with Twiga, type their orders into their phones. With this, their spending patterns and credit histories are analysed. When this analysis is recorded on Blockchain, the business history of small businesses can be accessed by banks and other institutions that give out credits.

Is Blockchain Key to Analysis in Kenya’s informal economy?

So far, this App that makes use of Blockchain has made a lot of progress. Still, not everyone agrees that it will totally solve the challenges of Kenya’s informal economy. Well, with the rate of success that is being recorded by this App, it definitely has the potential to solve Kenya’s informal economy. However, there is no certainty that it will.

Check Out Crypto Core Radio