Use Case: Blockchain, machine learning and IBM are disrupting Kenya’s agriculture and farming — Quartz
(qz.com)
For the three years that Jannifer Waceke has managed her own store in Nairobi, she has struggled to overcome one barrier: accessing small loans to replenish her kiosk, buy more vegetables and goods, and in turn, grow her business.
In many emerging markets, food retailers along with smallholder farmers, struggle to secure loans and develop a credit history. And without the proper financing, many of them fail to scale their businesses.
To tackle this, IBM has been working with the Kenya-based food logistics startup Twiga Foods to facilitate micro-lending options for food vendors.Twiga Foods operates a mobile-based business-to-business supply platform for retail outlets and stalls.
After analyzing these purchase records from mobile devices, IBM researchers determine creditworthiness, after which they use blockchain technology to administer the entire lending experience from application to receiving offers to accepting terms of repayment. The first eight-week pilot processed more than 220 loans averaging $30 each, with customers repaying within four to eight days with an interest rate of up to 2%.
“When I didn’t have money to buy more stuff, it made things so much easier for me,” Waceke says of the loan, which she used to stock more fruits and vegetables.Across East Africa, digital credit scoring is being trialed to pave the way for more affordable loans.
Mobile financial institutions are leading this, given that, unlike commercial banks, they don’t require credit scores, bank statements, lending history, and collateral. This is especially true for markets like Kenya, where mobile penetration stands at over 94% and mobile money services like M-Pesa help boost services ranging from e-commerce to healthcare, and transportation.
For instance, fintech companies like Tala, a data science and mobile technology company, have tapped into this, providing affordable credit to customers in Kenya, Tanzania, and beyond.
Blockchain technology could be used to help lower the barrier to enter financial systems and establish new markets and products. The platform’s decentralized ledger is said to allow users to keep track of transactions and forestall malpractice.
The move also comes as Kenya softens its stance on blockchain, hoping to use its digital system to tackle land registration and corruption. As well as IBM plugging into the agricultural sector, startups like iProcure and FarmDrive are also investing in the sector, using machine learning, alternative data, and mobile technology to optimize the agriculture supply input in a bid to raise profits for farmers and vendors.
But even as the conversation around these new technologies changes, there’s still some skepticism. Andrew Kinai, the lead research engineer of the food project at IBM, says it was “challenging to convince industry partners to explore new possible business models since there is always adoption risk with any new technology.”
https://qz.com/1281840/blockchain-machine-learning-and-ibm-are-disrupting-kenyas-agriculture-and-far...
In many emerging markets, food retailers along with smallholder farmers, struggle to secure loans and develop a credit history. And without the proper financing, many of them fail to scale their businesses.
To tackle this, IBM has been working with the Kenya-based food logistics startup Twiga Foods to facilitate micro-lending options for food vendors.Twiga Foods operates a mobile-based business-to-business supply platform for retail outlets and stalls.
After analyzing these purchase records from mobile devices, IBM researchers determine creditworthiness, after which they use blockchain technology to administer the entire lending experience from application to receiving offers to accepting terms of repayment. The first eight-week pilot processed more than 220 loans averaging $30 each, with customers repaying within four to eight days with an interest rate of up to 2%.
“When I didn’t have money to buy more stuff, it made things so much easier for me,” Waceke says of the loan, which she used to stock more fruits and vegetables.Across East Africa, digital credit scoring is being trialed to pave the way for more affordable loans.
Mobile financial institutions are leading this, given that, unlike commercial banks, they don’t require credit scores, bank statements, lending history, and collateral. This is especially true for markets like Kenya, where mobile penetration stands at over 94% and mobile money services like M-Pesa help boost services ranging from e-commerce to healthcare, and transportation.
For instance, fintech companies like Tala, a data science and mobile technology company, have tapped into this, providing affordable credit to customers in Kenya, Tanzania, and beyond.
Blockchain technology could be used to help lower the barrier to enter financial systems and establish new markets and products. The platform’s decentralized ledger is said to allow users to keep track of transactions and forestall malpractice.
The move also comes as Kenya softens its stance on blockchain, hoping to use its digital system to tackle land registration and corruption. As well as IBM plugging into the agricultural sector, startups like iProcure and FarmDrive are also investing in the sector, using machine learning, alternative data, and mobile technology to optimize the agriculture supply input in a bid to raise profits for farmers and vendors.
But even as the conversation around these new technologies changes, there’s still some skepticism. Andrew Kinai, the lead research engineer of the food project at IBM, says it was “challenging to convince industry partners to explore new possible business models since there is always adoption risk with any new technology.”
https://qz.com/1281840/blockchain-machine-learning-and-ibm-are-disrupting-kenyas-agriculture-and-far...
-
- 2
Dean Louis This is a fantastic use case example of how blockchain is paving the way for a decentralised future. As an African person, I know too well the struggle of not being able to move forward because of low credit rating or whatever other excuses people get for not getting assistance. The way the world works now, there is a disconnect between those in need and those with the means and the divide is hardly ever bridged. All some people need is a hand to get on their feet to get moving and this use case is the perfect example of people using their powers for good and closing the gap and eliminating the middle man means less interest on these micro loans and transparency, which was not possible before. -
- 3
Francisco Gimeno - BC Analyst One of the best use cases for Blockchain technology partnering with Big Data and AI, is for the development of the African continent through different sectors, in this case micro lending, land registration, fight against corruption, farmer women's cooperatives, etc. We are just witnessing the beginning in some African countries, like in this case Kenya.