A new blockchain-enabled financing app for mobile phones is set to be launched that will provide kiosk and food stall owners in Nairobi with quick and easy microloans when ordering stock.

According to IT News Africa, mobile-based B2B stock supply platform Twiga Foods partnered with IBM Research late last year to deploy a microcredit solution pilot to help SMEs access sufficient credit – a process that is often problematic due to complex financing procedures, high loan costs, collateral requirements and lack of credit score.

On delivery of an order by Twiga Foods, the retailer would receive an SMS with loan options and then respond by confirming the financing option they preferred.

‘After analysing purchase records from a mobile device, we used machine learning algorithms to predict creditworthiness, in turn giving lenders the confidence they need to provide microloans to small businesses,’ says research engineer Isaac Markus from IBM Research in Kenya.

During the eight-week project, more than 220 loans were processed (each averaging US$30), enabling the retailers increase their profits by approximately 6%.

With the pilot now complete, the platform is ready to be rolled out to more traders across Kenya, with expansion into different sectors and throughout the continent by the end of the year.

2 May 2018
Image: Alamy