Kenya’s telecom operator giant Safaricom infamously barred bitcoin trading platforms like Kipochi from using their mobile money service M-Pesa. However, the stance is slowly shifting. Starting with Kenya’s infantile Blockchain and AI Taskforce that studies the benefits and challenges associated with blockchain technologies. Blockchain, (also referred to as a distributed ledger), is a mode of structuring data such that it facilitates the identifying and tracking of digital transactions, as well as the sharing of the information across a distributed network of computers, resulting in a seamless distributed trust network; which could be an organization or any other entity. Blockchain creates a more effective and reliable form of identification of a person whilst eliminating the need for a third party involvement. The technology is at the backbone of a wide array of applications aside from digital identity verification, among them micropayment and smart contract facilitation. All these capabilities and more when applied, have the ability to work miracles for small businesses in emerging markets. It holds the ability to leapfrog traditional technologies being used in these industries and bring forth new levels of growth and development, as well as alleviate the poverty that has for decades, plagued the African continent. Blockchain so far has primarily made its home in the financial sector. And no, I am not talking about Bitcoin, which is but one of the financial applications of the tech. The fraud averse nature of blockchain has made it a useful resource for the sector to tap into mainly due to the lack of a need for centralized supervision. The ability for the automatic recording and verification of large quantities of digital transactions endears it even further to the financial sector. BitPesa, a Nairobi-based firm created a platform for blockchain payments and digital exchanges; it helps businesses make B2B payments in multiple currencies across its operational stations. This is a valuable asset, that promotes cheaper and easier cross-border trade. Blockchain’s reduced need for a middleman drastically cuts the cost of services and gives back the power and control to the producers. This is a particularly important feature for small-scale farmers, who are often ripped off by middlemen who purchase their goods at stifling costs, leaving them with little to no profit margins. This scares many would-be farmers while discouraging those currently in the game. Kenya-based food logistics startup Twiga Foods dons a hero’s cape for farmers and food vendors. The company recently set the purchase prices for banana farmers in the Mt. Kenya region. Twiga has also partnered with IBM to bring microloans to food vendors. This is centered around the ability of blockchain to verify borrowers identities. Previously, low-income persons had a challenge accessing small business loans as there were few ways to assess their credit-worthiness. This resulted in a number of small businesses failing, that would have otherwise survived, had they received the much-needed cash injection. Head of Blockchain taskforce, Bitange Ndemo points out that, “Technology has enabled credit modeling and better financial profiling that opens up opportunities for the poor to access more other services like insurance, letters of credit, or just building their financial history to qualify for bigger loans to scale their micro-enterprises.” Blockchain is technology’s gift to logistics or logistics-reliant businesses. It can be applied to automatically track products from the production centers, throughout the process of their transportation all the way to the points of sale, from where consumers purchase them. The data comprehensive and free from intervention by people, which could lead to errors. The consensus mechanism upon which blockchain systems are built prevents this interference from occurring and allows robust checking of issues. SMEs with a need for transporting items across supply chains might do well to consider incorporating this type of technology. These are but a few examples of how relevant a player blockchain technology has become in emerging markets. (https://hbr.org/2017/05/how-blockchain-could-help-emerging-markets-leap-ahead) Even as the discussion about blockchain is changing, several people still exhibit skepticism and are waiting for a more evident proof; proof of which they are likely to get sooner than later, as the technology slowly revolutionizes every industry that applies it.
