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Tanzania: the Sky is the Limit for Blockchain Projects

Published

6 years ago

March 30, 2018

It is no longer a secret that the continent with the highest potential for cryptocurrency firms and services is Africa. It is remarkable how many new tech start-up centres have recently emerged in African cities, from Lagos in the west and Nairobi in the east to Agadir in the north.

Fintech startups can carve out a niche on the continent, where the problem of unbanked people is an urgent one. Humaniq is one such promising project that it is worth paying attention to. The London-based FinTech firm released an application for unbanked last year, which is now available in five African countries, including Tanzania.

The Humaniq app can be used on low-end mobile devices and, thanks to peer-to-peer transactions and referral programme, it is connecting people who do not have access to traditional banking services while not supplanting the latter. A hundred thousand downloads of the Humaniq App in Android is an excellent illustration of Africa’s enthusiastic uptake of technology. In 2018, the company has plans to build on this and achieve one million users.

There is a reason why Tanzania is under Humaniq’s spotlight. At this point in time, the East African nation has a number of challenges that need to be overcome in order to achieve full and meaningful financial inclusion necessary for everybody to participate in the 21st Century economy. This is why Tanzania represents a good target for blockchain startups.

Make hay while the sun shines

According to the National Financial Inclusion Framework (NFIF), Tanzania’s economy is gaining more and more momentum. It is making remarkable progress in expanding opportunities for people to access and use financial services to reach the goal of economic inclusion. Humaniq proposes a shift of emphasis to achieve this: from access to usage. It is only when people and businesses derive value from financial services that they will use them regularly as a matter of choice. A responsive, deeper and sustainable financial sector is one that offers a choice for individuals, households and enterprises and can make a meaningful contribution to economic growth, Humaniq’s team believes.

The uptake of traditional financial services for transactions reached 65 percent in 2017 compared to less than 58 percent four years prior. Accessibility, measured by the proportion of the population living within five kilometres from locations where financial services are provided, has grown from 45 percent to 86 percent nationally and is already at an impressive 78 percent on average for those living in rural areas.

The growth in active mobile wallets has reached over 21 million (75 percent of the Tanzania’s adult population) while those actively using mobile financial services now stands at 16.6 million as reported by FinScope Tanzania 2017. Some of the inhabitants even have more than two mobiles per family, and 14 percent of those who have ever used a phone run their own business from the device.

Despite all these achievements, the level of financial exclusion is still high at 28 percent of the population. And this figure includes disproportionate numbers of people who live in rural areas, smallholder farmers, young people and women. It has also been observed that there is a big gap between the demand and supply of financial services in the market, whereby the majority of products do not meet users’ needs. However, such figures mean for Humaniq a promising user base and a ‘blue ocean’ for thousands of new projects to thrive, bringing ideas that can overcome the economic problems that Tanzanians face.

So what are the problems that continue to act as a brake on the progress of the nation’s citizens that make it impossible for every Tanzanian to enjoy the goods and services that are available to many others in the world?

Humaniq knows where to start

First and foremost Tanzanians do not have consistent sources of income. Typical microfinance clients have low incomes ($1.25 a day) and are often self-employed in the informal economy. These conditions together tend to deny them access to banks and other formal financial institutions. They commonly run small stores or street stalls, create and sell items they make in their homes. In rural areas, they are often microfinance clients who may be small-scale farmers and people who process or trade crops and goods.

Humaniq, for its part, enables a peer-to-peer economy. It allows banking services to be offered everywhere, including to people in areas that are not served by traditional banks, and so are able to enjoy the 21st Century economy’s opportunities. It also opens up the possibility to address the problem of unemployment, as people could directly find each other, and send money to, and receive it from, other people. This way of providing financial services is not only more democratic and accessible, it also offers better security, because there is no central server for hackers to attack, and the information on transactions cannot be tampered with.

Secondly, what cannot be ignored is the fact that a low level of general literacy and numeracy leads to a low level of financial literacy among the general population and business owners, including a lack of knowledge about financial services, institutions and the Internet.

Humaniq’s team has prepared for such a challenging scenario: through the Humaniq app Tanzanians will have the opportunity to take a course in financial literacy and to take part in a number of simulation games, after which they will be rewarded in HMQ, the Humaniq token. Every new user receives $20 worth of HMQ in their account related to these interactions with the app, the value of which bears no relation to their local currency.

Thirdly, in Tanzania, it is very difficult to obtain credit from financial institutions. One cannot avoid high-interest rates, collateral and travelling long distances to and from banks – as much as 20 to 30 km in one day. The process of taking a large loan is complicated by the fact the numerous difficulties in the registration of land ownership, frustrating the receiving of large loans from banks. Only 3 percent of citizens own land. According to VICOBA’s data, the registration of land costs as much as $100 – $ 250. Such sums of money are too high for local farmers. As a result, 44 percent of Tanzanians (12 million adults) took a loan in 2017 but the vast majority, 69 percent of them (8 million), borrowed from friends and relatives, not from traditional banks.

Humaniq facilitates and formalises the process of taking out a peer-to-peer loan. Now, thanks to the power of these people-powered transactions, one can lend and borrow more easily and quickly than before, and without relying on the financial industry and its fee-charging field representatives. And in addition, users gain HMQ cryptocurrency simply for recommending friends and making transactions.

Humaniq’s ambassadors in Tanzania pursue social, humanitarian and commercial objectives, giving isolated people the chance to improve their lives for the better and to improve their prospects in the country.

Related Topics:blockchain Humaniq tanzania

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Weekly Roundup: Africa’s Cassava Network Partners with UniPass to Expand Crypto Adoption in Africa & More

Published

1 year ago

March 9, 2023

Rachael Odhiambo

In this week’s news roundup, you will read about Cassava Network, an African Web3 platform that has partnered with UniPass to advance crypto adoption in Africa, and more.

African Web3 Platform, Cassava Network, Partners with Self-custody Crypto Wallet to Expand Crypto Adoption in Africa

Cassava Network, an African Web3 platform with a focus on gaming, non-fungible tokens (NFTs), and rewards, has announced the launch of the third version of its platform that features integration with UniPass, a non-custodial smart contract, enabling users to use their email addresses instead of seed phrases and gas.

The partnership will enable Cassava Network to onboard Africans from Web2 to Web3 as users will be able to create Cassava accounts and automatically sign up to UniPass where they will be able to send, receive, and store on-chain digital assets across various Ethereum Virtual Machine (EVM) blockchains.

Speaking about the launch of the new platform version, Mouloukou Sanoh, Co-founder of Cassava Network, said, “Cassava v3 serves as a bridge for global Web3 businesses to connect with African Web2 users.”

Sanoh went ahead to mention that 90 percent of the partners engaging with the community feature of the new version are African businesses.

Benjamin Obenze, Cassava Network’s Business Developer, in an interview said that African users and businesses will be able to use the new platform version to enter Web3 spaces.

Nigeria Leads the African Continent with Crypto Leverage Searches on Google

According to an analysis of Google searches done by Leverage Trading, Nigeria scored the second-highest globally (94) for searches related to crypto leverage in the last five years.

Singapore is the only country that outscored Nigeria with a score of 100 regarding searches but with more emphasis on transactional searches like ‘how to leverage trade crypto’. South Africa and Ghana follow Nigeria closely as both countries have also dominated Google searches for the term ‘trade crypto.’

Despite Nigeria leading in the crypto leverage searches and South Africa and Ghana following closely, Leverage Trading established that Africa still lags behind when it comes to searches for the term ‘stock leverage.’

To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.

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Weekly Roundup: Kenyan Senate in Discussion with CBK to Legalise Bitcoin & More

Published

1 year ago

February 22, 2023

Rachael Odhiambo

In this week’s news roundup, you will read about the Senate initiating talks with the Central Bank of Kenya to develop policies on digital assets, Zambia’s move to test the tech it desires to use for crypto regulation, and more.

Kenya’s Senate to Hold Discussions with CBK to Legalise Digital Assets

The Committee on Information, Communication & Technology, under the Senate of the Republic of Kenya, has made its intention known that it will engage the Central Bank of Kenya (CBK) and other stakeholders to develop policies on the use of crypto assets and virtual service providers in the country.

The news was shared on the official Twitter page of the Senate of Kenya. The committee is keen on facilitating the development of a crypto regulatory framework that can enable Kenyans to carry out safe and secure crypto transactions. Moreover, the committee also noted that having regulations on cryptocurrency use in the country will help Kenya to harness the benefits of financial innovation while curtailing the risks associated with digital assets. The committee also stated that it is committed to accelerating the implementation of the country’s Central Bank Digital Currency (CBDC).

Despite these new developments, the CBK hasn’t outrightly changed its stance on virtual currencies like Bitcoin not being a legal tender. However, the CBK, in 2022, published a discussion paper calling on Kenyans to share their opinions on CBDC as it looked to explore the potential implementation of a CBDC.

Zambia Testing Technology for Crypto Regulation

The Bank of Zambia and the country’s securities regulator are currently testing technology to allow for the regulation of cryptocurrencies. The news was shared by Zambia’s Technology and Science Minister, Felix Mutati, on the ministry’s website in a move that is aimed at achieving an inclusive digital country.

Speaking about the news, Mutati stated that cryptocurrency is the future that the country desires to achieve,” but a policy framework is required to support this “revolutionary technology.” He went ahead to state that the testing of the technology that will potentially be used to regulate cryptocurrencies in the country will be upscaled in due time as part of deliberate efforts to achieve an inclusive digital economy in the country.

In addition, the minister also claimed that Zambia aspires to become a technology hub in Africa by developing digital infrastructure and attracting investments in the sector.

South African Startup Momint Keen to Boost Electricity Generation Utilising Blockchain-Based Solution

Momint, a South African startup, recently announced that it had launched a blockchain-powered solution that can alleviate the country’s energy distress by installing more rooftop solar systems in public institutions such as schools and hospitals.

The company has so far piloted the solution at one local school – Delmas High School – in Mpumalanga Province, South Africa, according to a news report published by News 24. According to the report, investors who are keen to participate in the project can do so by acquiring non-fungible tokens (NFTs) that are linked to solar cells and retail for just under $9.

The solar cells will then be leased to institutions that agree to buy the generated electricity through a standard power purchase agreement.

Speaking of his company’s solution, Ahren Posthumus, Momint’s CEO, said, “We are a technology company that’s trying to build for the next 15 years, but what we realized is we can’t build a technology company in a country that doesn’t have electricity.”

To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.

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Weekly Roundup: South Africa Introduces New Cryptocurrency Standards to Advertising Code & More

Published

1 year ago

February 10, 2023

Rachael Odhiambo

In this week’s news roundup, you will read about South Africa’s new clause on its advertising code targeted towards the cryptocurrency sector and more.

South Africa Introduces New Cryptocurrency Standards to Advertising Code

The South African Advertising Regulatory Board (ARB) has introduced a new clause targeted at the crypto industry and aimed at protecting consumers from unethical advertising.

According to the new clause introduced to Section III of the country’s advertising code, both companies and individuals in South Africa will be required to abide by certain advertising standards in relation to the provision of crypto products and services. The first clause makes it mandatory for adverts, including crypto offerings, to clearly express that crypto investments may result in the loss of capital given the volatile nature of cryptocurrencies. In addition, crypto adverts should not contradict warnings about potential investment losses that investors may face.

The clause also went ahead to emphasize that adverts for particular services and products must be explained in an easily understandable manner for the target audience. Advertisements must also have balanced messages around benefits, features, returns, and risks associated with the particular service or product.

Rates of returns, projections, or any kind of forecasts must also be sufficiently substantiated, including how they are calculated and what conditions apply to touted returns. Moreover, any information relating to a crypto product or service’s past performance will not be used to promise future performance or returns, and should, therefore, not be presented in a way that creates ‘a favourable impression of the advertised product or service.’

The clause went on to state that adverts from crypto service providers who aren’t registered credit providers should not push for the acquisition of digital currencies using credit. However, this does not prevent the advertising of associated payment methods provided by crypto service providers. In the same breadth, brand ambassadors and social media influencers will also be expected to comply with certain advertising standards, such as sharing factual information and not offering advice on investing or trading in crypto assets as well as the prohibition of promises of benefits or returns.

Central African Republic Keen on a Legal Framework for Cryptocurrency Adoption

Central African Republic (CAR) has set up a 15-member committee that will be responsible for developing a bill on the use of cryptocurrencies and tokenization in the region.

Once developed, the legal framework will enable cryptocurrencies to operate in the Central African Republic and expedite the development of the country’s economy. CAR’s President, Faustin-Archange Touadéra, believes that digital currencies will help eliminate the country’s financial barriers and build a business-friendly environment that’s supported by a legal framework for crypto usage in the country.

He went on to say, “With access to cryptocurrencies, the monetary barriers existing until now will disappear, the main objective of the measures adopted by the government being the development of the national economy.”

The committee tasked with drafting the crypto bill comprises 15 experts from five different ministries of CAR, including the Ministry of Mines and Geology, the Ministry of Waters, Forest, Hunting and Fishing, the Ministry of Agriculture ad Rural Development, the Ministry of Town Planning, Land Reform, Towns and Housing and Ministry of Justice, Promotion of Human Rights and Good Governance.

To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.