Cryptocurrency power in Africa hinges on connectivity, mobile device ownership
Although Mozambique has boosted its financial inclusion through institution of a regulatory sandbox for Fintech, poor connectivity and low mobile device ownership is hampering progress says Sofie Blakstad, CEO of digital finance platform Hiveonline.
Hiveonline and other Fintech companies are leveraging blockchain to deepen financial inclusion in Africa, especially by supporting savings and credit clubs.
These clubs are becoming increasingly popular in countries such as Kenya, Mozambique, Nigeria, South Africa and Zimbabwe where they have also been promoting access to micro-loans via mobile phones.
ImpactMarket growth manager, Jessica Gaubert said the firm has been using blockchain technology “to provide access to finance and unconditional basic income in the most vulnerable communities” in countries like Malawi and Zimbabwe.
Blockchain and Fintech – driven by start-ups across the continent – have continued to help bridge financial inclusion gaps. However, according to market consultants Blakstad, countries like Mozambique continue to experience barriers.
“Obviously there are barriers to overcome, such as poor connectivity and low device ownership. We have designed a platform where people can be members, and have an ID, a wallet and a digital history without needing a phone, and we use social structures and rewards to keep the data clean and accurate,” explained Blakstad.
The importance of Fintech and blockchain platforms such as ImpactMarket and Hiveonline’s extends beyond the primary use cases of moving or accessing finance.
They are important for regional countries such as Mozambique in enhancing “traceability and building up a digital” profile for users.
“When that is linked to commercial activity for businesses like farming, it can provide a level of confidence to give access to lending from the formal sector,” further explained Blakstad.
While some African governments have been hesitant on cryptocurrencies, digital currencies and blockchain, South Africa – which has published a regulatory sandbox for cryptocurrencies and Nigeria which is building a digital currency under the central bank – are leading the way for the region.