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Blockchain technology finances food kiosk owners in Kenya

Work & Lifestyle

A company partnership has created a system using blockchain to allow vendors without a credit rating to take out short-term loans.

A generally unknown entity five years ago, blockchain technology is infiltrating every industry. It was once associated only with the finance sector, but it can also be used in many other ways. Verifying votes in an election in Sierra Leone and providing the homeless with a digital identity are just two ways the technology has changed processes.

Using blockchain in another completely different way, it is even helping small eateries. IBM and Twiga Foods have joined forces to use blockchain to finance food kiosk owners in Kenya. Twiga Foods is a B2B logistics platform for kiosks and food stalls in Africa and wanted to expand its logistics services by adding financial services for its clients. That is where IBM stepped in.

Scientists from the company created and tested a blockchain-enabled finance-lending platform that could analyse applicants’ finances. As most vendors lack a credit score, the specialists had to create a tailored system. It analyses purchase records from a mobile device and then applies machine-learning algorithms to predict credit worthiness. The lending process is transparent to all parties involved thanks to the implementation of blockchain technology. As blockchains don’t change of their own accord, it helps reduce fraud as no one involved can alter it without everyone else knowing. The smart contracts the technology creates help vendors get funding much quicker than a normal loan application procedure.

Twiga Foods and IBM piloted the system on 220 small food vendors in Kenya. The eight-week trial processed more than 220 loans with the average loan equating to around 30 USD. This increased the order size potential by 30 percent and profits for each retailer by an average of 6 percent. All loans issued were for four and eight days with an interest rate of 1 percent and 2 percent respectively. How could blockchain technology impact your business?

Email: info@twigafoods.com

Website: www.ibm.com

Contact: www.ibm.com/contact

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