#Microfinance and other financial development schemes are failing in #Africa because the majority of the continent is simply not included.
One is right to ask what is going wrong when many non governmental organizations (NGOs), International institutions and even #Fintechs startups are injecting millions of dollars in those financial inclusive projects, yet without any remarkable outcomes.
Wars and political crisis are not to be blamed anymore, as stats are showing a more stable continent than ever before.
Therefore, the only plausible element to blame is a failing traditional business model of those financial inclusive schemes. Deeper, it is more their technical infrastructure that is not at all adapted to the realities of the continent.
On that, on his twitter account, Boston based researcher, Mr Efosa Ojomo, expressed well the need of considering the beneficiary before building any type of infrastructure. He argues that the infrastructure needs to understand the people, not the opposite.
In fact, there are no such thing as accounting methods for emerging markets versus those used in developed world. Both markets will need same type of financial inputs to evaluate if an individual is solvable or not, for instance.
With that in mind, you quickly realize the missing part of today’s financial inclusive schemes in #Africa, is the ability from them to collect efficiently the needed inputs on a larger number of Africans.
Because, if many Africans have never declared their incomes to any centralized authority, how will you estimated your return on investment on any financial schemes for them?
Today’s financial technical infrastructures in Africa are lamely trying to collect the minimal required data with westerners accounting methods; which makes investing in #Africa look more like a gambling game with usurping rates, than anything else.
The reality today is like trying to build the great wall of China or shoveling snow of a Canadian city without adequate machinery. You may succeed after couple of hundred years and with the help of slaves, but definitely this can’t work nowadays.
That is where #Blockchain appears as a savior for both, those well intended looking to spread financial inclusive services to the last mile in an African village and the larger number of Africans in informal financial activities.
Considering the high adoption rate of mobile feature phones by Africans, the continuously falling price of smartphones thanks to China and the fact that internet will be a public commodity as road in a near future, mergims.com is building an online business facilitator platform and mobile applications on distributed ledgers technologies (DLTs), that once embedded in a cheap Chinese smartphone will make the informal financial activities of more than a billion of #Africans, a very reliable sources of data, more valuable than even what could be collected in the western world with taxes declaration forms. This will definitely trigger a tsunami of financial services in the next 5 years, thus lifting many on the continent out of poverty.
#Blockchain technology is so reliable that one could take it for a messiah sent to financially save Africa.
Founder & Managing director of mergims.com
Serial entrepreneur in internet related businesses