Africa calling: first hybrid Blockchain to accelerate growth of digital economy
The business case for Humaniq App to lay the ground for a digital ecosystem of flourishing services is compelling
Why should entrepreneurs or investors focus on people who are currently unable to access banking services? Surely the traditional financial institutions ignored them because there simply was no business case to offer them services? These kind of questions are still asked by those considering investing in projects seeking to enter this market. They are questions that overlook the extent to which the Blockchain is shrinking the massive costs that made serving the world’s 2bn people without a bank account uneconomic.
The scope for growth in Sub-Saharan Africa is far larger than in developed economies, given both the growing, young population, and still expanding middle-class. The African Economic Outlook, a comprehensive assessment of the continent’s prospects, highlights that domestic demand “represents a major catalyst for African entrepreneurship”. While Africa may be long associated with commodities and agriculture, the services sector now makes up half the region’s growing output. This is largely due to a revolution in information and telecommunications, the report, drawn up for the African Development Bank, OECD and UN Development Programme, states.
A graphic illustration of this are the figures are smartphone subscriptions. These have ballooned to 260 million continent-wide, according to the latest figures in the Ericsson Mobility Report, and this is only the tip of the iceberg. This figure, the same report says, is predicted to reach an incredible 800 million in the space of just three years. Mobile broadband subscriptions will have close to doubled in the space of five years to 60% — approaching levels seen this decade in the U.S. This will give rise to hundreds of millions of consumers able to newly download and access smartphone applications and make transactions that they were previously unable to make — a huge new market.
From Dakar to Dar es Salaam, Kigali to Harare, the increased take-up of mobile services on the continent is having a significant and expanding contribution to GDP. The size of the market is on course to grow from $110bn to $142 billion or 8.6% of GDP by 2020, evidence from GSM Intelligence, a key source of mobile operator data and forecasts suggests. The story of the widespread use of M-Pesa for mobile banking in the middle-income nation of Kenya might be familiar: but even in its low-income neighbour of Uganda, fixed fibre backbone infrastructure is available in over half of the nation’s districts and 4G coverage is available in all major cities and national parks. With 41% in Uganda currently ‘unbanked,’ which means they are unable to access services from traditional financial institutions, a number of people without a bank account will instead have regular access to an online Internet service.
A number of barriers prevent them from opening a bank account, surveys carried out for the World Bank suggest: financial institutions are too far away and inaccessible; financial services are too expensive; and, in a fifth of cases, these ‘unbanked’ people to not have the identification they need to open an account. Bringing services closer to people and bringing costs down accelerate the growth of this market. Providing a means to verify the identity of all these people would remove an insurmountable obstacle for the unbanked without any ID — the Humaniq App biometric technology can offer such a service. Already the telecommunications market is expanding and overtaking that of the old financial institutions.
In Uganda, one of the five nations where Humaniq App was first launched, there are approaching 17m unique subscriptions. This is the majority of the adult population, in a country where 41% of people aged 15 and over do not have a bank account, according to the latest World Bank figures. And there is plenty of evidence that there is demand in Africa to use mobiles as an alternative to bank accounts. It is the only region in the world where the share of people with a mobile money account exceeds 10 percent, and this is no longer confined to East Africa, according to GSMA. The scope to build on this, and offer more than transactions such as payments and transfers is huge. As in other nations, a transacting account is the key that unlocks access to a comprehensive range of financial services, from insurance to loans, opening up manifold opportunities to work, earn and save. It is also the foundation for solutions in other sectors of economies, from public services and transportation, through to agriculture, health and utilities. A “more diverse digital financial ecosystem” with new products and offering new opportunities for enterprise is now within grasp, according to the GSMA.
This is the business opportunity for our platform, and one that is starting to pay off. Less than six months after Humaniq App was launched, there have been approaching a quarter of a million downloads in the Samsung Play Store in the first five nations where it was available. Now we are launching in Botswana, Ghana, Kenya, the Republic of Cote d’Ivoire and South Africa, we can look forward to accelerating this growth as per our objective to achieve a community of 1M users by the start of 2019. Our unique hybrid Blockchain solution means we avoid both the costs of deployment through intermediaries by the mobile money accounts, and the level of fees affecting transactions in cryptocurrency. We invite you to join us in this huge opportunity to serve the very many people who have been unserved, and so unable to enjoy the fruits of the 21st Century economy.
